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Tue 10 Mar 2020 10:06 AM

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Video explainer: UAE Cabinet approves 100% foreign ownership in 122 economic activities

While COVID-19 or the new Coronavirus dominates headlines, with business packing and stock markets plunging across the globe, the UAE has some good news for investors in the industrial, agricultural, and services sectors.

His Highness Sheikh Mohammed bin Rashid Al Maktoum approved the positive list of economic sectors eligible for 100 percent foreign ownership. Yes – that’s the good news.

The decision provides investors with an opportunity to acquire various shares in a number of economic activities including the production of solar panels, power transformers, green technology, and hybrid power plants.

Just to refresh your memory, the UAE cabinet last year had approved 122 economic activities across 13 sectors that will be eligible for up to 100% foreign ownership. The new rule came about to lift a federal requirement that has long capped foreign ownership in local companies at 49%. The change frees the seven emirates to open up their industries to foreign investors, many of whom demand full control over their operations.

For activities in manufacturing a guideline minimum share capital requirement of between AED 3million and 100milion has been given. Hospital and Hypermarkets guidance has been given at AED 100milion share capital requirement. Other sectors such as construction, engineering, transport, education, medical and dental clinics guidance has been given that share capital should be in line with applicable local laws.

Currently, the UAE holds 40 percent of Foreign Direct Investment, FDI, in the region with US$140 billion.

As per the new announcement, in the industrial sector, 51 activities will be included such as manufacturing food and drinks products and aircraft repair.

In the services sector, 52 activities will allow full foreign ownership including scientific research and development while the agricultural sector will include 19 activities such as the cultivation of grains.

Speaking of foreign investments, the UAE’s space sectors seems to havea  lot of scope.

The UAE Space Agency has announced details of the new Space Law, which will be the first of its kind in the Arab world, aimed to create a legislative and regulatory environment for the national space sector.

The new law aims to protect the UAE's interests by establishing a balance between economic and commercial requirements, encourage innovation, security, safety, and environment protection, as well as drive investment.

The global space industry is currently worth more than $400 billion.

The UAE space industry’s investments have exceeded AED22 billion and has provided 1,500 jobs while the commercial space sector in the UAE includes the seventh largest satellite operator in the world in terms of revenue, Al Yah Satellite Communications Company.

(Source: Arabian Business YouTube channel)