New law to create more opportunities

dubai — A new law allowing 100 per cent foreign ownership of companies in the UAE will only apply to some sectors of the economy, limiting the risk that it could disrupt existing business, Dubai investment officials told Reuters.

The UAE cabinet, chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said in May that it would permit 100 per cent foreign ownership of some UAE-based businesses, up from the current 49 per cent limit, by the end of 2018.

Few details of the law have been revealed so far. But Raed Safadi, chief economic advisor at Dubai’s Department of Economic Development, said on Monday that it would only apply to “strategic sectors” of the economy. This means it will not damage the interests of UAE citizens who currently benefit from acting as silent partners in foreigninvested businesses, Safadi said.

In fact, the new law will create opportunities for UAE citizens because “they have a lot to offer in terms of knowledge of local markets, the networks and the connectivity,” he added.

“We are not targeting the sleeping partners’ businesses, because these are small businesses. We are targeting strategic, impactful businesses which will leave their fingerprints on the economy and create a meaningful impact on jobs, technology, and boost imports and exports,” said Fahad Al Gergawi, chief executive of the Dubai Investment Development Agency.

Special business areas in Dubai known as “free zones”, which already permit 100 per cent foreign ownership, could also be affected by the new law, because they will lose one of their unique advantages.