VP stresses nation must continue developing transportation systems to preserve excellence
The UAE's logistics system is the strongest and most efficient in the region and the private sector is the engine for the future economy, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said on Saturday.
He said the UAE must continue developing its transportation systems to preserve excellence in this regard.
"We want to achieve another qualitative leap in infrastructure, energy and transportation, and this leap must be under one comprehensive and integrated plan," Sheikh Mohammed said during a meeting with a team from the Ministry of Energy and Infrastructure.
Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs; Mohammed bin Abdullah Al Gergawi, Minister of Cabinet Affairs; and Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Infrastructure, attended the meeting.
"Today, the UAE is the region's biggest hub for business and innovation, and energy and infrastructure projects are key to sustain this distinction," Sheikh Mohammed said.
He asserted that the private sector is the engine for future economy and the UAE will continue developing partnership with the private sector in the fields of infrastructure, energy, transportation and housing projects.
Al Mazrouei presented to Sheikh Mohammed and his accompanying delegation the ministry's 10-year plan, aimed at integrating the energy, infrastructure, housing and transportation sectors into one comprehensive asset management system to enhance the services and ensure sustainability.
He also briefed the Prime Minister about the country's pioneering rankings in the energy, infrastructure and housing sectors as the UAE has maintained its first global ranking for the third consecutive year with scores of 100 per cent in all 'Getting Electricity' indicators in the World Bank's Doing Business 2020 report.
The UAE was also ranked first regionally and 12th globally in terms of the quality of infrastructure, and was ranked first regionally and seventh globally in terms of the availability and quality of road and transport infrastructure.
"The new comprehensive asset management system would reduce maintenance costs by 20 per cent," Al Mazrouei said.
He also reviewed the strategy and initiatives for electricity and future energy for the next 50 years.
In a related context, the minister spoke about the objectives of the Federal Centre for Road Network Operations Management, which the ministry is nearing completion.
Al Mazrouei also shed light on the achievements of the citizens' housing sector, its development initiatives, a mechanism for sustainability and meeting future needs, preserving the national gains in that area and the mechanism that works accordingly.
source: zawya
Foreign direct investment (FDI) inflow into the UAE jumped over 34 per cent to $14 billion (Dh51.4 billion) in 2019 as compared to $10.4 billion (Dh38.2 billion) in the previous year following major investments by US private equity firms in Abu Dhabi's energy sector.
The UAE surpassed Turkey to become the largest recipient of foreign investment last year in the Middle East and also accounted for half of total investment that flowed into the region in 2019, according to World Investment Report released by UN Conference on Trade and Development (Unctad).
The large increase in FDI to UAE was largely due to major investments made to Abu Dhabi National Oil Company (Adnoc) assets.
The US-based asset managers BlackRock and KKR Global Infrastructure acquired a 40 per cent stake in Adnoc's pipeline assets for about $4 billion.
Italy's Eni SpA also acquired a 20 per cent stake in Abu Dhabi Oil Refining Company for more than $3 billion.
"Abu Dhabi has supported FDI inflows to the UAE for the past few years with its streamlined procedures and capacity in facilitating megadeals. In 2019, the emirate further strengthened its commitment to foreign investment by launching the Abu Dhabi Investment Office under the Ghadan 21 programme, a broad-based initiative to enhance the commercial ecosystem, including by cultivating an attractive and diversified environment for FDI," Unctad said.
It said the approval of the positive list for FDI in the UAE in April 2020 paves the way for full foreign ownership in many activities and could support investment flows to the country in the longer term.
While FDI outflow from the UAE also moved up slightly last year from $15 billion to $16 billion, an increase of 5.5 per cent.
Regional performance
FDI to Middle East declined by 7 per cent to $28 billion as against $30.1 billion in 2018. Just three countries - the UAE, Turkey and Saudi Arabia - accounted for the majority of inflows in 2019.
FDI inflows into Turkey slumped from $13 billion in 2018 to $8.4 billion last year, slipping into the second position after the UAE.
In the GCC, Saudi Arabia was the second largest recipient of foreign investment, receiving $4.56 billion last year as compared to $4.24 billion in the previous year.
