As countries across the world strive to attract international direct investments, the Arab Gulf stands apart as being a strong possible destination.

Nations across the world implement different schemes and enact legislations to attract international direct investments. Some countries for instance the GCC countries are increasingly adopting flexible regulations, while others have actually reduced labour expenses as their comparative advantage. Some great benefits of FDI are, needless to say, shared, as if the international business finds lower labour expenses, it is able to minimise costs. In addition, if the host country can grant better tariffs and savings, business could diversify its markets via a subsidiary branch. On the other hand, the state will be able to grow its economy, cultivate human capital, increase employment, and provide usage of knowledge, technology, and skills. Therefore, economists argue, that oftentimes, FDI has resulted in effectiveness by transmitting technology and know-how to the host country. Nonetheless, investors think about a numerous factors before deciding to move in a state, but one of the significant factors which they think about determinants of investment decisions are location, exchange volatility, political security and governmental policies.

To examine the viability of the Gulf as a destination for international direct investment, one must assess whether or not the Arab gulf countries give you the necessary and sufficient conditions to promote direct investments. Among the important criterion is political security. Just how do we evaluate a country or even a region's security? Governmental security depends to a large extent on the content of inhabitants. Citizens of GCC countries have a good amount of opportunities to aid them attain their dreams and convert them into realities, making many of them content and grateful. Additionally, international indicators of political stability unveil that there's been no major governmental unrest in in these countries, and the occurrence of such an eventuality is very not likely given the strong governmental determination as well as the farsightedness of the leadership in these counties especially in dealing with political crises. Furthermore, high levels of corruption could be extremely harmful to foreign investments as potential investors dread risks like the obstructions of fund transfers and expropriations. However, in terms here of Gulf, political scientists in a study that compared 200 counties categorised the gulf countries being a low risk in both categories. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that several corruption indexes make sure the region is increasing year by year in reducing corruption.

The volatility of the exchange prices is something investors just take into account seriously since the unpredictability of exchange rate fluctuations might have a visible impact on their profitability. The currencies of gulf counties have all been pegged to the United States dollar from the late 1990s and early 2000s, and investors such Farhad Azima in Ras Al Khaimah and Oussama el-Omari in Ras Al Khaimah may likely see the pegged exchange price being an important seduction for the inflow of FDI in to the country as investors don't need certainly to worry about time and money spent manging the currency exchange risk. Another crucial benefit that the gulf has is its geographic location, situated on the crossroads of three continents, the region serves as a gateway towards the rapidly growing Middle East market.