UAE looks to allow 100% foreign ownership

FOREIGN OWNED: The UAE may look to relax foreign ownership laws in order to lure more investment to the emirates, according to one minster. (Getty image)

The UAE may relax foreign investment laws to allow 100% international ownership of projects, particularly in the industrial sector, a government minister said on Wednesday.

The UAE Minister of Economy Sultan bin Saeed Al Mansouri said there was nothing to be feared from foreign investment, UAE daily Emirates Business 24/7 reported on Thursday.

Speaking at a meeting at the Abu Dhabi Higher Corporation for Specialised Economic Zones (ZonesCorp), Al Mansouri said successful international investment would work to protect nationals.

“As long as this investment [by foreign investors] is useful for the country, why should foreigners not own these projects, especially if these business projects involve a huge amounts of capital, and big companies and countries compete for them,” the newspaper quoted him as saying.

Al Mansouri acknowledged the issue was “sensitive”, but the protection of nationals would be guaranteed.
The Ministry of Economy would promote discussion on the issue, the newspaper said.

Hussein Jassim Al Nuwais, chairman of the Zonescorp executive committee, said the ownership law was signifacnt for the attraction of foreign investors to Abu Dhabi.

“We have a lot of raw materials, especially in the petrochemical sector, which we export to China and Japan. Then we buy them back after manufacturing at a huge cost. If we set up industries for these materials in Abu Dhabi, we would make huge profits,” Al Nuwais said, quoted the newspaper.

“We offered big international firms huge industrial projects and they liked them. We discussed the required procedures, then the investors asked for full ownership, and the projects stopped, despite being highly important.”

Al Nuwais identified three areas that require huge investment and would potentially benefit from foreign ownership - petrochemicals, aluminum and iron. All three industries, he said, require a large amount of capital and expertise to run effectively.

Foreign investment in the emirate is already a major force driving economic growth.

In February, ZonesCorp said the current allowance of 49% foreign ownership will be considerably increased in sectors that are most in need of foreign investments.

The legislation would be part of the government's efforts to encourage investment in the emirate as it looks to spend $200 billion transforming the capital into an ultra-modern city over the next 12 years, under its Abu Dhabi Plan 2030 development strategy.

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USER COMMENTS (2 COMMENTS)

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100% ownership by expats
Posted by PMS, dubai, UAE on 20 April 2008 at 13:56 UAE time

There is no logic to expats being restricted to 49% ownership of their businesses particularly as in the large majority of businesses the mandatory "local" partner neither invests his time nor money in the project.

It is a major disincentive to further invest in a business which can be claimed buy the local partner without any rhyme or reason. It is for this reason that most expats send their money home - for security.

Except for sectors that the government sees as "critical" 100% ownership should be extended to all businesses, or like in the Free Zones , the govt. or the economic department should partner the expats so they feel secure that their years of hard work will not be taken away from them.

UAE looks to allow 100% foreign ownership
Posted by Firozali A. Mulla MBA PhD, DUBAI, UAE on 14 April 2008 at 06:39 UAE time


UAE looks to allow 100% foreign ownership
Amy Glass on Thursday, 10 April 2008
The economy has always been kind to those who allow the distributions of wealth. In fact the wheels of economy is to turn round if it has to make more wealth. Think of the small example of the teacher who teaches the son and is paid nothing. When he teaches the outsiders, he earns and let the cash flow around without let or hindrances. This is true growth.
I thank you
Firozali Mulla MBA PhD.

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