Abu Dhabi signals support for 100% foreign ownership

One hundred percent foreign ownership of businesses in the UAE moved another step closer on Monday after officials in charge of economic development in Abu Dhabi revealed they were in support of the move.

Chairman of Abu Dhabi’s Department of Economic Development said he was “strongly inclined” to grant 100 percent ownership to expatriate businessmen and women, on the basis of projects, not land.

Nasser Ahmed Al Suwaidi’s comments come just a week after a top official at Dubai’s Department of Economic Development (DED) said it was promoting more liberal business ownership rules at federal government level.

All seven emirates are currently considering the plan that would see an end to the current system where local sponsors must own a 51 percent stake in foreign firms - outside the Emirates' 30 free zones.

However, as yet no final decision had been made, according to Al Suwaidi.

"Important amendments are under way and they are positive ones that will create a qualitative leap for the country's economy as a whole," he told UAE daily Emirates Business.

"We feel strongly inclined to grant 100 percent ownership to foreigners in new and old industries as well as other projects. The percentage might be less in other sectors according to the emirate's needs. Ownership covers projects and not land," he added.

One week ago Khalid Al Kassim, deputy director general of DED said: "We are trying to push 100 percent ownership for the whole country, but Dubai alone cannot do it alone.”

It was in the UAE’s best interests to ease restrictions on foreign ownership as part of a strategy to boost foreign investment in the wake of the global crisis, he added.

Last year foreigners set up 342 projects in Dubai, up 59 percent from 2007.

Foreign direct investment soared by 123 percent to $21bn in the emirate, according to a study released last month by the Financial Times FDI Intelligence.

The Emirates’ governments are continuing to invest in infrastructure projects that should be seen as a signal to foreign investors that the country was stable, with adequate liquidity, added Al Suwaidi.

"We continue to push them [the projects] forward and have never thought of slowing down the work.

"Abu Dhabi set this year's budget on the basis of an oil price of $50 per barrel but even if the price went below $50, we'll not halt the projects we are building, especially Khalifa Port where work on the infrastructure has already started," he said.

A survey on foreign investment is due to be released by the Abu Dhabi Department of Economic Development and the Ministry of Economy – but no time frame has been given.

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