Flows to Saudi Arabia increased for the second consecutive year by a further 7 per cent to $4.6 billion, mainly because of a few large M&A deals.
FDI to Bahrain fell by 43 per cent to below $1 billion in 2019. The main reason was the country's investment profile, which centres on light manufacturing and services, which are more sensitive to global and regional economic headwinds.
Regional outflows
FDI outflows from Middle East contracted significantly, from $50 billion in 2018 to $36 billion in 2019.
In Saudi Arabia, outward investment declined from $23 billion in 2018 to $13 billion, and firms in Kuwait divested $2.5 billion of overseas investments.
Major outward investments announced in 2019 included a $10 billion project by Saudi Aramco to develop oil and gas facilities in China and a $9 billion oil project by Qatar Petroleum to expand its existing facilities in the US, although it is unclear when these projects will be fully realised.
FDI inflow into the Middle East, 2019
UAE: $13,787m
Turkey: $8,434m
Saudi Arabia: $4,562m
Oman: $3,125m
Lebanon: $2,128m
Bahrain: $942m
Jordan: $916m
Kuwait: $104m
Palestine: $176m
Top global countries for FDI inflows, 2019
US: $246B
China: $141B
Singapore: $92B
Netherlands: $84B
Ireland: $78B
Brazil: $72B
Hong Kong: $68B
UK: $59B
India: $51B
Canada: $50B
source: investinabudhab
Over the years Dubai has cemented its place in the world as the ultimate destination for luxury, shopping and entertainment. Now, with the UAE government’s foresight and vision, Dubai has gained a spot as one of the world’s most desirable destinations.
Every year the number of foreigners that are investing in Dubai is increasing. The rise in foreign investment has given birth to multiple business opportunities and further increased number of business setup in Dubai.
Following are some of the reasons that will emphasize and explain to you why investing in Dubai in 2020 is a sensible move for you:
1) A Flourishing Economy:
Dubai has completely transformed itself. The journey from an economy that was totally dependent on oil to an economy that is now the hub of international business is an awe-inspiring tale.
Thanks to the UAE government’s policies, the region is now primarily focused on its non-oil sector. Dubai’s business sector has attracted over 21.6 billion dollars in foreign investments alone.
That has boosted its GDP positively at the moment it is 2.9% and is predicted to grow dramatically in the upcoming years. Hence, Making it a safe haven for investors to start a business in Dubai with minimal chances of failure.
2) Numerous Business Opportunities:
Because of the high influx of investment that is pouring in from all sides in Dubai. The city offers immense business opportunities to anyone looking to start a business.
From freelancers to an entrepreneur to small business owners, all are welcome to transform their business ideas into a reality.
Even seasoned business owners will find a business opportunity too lucrative to pass up. UAE has slowly transformed itself into land suitable for investment. It currently offers multiple industries ranging from retail, tourism, media etc. for entrepreneurs to establish business setups in Dubai.
3) Various Locations:
The UAE, including Dubai, offers several attractive locations to set up a business. These locations comprise of Mainland, Free Zones and Offshore. Moreover, all of these locations have specific characteristics that make them suitable for a certain type of investors and less suitable for others. Therefore, business owners need to be clear about the business idea before starting a business in Dubai.
4) Incentives Launched by the Government:
The government of the UAE launches numerous incentives every year firstly, to capture and seize the attention of foreign investors to continue investing in Dubai.
Secondly, to boost and uplift its economy. The government has executed its vision 2020 with absolute success as it has carved out business opportunities in both the private and government sectors. Furthermore, the Smart Dubai project has led to immense capital investment in Dubai.
Dubai government is said to launch 130 initiatives in the coming six months to entice foreigners in setting up a business in Dubai.
5) Hundred percent Return on Invested Capital Ensured:
Every business owners worst nightmare is the failure of the business. What follows is the tedious and painful process of liquidation and reclaiming of property etc.
For that reason, the Dubai government has made this process easier and quicker for investors by allowing complete freedom. The government is providing 100% repatriation on the invested capital, and total profit earned. This move is drawing more business owners to invest in Dubai.
