UAE law allowing 100% foreign ownership of companies

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.

Dubai Scraps Bank guarantee requirement for Tourism firms

Companies in the tourism industry will soon be able to get back the bank guarantees they had earlier set aside when they started doing their business in Dubai.

Entrepreneurs who are planning to start a business will also no longer need to raise a huge amount as a guarantee before securing a trade license in the emirate.

Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism) confirmed on Tuesday that it has initiated efforts to release Dh250 million in bank guarantees that have been furnished by tourism-related service providers, following a decision to scrap the requirement to start a travel and tour business in the emirate.

The move will not only lower the cost of doing business, but it will also boost the liquidity of local businesses and enable them to reinvest some money into the economy. It will benefit over 2,000 travel and tour agencies operating in Dubai.

Previously, tourism companies including inbound and outbound tour operators were required to put up a bank guarantee ranging from Dh100,000 to Dh600,000, depending on the type of business activity, to Dubai Tourism, as a precondition for the Department of Economic Development (DED) to grant a trade license.

“Cancellation of this provision enables Dubai Tourism to refund the bank guarantees to the companies providing much-needed funds to reinvest in their business and grow their services,” the government agency said in a statement.

“Similarly, going forward for all new ventures, investors and entrepreneurs will also no longer need to provide such bank guarantees to Dubai Tourism either to open a tourism establishment or to offer specific travel or tour-related services and activities in Dubai.”

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UAE issues resolution on Child Protection Law

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, has issued Cabinet Resolution No. 52 of 2018 on regulations concerning Federal Law No. 03 of 2016 on Child Rights (Wadeema's Law). The Resolution was published in the latest issue of the Official Gazette.

The regulations included 23 clauses, including conditions for employing and training minors, workplace conditions, procedures to report child rights violations, conditions to become child welfare officers (child protection specialists), and conditions and obligations foster families must meet.

The regulations also stipulate that the Ministry of Community Development, in coordination with the Ministry of Human Resources and Emiratisation, shall study, with due care, applications submitted to employ minors, with the condition that written consent from the parent or the legal guardian of the minor is provided. It details that minors less than 15 years of age cannot be granted employment and that minors that meet the minimum age requirements must also be deemed "fit to work" as per conditions determined by the two ministries.

UAE extends amnesty by December 31st

The UAE’s visa amnesty has been extended for one more month granting amnesty seekers more time to settle their visa status in the country, an official told.

Lieutenant Colonel Ahmad Al Dallal, the spokesperson at the General Directorate of Residency and Foreigners Affairs of the Ministry of Interior, said the amnesty extension came under the directives of  His Highness UAE President Shaikh Khalifa Bin Zayed Al Nahyan and would now end on December 31.

The extension is the second time the UAE amnesty period has been lengthened. Originally launched on August 1, the amnesty period was initially set for three months until the end of October; it was then extended until November 30 and then again until December 31.

"The authority will on Tuesday continue to welcome people wishing to avail of the amnesty initiative at the nine registration centres across the UAE so that they can rectify their status," the FAIC said in a statement.

The "Protect Yourself by Modifying Your Status" initiative that granted a three-month grace period for illegal residents to modify their status or leave the UAE without facing fines or legal issues started on August 1 until October 31, 2018.  But the authority extended the amnesty scheme for a month which was supposed to end on November 30, 2018, after the expiry of the extension.

Brigadier Saeed Rakan Al Rashidi, Acting Director-General of Foreigners and Ports Affairs at the Federal Authority for Identity and Citizenship, said the decision to extend the deadline for another month comes as a "generous initiative" to mark the country's 47th anniversary.

"The extension of the amnesty initiative is a generous gesture from the UAE leaders which is also characterized by their keenness for humanity and supporting people," said Al Rashidi.