Foreign investment law of the United Arab Emirates

100% Foreign Ownership For 13 Sectors in the UAE

Following the enactment of the UAE Federal Law No. 19 of 2018 on Foreign Direct Investment (“FDI LAW”), the UAE Cabinet has announced the positive list of activities covered by and benefiting from Article 7-3 of the FDI Law.

The UAE cabinet has approved 122 economic activities across 13 sectors that will be eligible for up to 100% foreign ownership. These sectors include:

  • Transport and storage
  • Agriculture
  • Space
  • Manufacturing industry
  • 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 eligible sectors will offer new economic opportunities for international investors looking to explore the UAE market particularly for projects involving e-commerce, research laboratories, advancement in biotechnology, logistics and supply chain, production of solar panels, hybrid powerplants and green technology.

The UAE Cabinet has further confirmed that it will be left to the discretion of the local governments at an emirate level to decide on the percentage of foreign ownership for each sector/ activity. This announcement represents a much-awaited step towards the development of foreign investment regulations in the UAE. It is expected to considerably boost the level of FDI in the UAE as a whole and cement the role of the UAE as a global business hub for foreign investments.

The list of privileges awarded to Foreign Direct Investment projects (“FDI Companies”) are extensive and include the following:

  • FDI Companies licensed under the FDI Law shall be treated as national companies within the limits prescribed by the legislation in force in the UAE and the international agreements to which the UAE is a party.
  • FDI Companies may transfer their returns outside the UAE including net annual profits, proceeds from the liquidation of the investment or the sale of all or part of their assets; and funds collected from the settlement of disputes in relation to their activities in the UAE.
  • Employees of FDI Companies may transfer their salaries, indemnities and entitlements outside the UAE.
  • FDI Companies shall be guaranteed confidentiality of technical, economic and financial information as well as investment initiatives submitted to the competent authorities or the licensing authority in accordance with the provisions of the FDI Law in a manner that is compliant with UAE applicable laws and regulations including enforced international treaties in the UAE.
  • FDI Companies, subject to obtaining the required approvals, can admit one or more shareholders; sell the business; change their legal form or enter into a merger without losing the privileges awarded to them under the FDI Law.

Lupicinio International Law Firm will continue to attend to the normative developments regarding the FDI Law that may affect our clients. For more information, visit our web site: https://bit.ly/2JpGkUc