Foreign direct
investments (FDIs) are instrumental in spurring economic growth and
development. However, FDI inflows depend on existing corporate governance (CG)
systems and practices. The United Arab Emirates (UAE) has a robust CG framework
driving FDI inflows into the country. Relaxing foreign ownership in UAE onshore
companies has liberalized the FDI market, allowing more foreign investors to
invest in the country. Nonetheless, foreign investors are increasingly being
forced to navigate a complex legal landscape including federal laws and
emirate-specific regulations. Thus, this research explored the impact of CG
practices on FDI inflows into the UAE. This research involved a narrative literature
review to analyse and summarize existing research evidence critically. This
study has established a positive relationship between CG practices and FDI
inflows into the UAE. Three CG practices emerged from this research: ownership
structures; transparency and disclosure; and ethical business conduct. These
practices mediate the relationship between CG and FDI inflows. Research
findings have also shown that inconsistent legal frameworks could undermine
investment efficiencies as foreign investors struggle to navigate complex laws
and legislation. Therefore, a harmonized CG legal framework is necessary to
streamline FDI inflows into the country. The UAE currently has diverse legal
frameworks with each governing specific CG elements. Harmonization will provide
a consistent regulatory environment to reduce transaction costs and enhance
trust among investors regarding their rights and protections.