The United Arab Emirates is at an advanced stage of drafting a foreign investment law that would allow 100 per cent foreign ownership of businesses in some sectors, the economy minister said on Monday.
Sultan bin Saeed al-Mansouri, speaking at an international investment conference in Dubai, did not specify the sectors or say when the law might be passed. The process of drafting and enacting major laws in the UAE often takes years.
But the initiative may mark a more aggressive push by the Arab world’s second biggest economy to attract investment. At present, foreigners generally cannot own more than 49 per cent of any UAE firm unless it is incorporated in a special “free zone”.
A new companies law, anticipated to take effect within months, was originally expected to relax this restriction, but that reform was dropped because of strong opposition from some Emiratis who feared they could lose out to foreigners.
Mansouri said on Monday, however, that the UAE was determined to diversify its economy beyond oil and saw foreign investment as a key way to do this.
“Economies face pressures from changes in the international environment, including the drop of the oil price,” he said.
While Mansouri did not say how the new foreign investment law would work, it may require fully foreign-owned firms to transfer technology in sectors that are strategically important for the UAE. Officials have previously said they are keen to attract technology for industries such as aerospace.
New foreign direct investment (FDI) in the UAE rose 25 per cent to $13 billion in 2014, Mansouri said, adding that the government aimed to raise FDI to five per cent of gross domestic product in coming years. GDP was Dhs1.540 trillion ($420 billion) last year, he said.