Introduction
The government of UAE has recently been venturing into new strategies as to bring economic growth and prosperity in the country, as the oil prices continue to decline the government has taken initiatives to increase the revenue through different sectors, specially through Foreign Direct Investment.
Therefore, UAE has introduced a law namely “Foreign Direct Investment” which will enable and attract foreign investors to contribute in the economy of the country.
An Overview
This law now allows to permit the foreign shareholding percentage from 49% to 100% in many sectors, enabling the foreign investors to invest in the country and no longer requiring the need for local sponsorship which was mandatory previously.
The UAE cabinet has approved 122 economic activities across 13 sectors that will be eligible for up to 100% foreign ownership which includes transport and storage, agriculture, Hospitality and food services, Art and entertainment Construction, Educational activities, Healthcare etc. and also has published a list
of activities where the foreign direct investment will be restricted such as the oil and gas sector as to promote and safeguard the Emirati welfare.
The law has highlighted other provisions as well which have defined the application for investment, the rejection of the application for investment, what constitutes the capital invested and penalties imposed for certain non-compliances.
This step aims to promote the investment environment, economic growth and prosperity in the country and seems like a significant step forward, inviting investors to enjoy the UAE’s geographical location and be a factor in the growth of the country’s economy.
TRC Pamco will be happy to assist you in making this determination; provide preliminary assessments of your company’s current shareholding structure and assist with possible future strategies that can result in strengthening your shareholding, in compliance to UAE legislation.
Please let us know if you have any queries and our team will be happy to schedule a session to address all your queries and requirements.