UAE's new foreign ownership law a key inflection point in economic leap

The UAE has entered a strategic inflection point in its vibrant journey to become the most sought-after global investor hub with the rolling out of a series of reforms, including the full business ownership law and the 10-year golden visa rule for foreign investors and professionals.

While the game-changing reform allowing 100 per cent ownership to foreign entrepreneurs and businesses will open the floodgates of foreign direct investments, the residency law will help attract and retain talents and professionals and boost confidence levels of investors about the security and long term sustainability of their investments in the UAE.

Ranked 19th on Kearney’s latest FDI Confidence Index, the UAE has seen FDI inflow jumping over 34 per cent to $14 billion in 2019 from $10.4 billion in 2018.

Most analysts and business leaders greeted the news with excitement and bullishness while looking for greater clarity on the scope and efficacy of the FDI law on the UAE’s broader investment and business landscape which is coming into force on December 1.

They said while the new law covers in its “positive list” 122 different economic activities, further details on the investment criteria for the FDI licence eligibility are needed the size of capital requirements for various segments are not yet specified.

Dr Azad Moopen, founder chairman of Aster DM Healthcare, said the FDI reform is a remarkable move “enabling the country to boost its competitive advantage in several sectors.”

“The new law provides significant impetus to long-term players like us to strengthen our commitment to the market and also prompt foreign companies to think of long-term investments in the UAE, turning the country into a strategic hub for development in the region,” said Dr Moopen.

Paras Shahdadpuri, chairman, Nikai Group, said the 100 per cent ownership law would bring UAE's investment ecosystem on par with the developed countries.

“I hope this decree will also be applicable to most of the businesses such as retail, trade, logistics etc. I am positive that if all the sectors, except the defence-related or other strategic sensitive sectors, are opened up with 100 per cent ownership, the UAE could expect billions of dollars FDI in a few years,” said Shahdadpuri.

Faizal Kottikollon, founder & chairman, KEF Holdings, said the recent series of bold reforms that signal a paradigm shift in UAE’s investment and business environment could not have come at a more opportune time as now when this investor-friendly nation is bracing for dramatic come back from the Covid-inflicted respite in its advancement.

“The FDI law is certain to spark a major spurt in foreign direct investments into this land of infinite possibilities. It will take the global investor confidence to a higher realm, attracting foreign capital and entrepreneurs on an unprecedented scale,” said Kottikollon.

Dr Ram Buxani, chairman of ITL-Cosmos Group, described the FDI reform as “a master stroke.”

“This country of dunes is likely to attain further peaks in no time. With its infrastructure excellence and the recent wave of pro-investor reforms, this second largest Arab economy is set to lure global investors and businesses in droves,” said Dr Buxani.

Dr Shamsheer Vayalil, chairman and MD, VPS Healthcare, said the new foreign investment law is “a testimony to the exemplary wisdom and vision of the leadership of this nation.”

“The leadership has taken the right decision at the perfect time, particularly when the global economies are reinventing strategies to overcome the challenges posed by the pandemic,” said Vayalil. — issacjohn@khaleejtimes.com