Foreigners may soon be allowed to own 100 percent of their business in the United Arab Emirates if a proposed law is finalized, local media reported Monday.
“The law to allow 100 percent foreign investment is ready, but still under study and should be finalized within the next two months. We are especially looking into certain sectors such as hi-tech and hi-value,” Minister of Economy Sultan Bin Saeed al-Mansouri told the quasi-governmental Gulfnews.
Currently foreign companies can only own 49 percent of a business and must have an Emirati partner unless they are located in a free zone.
The change is designed to attract foreign businesses to a country hard-hit by the world financial crisis that has seen property prices plummet and an exodus of expatriate workers.
“It sends a very strong signal to foreign investors that the country is open,” Wasseem Mina, assistant professor of economics at United Arab Emirates University, told Al Arabiya. “Hopefully this is likely to encourage foreign investors to come over here.”
The restrictions on foreign ownership and its impact on competition were one of the issues of concern in the World Trade Organization’s trade policy review, he added. The new law could change many things in the economy by improving efficiency and competition among businesses.
“A lot of industries worldwide are very interested to move here to the UAE, providing there are certain terms and conditions they would like to see in the industrial law,” the Abu-Dhabi-based daily the National quoted Mansouri as saying.
Last year Mansouri said such a law would be passed within the next six months.