Ownership law nears completion

Sheikha Lubna addresses the UAE-Uzbekistan business forum in Tashkent yesterday (WAM)

The UAE has nearly completed the drafting of a new law that allows foreign investors to have full project ownership in a drive to attract capital and diversify the oil-reliant economy.

Sheikha Lubna Al Qasimi said such a drive has already turned the UAE into a top destination for foreign direct investment (FDI) in the

Middle East, receiving a record $19 billion (Dh69.7bn) in 2006.

"Despite this high inflow, the UAE has stepped up its efforts over the past few years to further improve the investment climate to cater to the needs and expectations of both local and foreign investors," she said, quoted by the Emirates News Agency (Wam).

"The UAE is keen on taking all necessary measures, which will guarantee sustainable growth in its economy by attracting foreign capital… for this purpose, the country is drafting a new FDI law, which is now in its final stage… another law on competitiveness, inspired by Unctad (United Nations Conference on Trade and Development) laws, is also in the final phase."

Sheikha Lubna was speaking at the UAE-Uzbekistan business forum, which opened in Tashkent yesterday to discuss co-operation between the private sectors in the two countries in trade and joint projects.

The minister gave no details of the new law but officials have recently spoken of improved regulations that will ensure full ownership of projects for foreign investors in many sectors at industrial zones and other areas.

The drafting of the new law coincides with an intensified drive by the UAE to lure in foreign businessmen as it pushes ahead with a liberalisation drive in various sectors after joining the World Trade Organisation a few years ago.

"Besides the country's strong economy, there are many other elements that make the UAE an attractive investment destination," Sheikha Lubna said.

"They include its free economy policy, its stability and security, and its balanced relations with all other countries… at the same time, the UAE offers excellent tax incentives as there is a full exemption of income and profit taxes."

Sheikha Lubna's comments were made during her keynote address to the UAE-Uzbekistan business forum, which started in the capital Tashkent yesterday.

The event is being held on the sidelines of the first meeting of UAE-Uzbekistan joint ministerial committee.

Her figures showed the UAE's nominal gross domestic product jumped by 16.5 per cent to nearly Dh698 billion in 2007 to maintain its position as the second-largest Arab economy after Saudi Arabia.

But the minister stressed that such high growth was not only a result of strong oil prices but expansion of other sectors. "Contrary to the general belief that the UAE economy is dominated by oil, the non-oil sector accounted for nearly 65 per cent of the GDP last year… these indications prove the strength of the UAE economy, and its sound policies and development strategy."

According to Unctad, the UAE has had the highest growth in investments in the Middle East over the past few years because of its policy to open up most sectors.