The GCC countries are earnestly implementing policies to bring in foreign investments.

Nations around the world implement different schemes and enact legislations to attract international direct investments. Some countries for instance the GCC countries are progressively embracing pliable regulations, while others have actually cheaper labour costs as their comparative advantage. The many benefits of FDI are, needless to say, mutual, as if the multinational firm finds reduced labour costs, it'll be in a position to minimise costs. In addition, if the host country can grant better tariffs and savings, the business . could diversify its markets through a subsidiary branch. On the other hand, the country should be able to develop its economy, develop human capital, enhance employment, and provide usage of knowledge, technology, and skills. Therefore, economists argue, that oftentimes, FDI has generated efficiency by transferring technology and knowledge to the country. Nonetheless, investors look at a many aspects before carefully deciding to invest in new market, but among the list of significant factors they consider determinants of investment decisions are geographic location, exchange volatility, governmental stability and government policies.

The volatility of the exchange prices is something investors simply take into account seriously due to the fact unpredictability of currency exchange price changes might have an effect on their profitability. The currencies of gulf counties have all been pegged to the United States currency 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 see the pegged exchange rate being an essential seduction for the inflow of FDI to the region as investors do not have to worry about time and money spent handling the foreign currency risk. Another important advantage that the gulf has is its geographic position, situated at the intersection of Europe, Asia, and Africa, the region functions as a gateway towards the quickly raising Middle East market.

To look at the suitableness regarding the Persian Gulf as a destination for international direct investment, one must evaluate whether or not the Arab gulf countries give you the necessary and sufficient conditions to promote direct investments. Among the consequential aspects is governmental stability. Just how do we assess a country or perhaps a area's stability? Political stability will depend on to a significant level on the content of individuals. People of GCC countries have lots of opportunities to greatly help them attain their dreams and convert them into realities, making a lot of them content and grateful. Also, worldwide indicators of governmental stability unveil that there has been no major political unrest in the area, and the occurrence of such an scenario is extremely unlikely given the strong governmental determination plus the prudence of the leadership in these counties particularly in dealing with political crises. Furthermore, high levels of misconduct can be extremely harmful to foreign investments as investors fear risks for instance the obstructions of fund transfers and expropriations. But, in terms of Gulf, economists in a study that compared 200 states classified the gulf countries as a low hazard in both aspects. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that several corruption indexes make sure the Gulf countries is improving year by year in eradicating corruption.