Everyone knows that the United Arab Emirates is a state that welcomes investments in any volumes and forms.
Currently, the UAE is expected to adopt a new law on investment, which will allow foreign investors in certain business sectors to own 100% of the capital. In local companies, the maximum share of the foreign investor will remain unchanged – 49%, whereas in the free zone companies the share size can reach 100%.
This law is aimed at supporting direct investment, and it is eagerly awaited by representatives of the business community and analysts.
The law will be aimed at changing the investment landscape and climate of the UAE, and will also create significant opportunities for economic growth by attracting foreign direct investment. The non-primary sectors of the UAE economy will be most affected in this regard.
UAE Minister of Economy, Sultan Bin Said Al Mansuri, said that the final draft of this important law is awaiting approval by the Federal National Council of the UAE before it becomes law in the last quarter of 2018.
According to experts, the new law on investments, which should be made public by the end of the year, should further increase the inflow of direct investment, provide some flexibility of fiscal policy. In particular, with the adoption of the law, the expectations of large investments in the infrastructure of society, increase in growth and volumes in the sectors of the non-volatile economy are linked.
After the entry into force of this law, analysts expect an annual increase in direct investment flows to 15-20%. It should be noted that the UAE has traditionally occupied one of the leading places in the region in attracting investment funds. Only in 2017 there was an inflow of direct investments amounting to about 11 billion US dollars, which is 22% of total direct investment in the region of the Middle East and North Africa. Such investment attractiveness is provided due to a very friendly business environment, well-developed infrastructure, diversified economy and, importantly, political stability in the UAE.
Adoption of the new law on investments will act as an additional favorable factor that will have an impact on increasing the investment attractiveness in the country.
In addition, in recent years, the UAE has been actively working on several other important reform initiatives, including the development of a new law on bankruptcy. The law on bankruptcy of the UAE, which allows to restructure companies in the financial crisis, has already entered into force.
According to most experts, the new law on investments, the law on commercial companies of 2015 and the bankruptcy law of 2016 are the result of complex legislative work, a significant step towards supporting and expanding the UAE as an international center for investment activity.