6) Minimal or No Personal Tax:
While launching a business in a foreign country, the thing that most concerns the business owners and entrepreneurs alike is taxes.
Business professionals tend to shy away from a region that has rigid and expensive taxation policies. The Dubai government to gain the interest of international investors to come and invest in Dubai has lowered its taxes. The business setups in Dubai don’t have to pay any personal taxes
7) Access and Exposure of the International Market:
Most beneficial manoeuvre for any company is easy to access to a global market. By choosing to start a company in Dubai, you can give your company a head start and provide it with exposure and access to the worldwide market.
This easy access will only help in growth and your business. And it can also aid with its expansion in other emirates in the future.
You can open a branch office in Dubai to expand your business further.
8) Dubai Expo 2020:
With the Forthcoming Expo 2020, the world has its eyes on Dubai and is very interested in investing here. The Expo 2020 is dubbed to be a game-changer that is expected to attract more than twenty-five million global visitors.
Multiple investment opportunities involving multinational partnerships are expected to happen due to this event. The Expo mainly focuses on uplifting sole proprietors, SMEs, budding entrepreneurs, and start-ups functioning in Dubai.
In conclusion the Expo 2020 brings business opportunities that are worth investing in.
So in a nutshell, we have elaborated the main reasons as to why you should invest in Dubai in 2020. If you are seeking a promising investment platform for your business setup, With the Forthcoming Expo 2020, the world has its eyes on Dubai and is very interested in investing here.
The Expo 2020 is dubbed to be a game-changer that is expected to attract more than twenty-five million global visitors. Multiple investment opportunities involving multinational partnerships are expected to happen due to this event.
The Expo mainly focuses on uplifting sole proprietors, SMEs, budding entrepreneurs, and start-ups functioning in Dubai. Then you should look no further as Dubai is a land filled with business opportunities. The best option for optimum growth of your business setup is in Dubai.
To capitalize on the ultimate benefits presented by Dubai, it is advised that you hire business setup consultants who are well-versed in the business setup process.
KWS Middle East is the premier example of business setup consultants in Dubai.
They have helped countless clients in incorporating their businesses in Dubai and the rest of the UAE.
Our business consultants are talented and well-skilled to guide you through the treacherous path of company formation.
source: kwsme
Increase in Business licenses in Dubai reflects the emirate's attractiveness despite regional challenges
30 Jan 2020 Written by Admin AdminNearly 38,400 new business licences were issued in Dubai in 2019, a record growth of 90 percent compared to the previous year (20,129), Dubai Economy has announced,
Dubai Economy said a total of 184,437 jobs were created, adding that the figures confirmed that the emirate’s economic competitiveness and its ability to attract investors to grow and expand their businesses has been further strengthened in 2019, as reported by Arabian Business.
According to a recent report by the Business Registration and Licensing sector at Dubai Economy, 38,377 new licences were issued in 2019 while the past year also saw a decrease in the number of licences cancelled, from 5,037 to 4,949.
Dubai Economy said that the recent Foreign Direct Investment Law contributed to attracting and encouraging foreign direct investment to Dubai’s economic sectors and targeted activities.
Dubai Economy added that it has opened new horizons for businesses in Dubai by restructuring economic activities, with 50 commercial activities and 35 light industrial activities converted into professional activities.
"This, in turn, allowed investors to acquire 100 per cent ownership, and motivated new investors to choose professional licenses and Dubai as a destination for investment in the region.
The introduction of the Instant Licence and the DED Trader licence were also part of the enhancements to attract new businesses," it added, according to Khaleej Times.
The preparations and countdown to Expo 2020 Dubai have also contributed to attracting a large number of hospitality companies, restaurants, hotels and supply companies to invest in the city, it said in a statement.
Companies in Dubai were more upbeat around future output predictions, with the level of sentiment improving to a four-month high.
Panelists in the survey often noted hopes of an improvement in economic conditions in 2020;
Overall, 324,773 business registration and licencing transactions were recorded in 2019, while the rental value of units leased to companies in Dubai amounted to AED26.2 billion, it added.
