Following the enactment of the UAE Foreign Direct Investment Law last year (Law 19 of 2018 – the FDI Law), there has been considerable commentary on the prospects for foreign direct investment (FDI) in the country. With US$ 30.4 billion of FDI in the UAE over the past 3 years, and with the UAE already moving rapidly up the global rankings for attracting FDI, what are the key factors multinationals looking to invest in the UAE need to consider?
Campbell Steedman, Winston & Strawn Managing Partner for the Middle East, believes that local sponsorship rules play a key role, “Historically, the requirement for a local sponsor and limit of 49% on the shareholding in an onshore investment has surprised some investors who are not familiar with emerging markets’ investments (where sponsorship or limitations on majority interests are more common than in more developed markets), but for foreign investors who are familiar with the UAE there are few surprises connected with undertaking business in the region.”
The new legislation provides the framework for the UAE Cabinet to permit foreign shareholders to own increased levels of foreign ownership (more than 49% of shares) in companies operating in certain sectors. This is an extremely positive move for the UAE, and will undoubtedly see further investment flows into the region.
Read more about Campbell’s insights into FDI in the UAE in the August 2019 edition of Emirates Law, Business & Practice Magazine here.