UAE foreign businesses now free to own their enterprises outside of zones
The long awaited 100% foreign business ownership in the UAE is finally out of the free zone and the UAE is one step closer to a booming economy.
After months of speculations and experts predicting disapproval, the UAE cabinet approved the 100% foreign ownership, in addition to adopting a new 10-year visa system aimed at attracting international investors and high-skilled professional workers, WAM, the official news agency, announced on May 20.
Where will this new law take the UAE?
The 10-year visa
The new visa system will increase the chances of attracting investors and competencies to the UAE and thus increase the country’s economic competitiveness globally, according to WAM.
The system will grant investors and talents up to 10-year residency visas for specialists in medical, scientific, research and technical fields, as well as for all scientists and innovators, as well as five-year residency visas for students studying in the UAE, and 10-year visas for exceptional students.
WAM reported Sheikh Mohammed, Ruler of Dubai and UAE Prime Minister, as saying: “The UAE will remain a global incubator for exceptional talents and a permanent destination for international investors.”
“Our open environment, tolerant values, infrastructure and flexible legislation are the best plan to attract global investment and exceptional talents in the UAE.”
The UAE’s Ministry of Economy will coordinate the implementation of the new rules and follow up on its developments with a report due to be submitted to cabinet in Q3 this year.
Stocks Set to Win
Stocks in the UAE, especially the real estate sector, could get a boost from government plans to allow full foreign ownership in companies as it seeks to attract investments, Bloomberg reported.
Allowing non-Emiratis to own 100% of businesses and granting long-term visas to some investors could support property companies, analysts, strategists, and investors said.
The decision could trigger a huge come back in the UAE’s stock market, according to Bloomberg, after experiencing a serious hit earlier this month.
Analysts, strategists, and investors
Nakheel’s chairman, Ali Rashid Lootah released a statement in which he welcomed the changes and was sure that this move will undoubtedly have a positive effect on the UAE’s economy, the real estate sector in particular.
Bloomberg reported Mena Corp.’s Tariq Qaqish explaining that 100% foreign ownership is vital for long-term economic growth and boosting UAE’s GDP.
Bloomberg also reported Monica Malik, chief economist at Abu Dhabi Commercial bank, saying that this move will have a positive impact on the economy, raising investment. levels, population inflows, development of new sectors “especially on the technology front,” and reducing remittances out of the country.
Ehsan Khoman, from Mitsubishi UFJ Financial Group, said: “This eagerly awaited amendment to foreign ownership laws will not only change the investment landscape of the UAE but also create significant growth prospects by attracting more FDI flows, primarily into the non-oil sectors of the economy.”