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A catalyst for growth? UAE approve 100% foreign ownership

A catalyst for growth? UAE approve 100% foreign ownership

Forming a significant part of the United Arab Emirates' push to attract increased foreign investment and achieve even and sustainable development, on 02 July 2019 UAE President and Prime Minister, Sheikh Mohammed Rashed Al-Maktoum announced the 13 sectors granted 100 per cent foreign ownership by the Foreign Direct Investment Law ("FDI Law").

With previous foreign ownership outside of the free zones restricted to 49 per cent, the decision to lift the cap provides ample opportunity for investors to invest in 13 key business sectors covering 122 economic activities. Each of the seven Sheikhdoms will have the discretion to specify their own limits for foreign ownership of focal business sectors.

The move is hoped to increase the global competitiveness of the UAE economy by stimulating new and existing economic sectors. The sectors that now permit 100 per cent foreign ownership are:

  • Transport and storage
  • Agriculture
  • Space
  • Manufacturing
  • Renewable energy
  • Hospitality and food services
  • Information and communication
  • Professional, scientific and technical activities
  • Administrative and support services
  • Educational activities
  • Healthcare
  • Art and entertainment
  • Construction

The UAE has more than 50 geographically demarcated free zones, which prior to the recent announcement were the main driving force behind the UAE's diversification away from oil as they are permitted to grant 100 per cent foreign ownership, independent from 'onshore' in the UAE. However, although the UAE is the Arab world's top recipient of foreign direct investment (2018: USD 11 billion) economic growth has stagnated, registering a 1.3 per cent figure for last year.

The move to further liberalise existing domestic ownership restrictions is part of a comprehensive initiative to combat the laggard growth, as identified by the government's record fiscal budget for 2019. You can read part one of our two part series examining how the UAE is diversifying its economy to attract investment, here.

Commenting on the announcement to lift foreign ownership restrictions, Managing Director for Ocorian UAE, Nina Auchoybur added: "This is great news for the UAE and should serve as a catalyst for growth and investment in the region, opening up the Emirates even further. Investors will look to make use of the robust infrastructure already in place, utilising trusted administrative service providers such as Ocorian. This is certainly an exciting time in the UAE's growth journey."

From fund administration and corporate services, to the establishment of special purpose vehicles (SPVs), companies and foundations, we support you to take full advantage of the region’s opportunities. Click here to see our offering in the UAE.

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