New investment law in the UAE to further boost FDI
The UAE’s transformative investment law is here, Sultan bin Saeed Al Mansouri, UAE Minister of Economy announced earlier this week. The groundbreaking law will allow up to 100% ownership to foreign investors in some specific onshore business sectors and will ultimately aim at lowering the UAE’s financial reliance on oil revenue.
The investment law, which has been long-anticipated by the business community of the UAE, is set to be introduced in the first quarter of 2018 as its final draft is awaiting the UAE Federal National Council’s approval. The news was particularly welcomed by the business community as well as by European investors who expect to see the UAE bouncing back from the VAT introduction.
Widely expected to transform the investment landscape of the UAE and boost FDI inflows, this is a major legislative step from the UAE. Specifically, the Economy Minister, Sultan Al Mansoori, told The National, a UAE English newspaper, that he expects FDI to hit $10.6bn to $10.8bn in 2018, a realistic target based on the current economic challenges on an international level.
This statement only confirms UAE’s vision of becoming an established FDI destination, with Dubai market maturing and presenting viable investment opportunities with high ROI.
The new investment law will also liberalise sectors ranging from the manufacturing industry, including pharmaceuticals with the long-term goal to gradually move away from oil-specific businesses. The looser fiscal policy introduced by the new law will also increase GDP growth in the UAE. Economy experts foresee a 2.7% GDP growth in 2018 and 3.2% growth in 2019.
According to the experts, the newest investment law, along with the introduction of the bankruptcy law in 2016, includes a string of bold reform initiatives that will create an optimum landscape to attract even more FDI in the UAE. Government officials anticipate FDI to increase by 15%, attracting investors from Asia and Europe.
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