Various countries across the world have implemented schemes and regulations intended to entice foreign direct investments.

The volatility associated with exchange rates is one thing investors simply take seriously due to the fact unpredictability of exchange rate changes might have a direct impact on the profitability. The currencies of gulf counties have all been pegged to the US 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 view the fixed exchange rate being an crucial attraction for the inflow of FDI in to the region as investors do not have to be concerned about time and money spent handling the foreign exchange instability. Another crucial benefit that the gulf has is its geographical position, located at the intersection of Europe, Asia, and Africa, the region functions as a gateway to the rapidly growing Middle East market.

To look at the suitableness of the Arabian Gulf as being a destination for international direct investment, one must evaluate whether the Arab gulf countries provide the necessary and adequate conditions to promote FDIs. One of the consequential elements is political stability. How can we assess a state or perhaps a region's stability? Political stability depends to a large extent on the satisfaction of individuals. Citizens of GCC countries have a good amount of opportunities to greatly help them attain their dreams and convert them into realities, which makes many of them content and grateful. Furthermore, worldwide indicators of political stability reveal that there has been no major governmental unrest in in these countries, as well as the occurrence of such an eventuality is extremely unlikely given the strong governmental determination and the prescience 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 including the obstructions of fund transfers and expropriations. Nonetheless, in terms of Gulf, political scientists in a study that compared 200 counties deemed the gulf countries as a low danger in both categories. Indeed, Ramy Jallad in Ras Al Khaimah, a prominent investor would probably attest that several corruption indexes concur that the Gulf countries is improving year by year in eliminating corruption.

Nations across the world implement website various schemes and enact legislations to attract foreign direct investments. Some countries like the GCC countries are increasingly adopting pliable laws, while some have actually cheaper labour expenses as their comparative advantage. Some great benefits of FDI are, of course, mutual, as if the international organization discovers lower labour costs, it will likely be in a position to reduce costs. In addition, in the event that host state can give better tariffs and savings, the business enterprise could diversify its markets by way of a subsidiary. Having said that, the country will be able to develop its economy, develop human capital, enhance employment, and provide usage of expertise, technology, and skills. Thus, economists argue, that in many cases, FDI has led to effectiveness by transferring technology and knowledge towards the host country. Nevertheless, investors think about a myriad of aspects before carefully deciding to invest in new market, but among the list of significant factors that they give consideration to determinants of investment decisions are location, exchange volatility, political stability and governmental policies.