The New UAE Foreign Direct Investment Law – A Distinct Advantage 2020

In September 2017, the Government of the UAE revised the UAE Commercial Companies Law to permit the UAE Cabinet of Ministers the adaptability to allow expanded degrees of foreign ownership by Foreign Investors in specific companies and segments of the economy. The UAE Foreign Direct Investment Law (the FDI Law) presented a system under which foreign investors may apply to possess over 49% of the shares in the capital of mainland companies incorporated in the UAE.

New UAE Foreign Direct Investment Law: Update on Positive List

The positive list accommodated in the UAE Foreign Direct Investment Law has now been given by the UAE Cabinet and has become effective. This is a noteworthy improvement for foreign investors that are keen on putting investments into, or as of now put investments into, companies in the UAE. The UAE Foreign Direct Investment Law accommodates a “positive list” of exercises in which up to 100% foreign possession by Foreign Investors might be allowed, subject to specific models being fulfilled. The UAE Foreign Direct Investment Law (FDI Law) expressed that the UAE Cabinet had the tact to issue and revise the “positive list” by method for goals. Reports rose in mid-2019 that the UAE Cabinet had affirmed the “positive list” however, that list was not officially embraced or distributed in the UAE Official Gazette. On 17 March 2020, the UAE Cabinet gave a Cabinet Resolution setting out the ‘Positive List of Economic Sectors and Activities in which Foreign Direct Investment is Permitted’ (the Positive List Resolution). The Positive List Resolution is communicated to get compelling from the day on which it is distributed in the Official Gazette. The Positive List Resolution has been distributed in the Official Gazette dated 31 March 2020 so is presently in actuality. 122 economic activities are determined in the “positive list” that is appended to the Positive List Resolution. Some of the sectors in the “positive list” are agriculture, manufacturing, transport and storage, hospitality and food services, information and communications, science and technology, healthcare, education, art and entertainment, and construction. The Positive List Resolution additionally gives, dependent upon the situation, least offer capital prerequisites which should be met for companies that are or get possessed 100% by Foreign Investors and are authorized to carry on exercises contained in the “positive list”, and forces different necessities that should be fulfilled by Foreign Investors corresponding to specific exercises. It will also require the competent licensing authority permits and gives that Emiratisation necessities might be forced by the UAE Ministry of Human Resources and Emiratisation on organizations that are claimed 100% by Foreign Investors. Contact us for more information.