The economy minister of Dubai, Sultan bin Saeed Al Mansoori, said that the UAE government aims to publish the list of positive sectors in terms of foreign ownership which can be up to 100 percent by the first quarter of 2019. There is a new foreign investment law that allows foreign investors to own more than 49 percent up to 100 percent in UAE businesses.
UAE free zones allow 100 percent foreign ownership; however onshore businesses limit foreign ownership to only 49 percent. According to the economy minister, the issuance of the Federal Law by decree number 19 of 2018 about foreign direct investment will put it at the top of countries that are attractive for investments globally. Al Mansoori said this during the World Economic Forum’s Global future council meeting in Dubai. He added that the purpose of the said law is to motivate global corporations to invest in the markets of the UAE in support to the country’s Vision 2021. Examples of such market are technology, renewable energy, artificial intelligence, innovation, and space.
The expected growth in the UAE investments this year is 15 to 20 percent. The law is a vital step in strengthening the legal system that can aid in UAE’s economic environment. It is expected to highlight the incentives and also the elements to a new stage. The economy minister said that the law provisions apply to all the foreign direct investment projects which are established or licensed in the UAE. The law does not apply to all the financial and non-financial free zones of the country.
According to the law provisions, there are three categories of sectors and economic activities that will be known. The first one is the positive list. This list includes those that are approved by the UAE government to be accessible to foreign ownership by 100 percent or less. The sectors are determined by the Foreign Direct Investment Committee. The second is the list of sectors that are limited to national investment. This is called the negative list. This list includes services that are special in nature and other activities and services that may have a negative impact on national companies that conduct the same activities. The third list includes those sectors that are not part of the positive list. The law stipulated that the UAE cabinet could approve a project in such sectors as requested by the local government and recommended by the investment committee.
Al Mansoori said that the next move is to create the Foreign Direct Investment Committee and establish the Foreign Direct Investment Unit. The priority sectors are technology, space, and sustainability sectors. The positive list is targeted to be published by first quarter of 2019.
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