According to its report, new business licences last year created a total of 184,437 jobs.
"It allowed for an increase in the number of investors, which has led to more companies now setting up business in the emirate.
The FDI Law also provides the framework for attracting foreign investment in various strategic sectors to build a globally competitive economy based on knowledge and innovation," according to the statement.
source: ameinfo
Investors and buyers looking at Dubai's real estate landscape are spoilt for choice
The right place and the right time are the two most critical factors to consider before making a real estate investment. At some point in our lives, we all think of buying property. While some look for inspiring spaces where they can live fulfilling lives with their loved ones, others seek properties that add value to their investment portfolios.
Irrespective of the reason behind investing in real estate, the decision is based on the same two factors - the right place and the right time. When it comes to 'the right place', Dubai ticks all the right boxes. The Emirate's stable and growing economy, pro-people government, cultural diversity, and a future-proof outlook, are a significant draw for people from every corner of the world. Anyone who has ever been to Dubai or lives here aspires to own a piece of this magnificent city. For those wanting to invest in a property in Dubai, now may be the perfect time to do so.
As Dubai evolves into a city of the future, its real estate landscape is undergoing a transformational evolution. What was once just a go-to destination for global investors seeking good returns, is now maturing into a place where people are looking to settle in and invest for the long term. The days of unsustainable price growth are behind us, and Dubai has become a more affordable buyer's market, prompting many to invest.
On September 2, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, announced the launch of the Higher Committee for Real Estate, which will chalk out a long-term growth strategy for the sector. The announcement received a phenomenal response from the market, which witnessed a 134 per cent rise in real estate transactions within a month of the announcement. More and more people are seeing this as the right time to invest in Dubai's real estate. Here's why you should too.
The price is right
Property prices are perhaps the most influential factor while making a real estate investment decision. At this stage, Dubai's property market presents the right conditions for buyers, investors and renters alike. Compared to Q2 2019, in Q3 2019, the average price per square foot declined by 8 per cent for apartments and 6.6 per cent for villas across the board. However, the decline is softening, and we believe that the market is bottoming out. The declining prices have prompted many to take advantage of market conditions and make their first property investment in Dubai. In 2018, nearly 66 per cent of the total investors in Dubai's real estate were first time buyers; and we expect that this trend will continue in 2019. We are also witnessing a trend where long-term renters are instead considering buying their own home in the Emirate. Those who invest now are sure to benefit in terms of long-term returns once there is an uptick in the market in the coming years.
So many options
Today, investors and buyers looking at Dubai's real estate landscape are spoilt for choice. From off-plan projects to ready-to-move-in units, from gated communities to exquisite branded residences, the market offers unique products that suit different needs. It is also an excellent time for buyers who are looking for luxury real estate as Dubai is set to overtake New York as the global branded residences capital by the end of the year, with 23 existing projects and another 22 in the pipeline. At Damac, we have always believed that creating a diverse range of living experiences is the key to success in a market such as Dubai. From Ghalia, our first Shariah-compliant project, to Damac Hills, our master community that caters to residents' holistic lifestyle needs, our projects have been inspired by the different cultural needs and aspirations of buyers and investors.
Attractive returns
Dubai has always been a preferred destination for those who are looking at property as an investment. Despite the decline in prices, at 7 per cent, average rental returns of Dubai in the first half of 2019 remain stronger than in most big cities around the world. Besides long-term returns on investment, Dubai's real estate landscape offers multiple ways to make money from your investments. Compared to long-term rentals, holiday homes offer up to 25 per cent more returns to investors. As per a recent report by Knight Frank, the holiday home market of Dubai accounts for two per cent of its total households, which is the highest in proportion, compared to other big cities.
