The relevant committee will publish the positive list or targeted sectors for the new UAE foreign direct investment (FDI) law by the first quarter of 2019, according to UAE Economy Minister Sultan bin Saeed al-Mansoori.
The law, Federal Decree No. 19 of 2018, allows up to 100 per cent foreign ownership of projects under the positive list. MEED understands it will be kept flexible to accommodate future FDI projects recommended by the Foreign Direct Investment Committee but are not included on the initial list.
It is understood the positive list will prioritise certain sectors including innovation, technology, space, renewable energy and artificial intelligence with a view to supporting the UAE government’s Vision 2021.
The law applies to “all foreign direct investment projects established or licensed in the UAE”, but will not apply to projects established in the financial and non-financial free zones of the country.
In addition, Al-Mansoori says projects in the oil and gas sector will be kept in the negative list.
The law also grants the right for existing foreign direct investment projects to “retain all the privileges prescribed for them before the provisions of the Legislative Law are in force, in addition to the right to benefit from the privileges prescribed for them, in condition to adjust their situation according to the conditions and requirements specified in the law.”
This means existing foreign direct investment projects can be converted into 100 per cent foreign-owned projects.
Some of the advantages offered by the new law are:
- Foreign licensed investment companies will be treated as national companies subject to limits permitted by international legislation and conventions
- Possibility of making remittances derived from the project or annual profits or proceeds of liquidation or sale or funds obtained from disputes, related to the project salaries and compensation and entitlement of employees of these companies outside the UAE
- Right to introduce new partners to the company and transfer its ownership to a new investor
In return, FDI firms are expected to commit to Emiratisation, or employing and training a specified ratio of locals; provide statistical information, data and documents about the project to the FDI Committee; and comply with prescribed laws, licensed activity and auditing procedures.