DUBAI - Foreigners in the UAE may soon be able to own 100 per cent of businesses located outside the nationís economic free zones, under more liberal rules that officials in Dubai are promoting in the hope of boosting foreign investment to help counter the financial slowdown, a top Dubai government official said on Sunday.
Government officials of all seven emirates are now assessing the likely benefits, and costs, of such a step, said Khalid Al Kassim, the Deputy Director General for Economic and Sector Development at Dubai’s Department of Economic Development, or DED. Al Kassim said it is in the UAE’s best interest to ease the restrictions that now bar foreigners from owning the majority of any business outside a free zone.
“We are trying to push 100 per cent ownership for the whole country, but Dubai alone cannot do it,” he told a business meeting organised by the DED and the Italian Business Council of Dubai and Northern Emirates.
The UAE has 30 free zones where foreigners can be sole owners of a business. Otherwise, an overseas firm can only establish a presence in the UAE by setting up a branch or forming a company in which a local sponsor — a UAE citizen — owns at least 51 per cent.
Current laws governing property and business ownership are being examined, and the federal government will introduce new rules and regulations aimed at attracting more investors, Al Kassim said. He did not give a time frame for approval of these new rules.
Dr Nasser Saidi, Chief Economist at Dubai International Financial Centre, said such a change would not only attract substantial new foreign direct investment in the UAE but would also help generate jobs. Foreigners set up 342 projects last year in Dubai, up 59 per cent from 2007, while foreign direct investment in the emirate soared by 123 per cent to a total of $21 billion, according to a study released last month by the Financial Times FDI Intelligence.
“We are looking to revise rules and regulations,” Kassim said. “If there are concerns, the laws will be made flexible according to the needs of the business community.”
Officials are also considering making it cheaper for foreigners to do business as way of encouraging investment. “Any fee that does not provide a service to business would be removed,” Kassim said.