Foreign investors in the United Arab Emirates (UAE) will soon be able to own their assets entirely, following a watershed change to the law. The legal change, which applies to certain onshore business sectors, is awaiting approval from the UAE’s Federal National Council before it becomes law by the final quarter of 2018.
Sultan bin Saeed al-Mansouri, the UAE minister of economy, told fDi in April 2018 that the legal change was his priority when it came to improving the country’s FDI landscape.
“After five years of discussion we finally have the last version of the investment law. Many innovators [and other investors] would like to come to the UAE and own their innovation here at a higher percentage than 49%, as per the current law. So we need liberalise and open up more. The UAE has a very safe and excellent business environment even without the new law [which will only] further safeguard investors’ rights,” he said.
Analyst FocusEconomics said the new investment law, “along with higher oil prices and tourism, is poised to help private consumption bounce back from the VAT implementation”.
It added: “On the other hand, the Organization of the Petroleum Exporting Countries agreement should keep oil output largely stable in the year. The main risks are a flare-up of regional tensions, which could harm investment, and a downturn in oil prices.” The forecast for the UAE’s gross domestic product is 2.7% in 2018, and 3.2% in 2019.
Global tensions, such as a US-China trade war, are also a concern for Mr Mansouri. “We are carefully watching what is happening. These are big nations. If a [trade war] happened, it would be a chain reaction that would affect many nations and certain products, services and consumers,” he said.
Mr Mansouri added that he would like to see “more manufacturing investment [by] creating partnerships and flexibility within this industry”.
“Another area we are focusing on for FDI is pharmaceuticals and solar energy, which is part of our strategy. Any kind of IT areas are of interest to us because this is where you open up the world,” he added.