ANNOUNCEMENT 23 Sep 2018
On 23 September 2018, the President of the United Arab Emirates (UAE) issued Decree No.19 on Foreign Direct Investment (FDI) Law, which provides a framework for foreign investors to own either 100% or up to 100% of companies in the UAE in certain designated sectors.
NUMBER OF INTERVENTIONS
Federal Decree No. (19) for the year 2018 on Foreign Direct Investment. Arabic. Available at https://www.adjd.gov.ae/sites/Authoring/AR/ELibrary%20Books/E-Library/PDFs/Law%20-%20investment%20-%20foreign.pdf
On 23 September 2018, the President of the United Arab Emirates (UAE) issued Decree No.19 on Foreign Direct Investment, which provides a framework for foreign investors to own either 100% or up to 100% of companies in the UAE in certain designated sectors.
Article (6.2) of the law sets the legal basis for the foundation of a foreign direct investment committee (the FDI Committee) that is tasked with the following:
Article (6.3) of the Law sets the criteria which the FDI Committee should follow to add activities to this positive list. They are as follows:
Articles (7.4) authorizes the Cabinet to issue the decree with the positive list upon the approval of the affiliated minister and the committee and Article (7.5) sets some examples of requirements that the cabinet could impose on companies to take advantage of any proposed increase in the levels of foreign ownership:
Article (10) of the FDI Law summarises the conditions and procedures to be followed in order to apply for an increased level of foreign ownership in a sector on the positive list.
Article (7.2) of the law introduces a non-exclusive negative list of sectors within which high levels of foreign investment will not be permitted. These sectors are:
Context of this new law:
This law comes one year after the amendment of the UAE Commercial Companies Law that used to restrict foreign ownership to 51% or more of the shares in a company established in UAE. The amended version of this Commercial law has set the stage for the new FDI Law and now allows the UAE Cabinet the flexibility to permit increased levels of foreign ownership in certain companies and sectors of the economy.