Better financing and easy payment plans
To encourage mortgage-based home purchases, the UAE Central Bank recently instructed banks and other finance providers to reduce early settlement fees to a maximum of 1 per cent or Dh10,000, whichever is less, for borrowers who want to exit their mortgage early. The UAE Central Bank also scrapped the 70-year age limit for the last mortgage repayment. These reforms will bring more flexibility for those who wish to buy a property through financing. Buying a home is a big decision that involves a complex emotional and logical reasoning. Whether you're an investor looking for returns or a buyer in search of your dream home, Dubai will never disappoint. However, it's all about taking the right decision at the right time.
source: zawya
Abu Dhabi aims to lure start-ups with investment in new technology hub
29 Mar 2019 Written by Admin AdminAbu Dhabi will commit up to 1 billion dirhams ($272 million) to support technology start-ups, it said on Sunday, in a dedicated hub as part of efforts to diversify its economy.
U.S. tech giant Microsoft will be a strategic partner, providing technology and cloud services to the businesses that join the hub as the capital of the United Arab Emirates continues its push to reduce reliance on oil revenue.
Abu Dhabi derives about 50 percent of its real gross domestic product and about 90 percent of central government revenue from the hydrocarbon sector, according to ratings agency S&P.
The emirate launched a 50 billion dirham ($13.6 billion) stimulus fund, Ghadan 21, in September last year to accelerate economic growth. Ghadan means tomorrow in Arabic.
The new initiative, named Hub 71, is linked to Ghadan will also involve the launch of a 500 million dirham fund to invest in start-ups, said Ibrahim Ajami, head of Mubadala Ventures, the technology arm of Mubadala Investment Co.
The goal is to have 100 companies over the next three to five years, Ajami said. “The market opportunities in this region are immense,” he added.
Mubadala, with assets of $225 billion and a big investor in tech companies, will act as the driver of the hub, located in the emirate’s financial district.
Softbank will be active in the hub and support the expansion of companies in which it has invested, Ajami said, adding that Mubadala is also aiming to attract Chinese and Indian companies, among others.
Mubadala which has committed $15 billion to the Softbank Vision Fund, plans to launch a $400 million fund to invest in leading European technology companies.
Incentives mapped out by the government include housing, office space and health insurance as part of the 1 billion dirham commitment, Ajami said.
Abu Dhabi will also announce a new research and development initiative on Monday linked to the Ghadan 21 plan, according to an invitation sent to journalists.
source: Reuters
Dubai is world’s top city for foreign investments in artificial intelligence, robotics
29 Mar 2019 Written by Admin AdminEmirate attracts over $21 billion in foreign capital in just three years
Dubai: Dubai is officially the world’s most popular destination for foreign companies looking to invest in smart technologies.
From 2015 to 2018, the emirate attracted a total of $21.6 billion in foreign direct investments for artificial intelligence and robotics, said to be the highest in the world.
Most of the investments came from the European Union and the United States (US), accounting for $5.7 billion and $3.9 billion, respectively.
The figures were released in connection with the Annual Investment Meeting (AIM) 2019, which will be held in Dubai from April 8 to 10. The event is the world’s leading platform for FDI, aimed at facilitating strategic networking and promoting investments.
The UAE is looking to increase capital inflows from foreign companies, to sustain the economy. In late 2018, a UAE decrees was issued to promote and develop the country’s investment environment and attract FDIs in line with national development policies.
According to the law published in the Official Gazette, a foreign direct investment unit is to be established in the Ministry of Economy. This will be “responsible for proposing foreign direct investment policies in the country and determining its priorities, and setting up associated plans and programmes, and work on their implementation following their approval by the UAE cabinet.”
Organisers of the upcoming annual investment meet said the latest data indicate that Dubai is fast emerging as the global destination for investment in smart technologies.
The AI industry’s economic contribution by 2030 is forecast to reach 33.5 per cent locally and 45 per cent globally.
“Digital growth is significant to the growth of the economy. In the UAE, it is in line with UAE Vision 2021, which aims to position the country as a top spot for tech investments,” said Dawood Al Shezawi, CEO of annual investment organizing committee.
“Disruptive technologies like AI, blockchain, internet of things (IoT) boost the productive capacity of countries and also the global GDP. To maximize its benefits, countries need to integrate new avenues that will drive more investments in these solutions,” added Al Shezawi.
Global players in the investment community, as well as high-ranking policy makers, leading academics and celebrated financial experts, are expected to attend at the upcoming annual investment meet.
