Governments all over the world are adopting various schemes and legislations to attract international direct investments.

The volatility associated with the exchange prices is one thing investors simply take into account seriously because the unpredictability of exchange price changes might have a direct effect on the profitability. The currencies of gulf counties have all been fixed to the US dollar since 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 price being an essential attraction for the inflow of FDI into the country as investors do not need to be concerned about time and money spent manging the foreign exchange risk. Another important advantage that the gulf has is its geographic position, located on the intersection of Europe, Asia, and Africa, the region serves as a gateway to the quickly growing Middle East market.

To examine the suitableness regarding the Arabian Gulf as being a destination for international direct investment, one must assess whether or not the Arab gulf countries give you the necessary and sufficient conditions to encourage direct investments. One of many important factors is governmental security. How can we assess a state or even a area's security? Governmental security depends up to a large degree on the satisfaction of citizens. People of GCC countries have a great amount of opportunities to help them attain their dreams and convert them into realities, which makes a lot of them content and happy. Additionally, worldwide indicators of governmental stability unveil that there has been no major governmental unrest in the area, and the occurrence of such a scenario is very not likely given the strong political will as well as the vision of the leadership in these counties specially in dealing with political crises. Moreover, high levels of misconduct can be . hugely harmful to foreign investments as potential investors fear hazards like the blockages of fund transfers and expropriations. Nonetheless, in terms of Gulf, political scientists in a study that compared 200 counties classified the gulf countries being a low danger in both categories. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that several corruption indexes confirm that the Gulf countries is improving year by year in eliminating corruption.

Nations around the globe implement various schemes and enact legislations to attract international direct investments. Some countries for instance the GCC countries are increasingly adopting pliable laws and regulations, while others have actually cheaper labour expenses as their comparative advantage. The advantages of FDI are, of course, mutual, as if the multinational firm discovers lower labour costs, it'll be in a position to reduce costs. In addition, if the host country can grant better tariffs and savings, the business enterprise could diversify its markets via a subsidiary. Having said that, the country should be able to grow its economy, develop human capital, enhance employment, and provide access to knowledge, technology, and abilities. Thus, economists argue, that in many cases, FDI has generated efficiency by transmitting technology and knowledge towards the country. Nonetheless, investors think about a numerous aspects before deciding to move in new market, but among the significant factors they think about determinants of investment decisions are geographic location, exchange volatility, governmental security and governmental policies.