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The UAE announces the list of economic activities eligible for up to 100% foreign ownership

  • UAE
  • Jordan

    07-07-2019

    Last week the UAE Cabinet approved the list (“positive list”) of economic activities that will be eligible for up to 100% ownership by foreign investors in the country. The approval comes to supplement the UAE Federal Law No. 19 of 2018 on Foreign Direct Investment Law (“FDI Law”) which was enacted in November last year. The FDI Law specified those economic activities that are not open to foreign direct investment, but gave the UAE Cabinet the authority to publish the ‘positive list’.

    On 3 July 2019, the positive list was made public. It includes 122 economic activities (and categories of activities) spread over a range of sectors including, among others, manufacturing in various industries, food services, construction, renewable energy, hospitality, architecture and other engineering services, storage and transportation, art and entertainment, information technology, space, administrative and support services and scientific research and development. Whilst the introduction of the positive list is a significant change in policy in the UAE, the maximum percentage of foreign ownership that will be allowed in the eligible sectors will be determined by the licensing authorities at an emirate level (and not at the federal level).

    The positive list sets out the minimum capital requirements as well as other conditions that must be satisfied by foreign investors in order to benefit from the FDI Law and the Cabinet’s decision. These conditions include participating in the Tawteen (Emiratisation) Partners Club of the Ministry of Human Resources and Emiratisation, using modern technology in the production processes and contributing to the research and development in the country. Foreign investors will also have to satisfy other requirements of the licensing authorities in the relevant emirate who, according to the FDI Law, will specify the requirements and procedures for licensing the economic activities that fall under the positive list.

    The release of the positive list is a step forward towards the actual implementation of the long-awaited FDI Law. However, it is yet to be confirmed when applications for foreign investment activities may actually be accepted by the licensing authorities. The approval process for foreign investment applications has not been made public at the time of this announcement.

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