Source: gulfnews
Source: gulfnews ublish LLC 2019. All rights reserved.
Given how uncertain and volatile the global economic and political landscape currently is, with market uncertainty pervasive and investor confidence deteriorating, global private equity firms are on the lookout for stable, new markets where they can be certain not just of promising returns on investment but also an investor-friendly regime.
As a result, the UAE, with its pro-business environment, excellent infrastructure, relatively diversified economy and political stability, is quickly emerging as a preferred investment destination, renowned international investors Laurence Fink and Henry Kravis said at a panel discussion hosted at the Majlis Mohamed bin Zayed.
The discussion, entitled Adnoc as a catalyst for foreign direct investment: a global investment perspective, was held at Abu Dhabi's Al Bateen Palace on Sunday and was attended by Sheikh Hamed bin Zayed Al Nahyan, Chief of the Abu Dhabi Crown Prince Court, as well as other dignitaries.
Fink and Kravis' remarks were extremely topical considering that just hours earlier, their respective firms, BlackRock and Kohlberg Kravis Roberts & Company (KKR), had signed a landmark pipeline infrastructure investment agreement with Abu Dhabi National Oil Company (Adnoc).
The agreement is set to unlock $4 billion in value from Abu Dhabi's crude oil pipelines and marks the first infrastructure partnership between leading global institutional investors and a national oil company in the Middle East. It is certain to pave the way for further significant foreign direct investment (FDI) into Abu Dhabi and the UAE.
Kravis, co-founder, co-chairman and co-CEO of KKR, kicked off the panel discussion by saying he was delighted to take part in this discussion of Adnoc's "capital modernisation" agenda and the "vision for economic transformation" of His Highness Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.
Kravis, who co-founded KKR in 1976 and is known as one of the pioneers of the private equity industry, said Sunday's landmark deal "sets an important precedent in the market that can demonstrate the potential for value-add foreign investment across UAE".
With approximately $200 billion in assets under its management, KKR invests capital across the world with the aim of being a partner in supporting economic development, growing companies and meeting the needs of its clients.
Fink, the founder, chairman and CEO of BlackRock, said it was "a privilege to be asked to be part of the Majlis", adding that "information exchanges such as this bring investors and countries together and create a closer community."
Fink is one of the most respected investors and business leaders in the world. He founded BlackRock in 1988 with seven partners, and under his leadership, the firm has grown into a global powerhouse in investment management. Today, BlackRock manages more money than any other investment firm in the world, with around $6 trillion in assets under management.
Kravis and Fink, whose firms are at the forefront of global infrastructure investing, went on to discuss global investment trends and opportunities for partnership in Abu Dhabi and the UAE and the importance of FDI in the country. FDI in the UAE has increased by 21 per cent between 2015 and 2017 to reach $10.4 billion. The United Kingdom, India and Saudi Arabia are the main investors in the country, with the bulk of the funds concentrated in the trade, real estate, energy, finance and insurance, manufacturing and construction sectors, the Majlis heard.
During the course of the discussion, Kravis and Fink covered key trends that affect the global and Middle East investment landscape. Drawing on their experience in investing across American, European, and Asian markets, the international investors discussed the potential for FDI and how their firms approach emerging foreign investment destinations like the UAE. The Majlis also heard why BlackRock and KKR decided to invest in UAE infrastructure assets, and why they feel it is becoming an increasingly attractive global investment destination.
Earlier in the day, Kravis and Fink joined Dr Sultan bin Ahmad Sultan Al Jaber, UAE Minister of State and Adnoc Group CEO, to sign a pioneering, multi-billion dollar investment partnership agreement between Adnoc, KKR and BlackRock. Under the terms of the innovative agreement, the investors will pay around $4 billion for a 23-year lease in the 18 pipelines that carry crude and condensate. Sovereignty of the infrastructure and the management of the pipeline operations will remain with Adnoc.
The partnership "paves the way for further significant foreign direct investment in the UAE", Dr Al Jaber said. "Adnoc has been undergoing a significant business transformation, underpinned by innovative partnerships and investments that are key to unlocking and maximising value across our full portfolio."
