The United Arab Emirates has climbed to second position in the Global Islamic Economy Indicator (GIEI), advancing from fourth place in the previous ranking. The improvement reflects the UAE’s growing dominance as the most active investment destination in the Organisation of Islamic Cooperation (OIC) by transaction volume, with 94 deals recorded across venture capital, private equity, and mergers and acquisitions.
Foreign direct investment inflows into the UAE reached $45.6 billion in the latest measured period, equivalent to 5.24 per cent of GDP — the second-highest FDI-to-GDP ratio among OIC member countries. The figures reinforce the UAE’s status as the commercial and financial hub of the Islamic world, even as it continues to position itself as a global rather than a purely regional destination for capital.
Investment Ecosystem Driving the Rankings
The GIEI tracks performance across seven sectors that form the core of the Islamic economy: food and beverage, finance, travel, fashion, media and recreation, pharmaceuticals, and cosmetics. The UAE’s rise to second is attributed to a combination of factors: its world-class financial infrastructure, a regulatory environment that has been progressively updated to accommodate Islamic finance structures, and an increasingly diversified base of international companies choosing Dubai and Abu Dhabi as regional headquarters.
The Dubai International Financial Centre (DIFC) continues to serve as the primary institutional anchor for Islamic finance activity in the region. The centre houses the world’s largest concentration of Islamic finance institutions outside of Malaysia and Saudi Arabia, and has been increasingly attracting specialist fund managers and fintech firms with Islamic economy mandates.
Non-Oil Trade Milestone
The GIEI improvement aligns with a broader picture of UAE economic strength. The country’s non-oil foreign trade surged 26 per cent in 2025 to surpass $1 trillion — a milestone that underscores the success of the UAE’s longstanding effort to build a trade and logistics economy that functions independently of hydrocarbon revenues.
The UAE’s GDP expanded 6.2 per cent year-on-year to reach AED 1.9 trillion ($517.2 billion) in 2025, with non-oil GDP growing even faster at 6.8 per cent. These growth rates are broadly consistent with the UAE’s 2026 target of 5.6 per cent GDP expansion, which would place it among the fastest-growing middle-income economies globally.
Dubai and Abu Dhabi: Complementary Hubs
Within the UAE, Dubai and Abu Dhabi play distinct but complementary roles in the Islamic economy. Dubai functions as the primary trade and financial hub, with its ports, free zones, and banking sector handling the majority of OIC-related commercial flows. Abu Dhabi, through institutions such as Abu Dhabi Islamic Bank (ADIB) and the Abu Dhabi Global Market (ADGM), provides the heavyweight capital market infrastructure that underpins sovereign and corporate Islamic debt issuance across the GCC.
The emirate-level specialisation has created a combined UAE offering that is difficult for any single GCC peer to replicate, giving the country a structural advantage in the GIEI rankings that is likely to persist over the medium term.
Outlook
The UAE’s progression to second place in the GIEI positions it directly behind Malaysia, which has held the top spot in Islamic economy rankings for multiple consecutive years and benefits from deep domestic institutional demand and a long-established regulatory framework for sukuk and Islamic banking. Analysts tracking the rankings expect the gap between the two countries to narrow as the UAE intensifies its focus on halal industry standards, Islamic fintech, and sustainable sukuk issuance.
