New UAE investment law to come into effect by early 2018
The long-awaited UAE investment law, which seeks to allow more than 49 per cent ownership to foreign investors in some specific business sectors, is expected to be introduced in the first quarter of 2018, Sultan bin Saeed Al Mansouri, Minister of Economy, said on Monday.
The final draft of the landmark law is awaiting the UAE Federal National Council approval before it becomes a law by the beginning of 2018, Al Mansouri told Khaleej Times on the sidelines of the UAE-India Partnership Summit in Dubai.
The impending reform, which is expected to drastically change the investment landscape of the UAE, is widely expected to create significant growth opportunities by attracting more foreign direct investments, especially into the non-oil sectors.
The law will allow foreign equity ownership up to 100 per cent in certain sectors. The recently introduced UAE Commercial Companies Law, contrary to the expectations of the global investor community, did not amend the 49 per cent limit on foreign ownership. Under the new CCL, a foreign investor can only own a maximum of 49 per cent of a locally incorporated company, apart from companies incorporated in a free zone in which they can own 100 per cent. In a public joint stock company, while there is no 51 per cent UAE ownership needed, but there is a 51 per cent GCC stake-holding requirement.
The UAE has been working on several bold reform initiatives, including the bankruptcy law, to boost investor confidence for the past several years. The UAE bankruptcy law, which allows companies in financial distress to restructure, came into effect last year.
Al Mansouri said the outlook for the economy is brightening and expects a three per cent growth in 2018 in the face of the regional and global macroeconomic challenges. "With two years into Dubai World Expo 2020, the economic growth momentum is expected to pick up on the back of a vibrant non-oil sector as the country remains on track to establish a diverse knowledge- and innovation-driven economy," he said.
The UAE's economic diversification policy has been a main factor in the country's resilience amid various economic challenges, according to the minister. The UAE has been able to increase the GDP contribution of the non-oil sector to over 77 per cent. Manufacturing, construction, retail, real estate, logistics, transportation, telecommunications, and tourism - all of which, along with strategic policies and programs, continue to drive the growth.
The industrial sector accounts for 16 per cent of the UAE's GDP and the nation intends to increase this to 20 per cent by 2020 and ultimately to 25 per cent by 2025, Al Mansouri said.
The minister said in order to meet the objectives of UAE Vision 2021 of building a sustainable, highly diversified and knowledge-based economy driven by empowered nationals, the UAE is on track to take the lead in the digital industry and actively promote diversified manufacturing, R&D, innovation, and sustainability, the minister noted.
At the event, an NRI Emirati Investors Group formed by the Business Leaders Forum, announced that it would raise $1 billion in commercially viable big-ticket projects in India.
Present at the forum were Abdullah Al Nuaimi, UAE Minister of Infrastructure Development, Mohammed Sharaf, Assistant Minister for International Cooperation, Indian Ambassador Navdeep Singh Suri and Vipul, Consul General of India, among others. - email@example.com
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