UAE President Sheikh Khalifa bin Zayed Al Nahyan has issued a decree to establish a new foreign direct investment unit at the Ministry of Economy.
The plans aim to boost the UAE’s attractiveness for investment, create jobs and diversify the economy.A law allowing 100 per cent foreign ownership of companies in the UAE is now in force after being published in the country’s Official Gazette.
Under the details, published by state news agency WAM, the FDI unit will be responsible for proposing new policies and “determining its priorities, plans and programmes associated with them”.
It will also establish a database of investment data and existing FDI projects and help create an attractive environment for investment by facilitating registration and licensing of projects.
“The foreign direct investment projects existing before the entry into force of the provisions of this Decree-Law shall retain all the privileges prescribed for them in accordance with the legislation, agreements and contracts derived therefrom within the period specified in such legislation and agreements, according to the statement.
Foreign companies seeking to establish an entity onshore in the UAE would previously have to team up with a UAE national, who was required to own 51 per cent of the shares of the company.
Among the key details is a framework allowing the UAE Cabinet to exercise its powers to permit increased levels of foreign ownership, it said.
Clarification regarding the steps required of companies to apply to own more than 49 per cent of shares in selected sectors of the economy were also revealed.
Sectors restricted from 100 per cent foreign ownership appear on a ‘negative list’.
They include:
- Oil exploration and production
- The investigation, security, military (including manufacturing of military weapons, explosives, dress, and equipment)
- Banking and financing activities
- Insurance
- Pilgrimage and Umrah services
- Certain recruitment activities
- Water and electricity provision
- Fishing and related services
- Post, telecommunication and other audiovisual services
- Road and air transport
- Printing and publishing
- Commercial agency
- Medical retail (including pharmacies)
- Blood banks, quarantines and venom/poison banks
A separate ‘positive list’ covers sectors open to greater foreign investment. However, the new law allows the cabinet to add or remove sectors on each list at a later date. Details of sectors on the positive list are not mentioned in the new law but are expected to include the manufacturing and service industries.
