The GCC countries are earnestly adopting policies to attract foreign investments.

The volatility of the exchange rates is one thing investors simply take into account seriously due to the fact unpredictability of currency exchange rate fluctuations might have a visible impact on their profitability. The currencies of gulf counties have all been fixed to the United States 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 being an essential seduction for the inflow of FDI in to the country as investors don't have to worry about time and money spent handling the forex instability. Another essential benefit that the gulf has is . its geographic position, situated at the intersection of three continents, the region functions as a gateway towards the quickly growing Middle East market.

Countries across the world implement different schemes and enact legislations to attract foreign direct investments. Some countries for instance the GCC countries are progressively implementing pliable laws and regulations, while others have cheaper labour expenses as their comparative advantage. The benefits of FDI are, of course, mutual, as if the multinational firm finds reduced labour expenses, it's going to be able to reduce costs. In addition, in the event that host country can give better tariffs and savings, the business could diversify its markets through a subsidiary branch. On the other hand, the state should be able to develop its economy, cultivate human capital, enhance job opportunities, and offer usage of expertise, technology, and abilities. Thus, economists argue, that most of the time, FDI has generated efficiency by transferring technology and knowledge to the country. Nevertheless, investors consider a many factors before carefully deciding to move in a state, but among the significant variables which they think about determinants of investment decisions are location, exchange fluctuations, governmental stability and governmental policies.

To look at the viability regarding the Gulf as being a destination for foreign direct investment, one must assess whether or not the Arab gulf countries provide the necessary and adequate conditions to encourage FDIs. One of many consequential criterion is political stability. Just how do we assess a state or perhaps a region's stability? Political stability depends to a significant level on the satisfaction of residents. Citizens of GCC countries have a good amount of opportunities to aid them achieve their dreams and convert them into realities, helping to make most of them content and grateful. Additionally, global indicators of political stability show that there's been no major governmental unrest in the area, and also the incident of such an eventuality is very not likely given the strong governmental determination plus the prudence of the leadership in these counties especially in dealing with political crises. Furthermore, high rates of misconduct could be extremely detrimental to international investments as investors fear risks like the blockages of fund transfers and expropriations. Nonetheless, when it comes to Gulf, political scientists in a study that compared 200 counties categorised the gulf countries as being a low danger in both categories. Certainly, Ramy Jallad in Ras Al Khaimah, a prominent investor would likely testify that a few corruption indexes confirm that the Gulf countries is increasing year by year in eliminating corruption.