Different countries throughout the world have actually implemented strategies and regulations designed to attract foreign direct investments.

The volatility regarding the currency prices is something investors just take seriously since the unpredictability of currency exchange rate fluctuations could have a direct impact on their profitability. The currencies of gulf counties have all been pegged to the US dollar from the mid 1990s and early 2000s, and investors such Farhad Azima in Ras Al Khaimah and Oussama el-Omari in Ras Al Khaimah may likely view the pegged exchange rate as an important attraction for the inflow of FDI into the region as investors don't have to be worried about time and money spent manging the foreign exchange instability. Another important advantage that the gulf has is its geographical location, located on the intersection of Europe, Asia, and Africa, the region functions as a gateway towards the rapidly growing Middle East market.

Nations around the globe implement different schemes and enact legislations to attract international direct investments. Some nations like the GCC countries are progressively implementing pliable regulations, while others have actually lower labour expenses as their comparative advantage. Some great benefits of FDI are, needless to say, mutual, as if the multinational business discovers reduced labour expenses, it'll be in a position to cut costs. In addition, in the event that host country can grant better tariffs and savings, the business enterprise could diversify its markets through a subsidiary branch. On the other hand, the country will be able to grow its economy, cultivate human capital, enhance job opportunities, and offer usage of knowledge, technology, and abilities. Hence, economists argue, that oftentimes, FDI has generated effectiveness by transferring technology and know-how to the country. However, investors consider a many factors before making a decision to move in a country, but among the list of significant variables which they give consideration to determinants of investment decisions are geographic location, exchange volatility, governmental stability and government policies.

To look at the viability regarding the Arabian Gulf being a destination for international direct investment, one must assess whether the Arab gulf countries give you the necessary and adequate conditions to encourage FDIs. Among the important aspects is governmental security. How do we evaluate a country or even a area's stability? Governmental security depends to a large extent on the content of people. People of GCC countries have plenty of opportunities to aid them achieve their dreams and convert them into realities, making a lot of them content and grateful. Furthermore, international indicators of political stability unveil that there is no major political unrest in the area, plus the incident of such an eventuality is very not likely because of the strong governmental determination plus the prescience of the leadership in these counties especially in dealing with crises. Furthermore, high levels of corruption could be extremely detrimental to foreign website investments as investors dread hazards including the obstructions of fund transfers and expropriations. Nonetheless, regarding Gulf, political scientists in a study that compared 200 states deemed the gulf countries as a low risk in both aspects. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor would probably testify that a few corruption indexes concur that the region is improving year by year in reducing corruption.