The move represents a major change in ownership laws – but the minister declined to say which sectors would be affected.
“The legislation will be ready within six months,” he said. “We will allow foreign ownership wherever it helps the economy of the UAE.”
Currently foreign investors are allowed to own a maximum of 49 per cent of a UAE company, with the balance owned by Emiratis. In certain areas of the financial sector, such as insurance, the limit on foreign ownership is as low as 25 per cent.
Former economy minister Sheikha Lubna Al Qasimi indicated last June the new laws would allow majority foreign ownership in some areas of the financial services sector.
Full foreign ownership is at present largely restricted to free zones such as Dubai Media City (DMC), Dubai Internet City (DIC) and the Jebel Ali Free Zone. There are, however, a number of other exceptions to the 51 per cent rule:
- Activities open to 100 per cent GCC ownership.
Wholly owned GCC companies entering into partnership with UAE nationals.
- Foreign companies registering branches or representative offices in the UAE.
The move to allow greater foreign investment in UAE companies is in line with recommendations made by the World Trade Organisation.
Jordanian businessman Mubarak Hend, who plans to invest in Dubai, said: “Changes in ownership laws will surely lead to more funds flowing into the country and an additional boost to the economy.”
The UAE aims to significantly increase the amount of foreign investment in the country as it continues to expand its economy and develop its infrastructure.
The country has experienced substantial growth in foreign investment over the last few years but the restrictions on full foreign ownership have been cited as a factor holding back greater investment.
Foreign direct investment in the UAE rose 10.8 per cent to Dh68.63 billion in 2006, according to a recent Ministry of Economy report.
New ownership rule in six months