Following the wise guidance of the UAE leadership, Adnoc has been transforming into a more commercially-focused and performance-driven organisation and has hit significant milestones regularly over the last three years. Today's deal with BlackRock and KKR represents the next major step in the delivery of this smart growth strategy, demonstrating its expanded partnership model and more proactive management of its assets and capital. The Abu Dhabi government-owned oil giant received an AA long-term credit rating, the region's highest, from Fitch Ratings last week.
Source: khaleejtimes
The article provides a brief overview of the new FDI Law that offers an arrangement for the UAE Cabinet to allow foreign shareholders to own up to 100 per cent of companies in selected sectors.
To carry on business “onshore” in the UAE, a company established under the UAE Commercial Companies Law has to be at least 51% owned by a UAE or 100% by GCC national. For some foreign investors, particularly those unfamiliar with the region, this inability to have full legal ownership and control has been seen as a barrier to entry or limitation on their business in the UAE.
This article highlights some of the principal of the new Foreign Direct Investment Law No. 9 year 2018 (“FDI Law”) and the impact that it will have on the foreign investors.
As per Article 6 of the FDI Law, a new Foreign Direct Investment Committee (“Committee”) is to be set up. This Committee shall be in charge of the following:
• Issuing the Approved Activities List for foreign direct investors (“Positive list”)
• Making amendments to the Negative List for foreign direct investors
• Approving licensing applications
• Deciding the benefits for foreign direct investment projects
Positive list
The Committee will be responsible to prepare “positive list” to the UAE Cabinet which will set out the economic sectors in which greater levels of foreign ownership will be permitted (more than 49% of the share capital). When determining the positive list, the FDI Committee must take the following into account:
• integration with strategic plans of the UAE;
• achieving the best profit and added value to the UAE economy;
• raising innovation and providing job opportunities and training for UAE nationals;
• limiting negative effects on incumbent UAE companies that conduct a similar activity;
• the foreign investor’s level of competency, expertise and international renown;
• the best use of modern technology; and
• achieving a positive impact on the environment.
Negative list
Higher levels of foreign investment will not be permitted in any sector that appears in the “negative list” set out in the FDI Law. The sectors that are currently listed in the negative list pursuant to Article 7 of the FDI Law are as follows:
• Oil exploration and production;
• Investigation, security, military (including manufacturing of military weapons, explosives, uniforms, and equipment);
• Banking and financing activities;
• Insurance services;
• Pilgrimage and umrah services;
• Certain recruitment activities;
• Water and electricity services;
• Fisheries and related services;
• Postal, communications and other audio-visual services;
• Land and air transportation;
• Printing and publishing;
• Commercial agency;
• Medical retail trade such as private pharmacies; and
• Poison centres, blood banks and quarantine.
Sectors not appearing on the positive or negative lists
If a foreign company wishes to carry on a foreign direct investment project which does not appear in either the positive or negative list, it may apply for permission to have a higher level of foreign ownership than 49 per cent in that sector. The FDI Law sets out the process to be followed in the event of such application.
Obligations of the FDI Company
As per Article 13 of the FDI Law, the FDI company must:
• Comply with all local and federal laws in relation to environmental health, pollution management, and general public health;
• Practice only the commercial activities mentioned in its license;
• Comply with the Emiratization quota (details of which will be issued separately by the ministry of economy);
• Keep accurate accounting records;
• Appoint authorized auditor(s) for a one-year renewable period, up to a maximum of six years;
• Comply with the relevant authorities’ requirements regarding the FDI company’s projects which the authorities may request from time to time;
• Notify the relevant authorities when the FDI company’s projects commence within 5 days.
Although the FDI Law excludes the companies incorporated in free zones, it is worth mentioning that recently the economic departments in the UAE have released a list of activities that can be carried out onshore by companies established in free zones.
Source: Bonnard Lawson
This page throws light on the advantage of investing in the UAE which include: strategic location, state-of-the-art infrastructure, variety of business premises, political stability and more.
