UAE liberalises company ownership

● A landmark law that will allow foreign investors to own 100% of companies in the United Arab Emirates will be limited to industries deemed essential to the secondbiggest Arab economy.

Authorities were weighing what industries were to be included in the law, and the decision would be based on factors such as the ability to create jobs and transfer technology, said Abdulla Al Saleh, undersecretary for foreign trade and industry at the economy ministry.

At present, foreigners can fully own a company if it is in a free zone. The changes, which include offering some foreigners long-term residency permits, would take ef- fect by year-end, the government said.

The announcement is an attempt by the UAE to bolster a slowing economy and stay ahead of other Gulf neighbours racing to emulate Dubai’s success in finding sources of revenue beyond oil.

Stocks in Abu Dhabi and Dubai, the UAE’s richest emirates, gained after the announcement, helped by bets the changeswould end a model that forced foreign investors to seek local partners to set up businesses outside free zones.

Al Saleh’s comments, however, suggest the law may be more limited than investors and analysts had thought.

The law aimed to “give investment in the UAE a strong push”, Al Saleh said. “Its goal is to attract quality investments and expertise and isn’t necessarily about the size or number of investments.”

The UAE and other Gulf Arab monarchies have long resisted giving foreigners, who make up the majority of the population in the region, too much clout in the economy, forcing companies to find local partners who must hold a 51% stake.

Other countries in the six-nation Gulf Cooperation Council are also making changes. Saudi Arabia is allowing foreigners to own up to 100% of businesses in certain industries. Qatar plans to give some foreigners the right to remain indefinitely.