Foreign investors have welcomed the UAE cabinet’s announcement to make 122 business activities eligible for up to 100% foreign ownership, extending the country’s FDI law passed in September 2018.
Whereas federal requirements previously capped foreign ownership of local companies at 49%, full foreign ownership will be allowed in numerous industries including ecommerce, agriculture, renewable energy and construction.
Other areas open to full ownership include information and communications, and professional, scientific and technical activities, allowing ownership in laboratories for research and development in biotechnology. This aligns with the UAE’s aim to foster innovation and scientific breakthroughs as part of its Vision 2021 programme.
The legal change is intended to reaffirm Dubai’s position as a hub for foreign investment. Greenfield FDI in the UAE reached $14.97bn between June 2018 and May 2019, compared with $7.40bn between June 2017 to May 2018, according to fDi Markets, a data service from the Financial Times.
UAE vice president, prime minister and ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum tweeted: “Our goal is to stimulate, activate and facilitate businesses… We want to open and expand new economic sectors… We want to attract new investors and new talents and enhance the global competitiveness of our national economy.”
State news agency WAM said the decision provides investors with an opportunity to acquire various shares in a number of commercial activities including the solar panels, power transformers, green technology and hybrid power plants.
As part of its decision, the cabinet also announced plans to grant UAE residency visas to investors which will be valid for up to 10 years, an increase on the current two-year validity. “With this and the Gold Visa and Permanent Residency – the UAE now has gone a step ahead of its regional peers in attracting investment – which will boost the economic growth,” Sheikh Mohammed tweeted. “This will create new industries and help create more jobs in the UAE. In the next few years, we will see strong economic growth.”