Advantages
The UAE has the advantage of:
- Strategic location
- State-of-the-art infrastructure
- Variety of business premises
- Political stability
- Social stability
- Ease of doing business
- Protection of intellectual property rights
- Favourable business regulations
- Open economy
- Economic stability
- No corporate tax.
Strategic location
The UAE is blessed with a strategic location between the east and west, which makes it accessible to major emerging economies, linking shipping routes and facilitating goods' transportation between the various regions in Middle East, Asia, Europe and Africa.
State-of-the-art infrastructure
The UAE provides advanced infrastructural facilities in all fields. In March 2016, Dubai announced to set up the world's biggest wholesale city , with an investment of AED 30 billion. The city, which will occupy an area of 550 million sq ft aims to help the UAE acquire a significant share of the global economic sector, estimated at USD 4.3 trillion. The city will be linked with Jebel Ali Port and Al Maktoum International Airport and will provide logistical support that will fully link with four continents.
Refer to the infrastructure section for more information.
Variety of business premises
The UAE offers endless choices of business premises and locations. According to your business activity, you are at liberty to choose a place appropriate for operation whether on the mainland or in a free zone.
You can set up your business in:
- plush business centres
- fancy shopping malls
- state-of-the-art commercial furnished buildings and towers
- industrial areas
- free zones specialised in a range of industries from logistics to media, power and information technology.
Political stability
The UAE is a model of political stability. Since its formation in 1971, the UAE has been a successful constitutional monarchy and continues to be so. This is because of the belief system of the UAE's Founding Fathers in peace and justice and the continued belief of the present political system and government in the same.
As per Al Bayan's report , the UAE has 102 diplomatic missions abroad which include 80 embassies, 18 consulates and 4 permanent missions. There are 199 foreign diplomatic missions in the UAE which include 110 embassies and 73 consulates.
The UAE is a member of Gulf Cooperation Council (GCC), Arab League and the UN and its agencies. According to the Global Peace Index 2016, the UAE is the third most peaceful country in the region.
Social stability
Despite the presence of a large foreign community in the country, the UAE is a safe place to work in and develop your capital with favourable living conditions and quality of life. The UAE Government emphasises on tolerance in the society. Moderation and acceptance of others are innate in the UAE culture.
With 110 crimes , the UAE had one of the lowest level of violent crimes in the world in 2015. The UAE ranked 9th among countries with lowest crime rates and 4th concerning assault offences in general. These rankings are better than many advanced countries around the world.
Ease of doing business
According to the Doing Business 2019 report, the UAE scored 11th rank globally and 1st rank regionally. The UAE scored impressive ranks in the following indices:
- Getting electricity - 1st rank
- Paying taxes - 2nd rank
- Dealing with construction permits- 5th rank
- Registering property – 7th rank
- Enforcing of contracts - 9th rank
- Protecting minority investors – 15th rank
Protection of intellectual property rights
It maintains protection of intellectual property rights, trademarks and it has enforced laws against piracy.
Favourable business regulations
The UAE signed major business international treaties to encourage business and foreign investments. It maintains tightened export control laws to prevent the movement of illicit goods as per Federal Law No. 13 of 2007 concerning Goods Subject to Import and Export Control.
Open economy
The UAE has its own regulations which prohibit monopoly and encourage competition. The UAE encourages private sector growth and maintains liberal policies in terms of foreign exchange controls, visa policies and import regulations. The UAE has strong ties with key trade associations to strengthen its position as an open economy and player in the international trade and competition.
The UAE:
- is a member of the World Trade Organization ( WTO) since 1996
- is a party to the General Agreement on Tariffs and Trade ( GATT) since 1994
- is a member of the Greater Arab Free-Trade Area ( GAFTA) in which all GCC countries participate
- concluded Free Trade Agreements with Singapore and the EFTA bloc in 2008 and 2009
- is cooperating with the GCC countries to conclude the Free Trade Agreements with the EU, Japan, China, India, Pakistan, Turkey, Australia, Korea and the Mercosur bloc comprising Brazil, Argentina, Uruguay and Paraguay.
Source: UAE Government Website
