New UAE Investment Law

PUBLICATIONS / Articles / 2017 / New UAE Investment Law
New UAE investment law will come into effect in the first quarter of 2018. The long-awaited UAE investment law will allow more than 49 per cent ownership to foreign investors in some specific business industries.
 

The coming reform, which is expected to drastically change the investment landscape of the UAE, is widely expected to create significant growth opportunities by attracting more foreign direct investments, especially into the non-oil sectors.

The law will allow foreign equity ownership up to 100 per cent in certain sectors. The recently introduced UAE Commercial Companies Law, contrary to the expectations of the global investor community, did not amend the 49 per cent limit on foreign ownership. Under the new CCL, a foreign investor can only own a maximum of 49 per cent of a locally incorporated company, apart from companies incorporated in a free zone in which they can own 100 per cent. In a public joint stock company, while there is no 51 per cent UAE ownership needed, but there is a 51 per cent GCC stake-holding requirement.

The UAE has been working on several bold reform initiatives, including the bankruptcy law, to boost investor confidence for the past several years. The UAE bankruptcy law, which allows companies in financial distress to restructure, came into effect last year.

Sultan bin Saeed Al Mansouri, Minister of Economy, stated that the outlook for the economy is brightening and expects a three per cent growth in 2018 in the face of the regional and global macroeconomic challenges. "With two years into Dubai World Expo 2020, the economic growth momentum is expected to pick up on the back of a vibrant non-oil sector as the country remains on track to establish a diverse knowledge- and innovation-driven economy," he said.

The UAE's economic diversification policy has been indeed the main factor in the country's resilience amid various economic challenges, according to the minister. The UAE has been able to increase the GDP contribution of the non-oil sector to over 77 per cent. Manufacturing, construction, retail, real estate, logistics, transportation, telecommunications, and tourism - all of which, along with strategic policies and programs, continue to drive the growth. At the moment, the industrial sector accounts for 16 per cent of the UAE's GDP and the nation intends to increase this to 20 per cent by 2020 and ultimately to 25 per cent by 2025.

 

Do you wish to stay informed?

Thank you for your interest in Freemont Group, the specialists in company formation, asset protection and legal and advisory . Feel free to contact us with any inquiry you might have. We will provide you with a free initial consultation, and a customized solution for your personal situation.