Dubai had the lion’s share of tech foreign direct investment (FDI) projects in 2023, with a total of 232 projects — representing over half of the region’s investments — channeled into the emirate, according to a report by fDi Markets. Overall, the UAE attracted 257 projects in 2023, making it the top destination for tech investment in the region.

Dubai was followed by Saudi capital Riyadh, which saw FDI channeled into 51 projects, and Abu Dhabi, with 21 projects. Ras Al Khaimah and Sharjah had two projects each.

The Middle East stood out as the sole region to record growth in inbound tech FDI projects over the past two years, with 400 projects attracting foreign investments, up 4% y-o-y, compared to a 40% decline in worldwide tech FDI projects during the same period.

More tech FDI incoming: With the Middle East’s digital economy poised to surge 20% to USD 780 bn by 2030, positioning the region among the fastest-growing digital economies globally, according to investment bank UBS, Rabih Khoury, a partner at Middle East Venture Partners, anticipates a surge in tech investment activity in the upcoming years. The growing tech FDI influx represents only “the tip of the iceberg,” he said, adding that AI is expected to become the next major tech trend to support the diversification of oil-reliant Middle Eastern economies.

The Mena region is poised to draw more tech investments on the back of its “favorable regulations, tax breaks and large sovereign investments into venture capital (VC) funds,” Khoury said. Foreign tech investors have a “big opportunity” to offer their services to the Middle East, given that other competitors like India and China lag behind in areas such as cloud penetration, said.

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