The Cabinet of the United Arab Emirates (UAE) has now decided to give 100% Foreign Ownership for 122 economic activities in 13 sectors. The 13 sectors play a key role in the UAE economy. The decision is aimed at boosting growth and investment of the economy. The UAE last year approved a Foreign Investment Law that would allow foreigners to own more than 49% of the Foreign Ownership Law announced in November 2018. It is among a series of economic reforms of far-reaching impact initiated by the UAE in the recent past to give a much-needed push to the Foreign Direct Investments.
Initially, 100% Foreign Ownership of business was possible only in the designated business park known as free zones. It indicates a measure to liberalize and strengthen the investment environment and will be a critical step in the development of new sectors and industry.
The 13 Sectors for 100% Foreign Ownership in the UAE are:
Renewable energy has become economically attractive in the oil-rich United Arab Emirates (UAE). Ramping up renewables to 10% of the country’s total energy mix, and 25% of total power generation, could generate annual savings of USD 1.9 billion by 2030. It will be a support for those who are doing investment in the renewable energy sector. As well as the UAE is going to implement the world’s largest solar project in Abu Dhabi, UAE.
The UAE Space Agency has also recently joined the International Space Education Board, which has a goal of increasing literacy in space and related science, technology, engineering and mathematics fields, as well as supporting the development of advanced skills that will be required by future space programs.
The agriculture in the UAE wasn’t always at the level it is today. The reasons behind the low penetration were a scarcity of water resources and arable land, soil salinity, difficult environmental conditions, high production costs, agricultural pests, and post-harvest losses. From 1971, when the first efforts were made towards the development and upgrade of the agricultural economy until 2011, the number of farms grew from 4,000 to 35,704, occupying an area over 100,000 hectares. Then the organic production area in the UAE increased to about 4,000 hectares by the end of 2013. Now, this is one of the important sectors which UAE government is focusing.
In an increasingly globalized business climate, worldwide expansion of trade and manufacturing has become imperative. The UAE is no exception to this rule and has already recognized the benefits of boosting its manufacturing sector here 100% ownership will attract the investors to explore the opportunity.
*Transportation & Storage:
Transportation and storage (T&S) are one of the largest industries in the UAE. It contributed 9% to the global GDP in 2008. The T&S was severally impacted due to the recent global economic slowdowns. But now this is becoming like one of the major revenue parts of the UAE economy with the strategic plan of the government.
*Hospitality and food service:
Dubai one of the best tourist industry at the globe. The importance of the stability, quality, and development of society is very high. The movement 100% ownership of the society can help the industry to grow.
*Information and telecommunication:
The United Arab Emirates has a pretty well-developed telecommunication infrastructure and it benefits a lot from high penetration rates in both mobile as well as fixed-line networks. 100% ownership of this sector is direct support for the investors.
*Scientific, technical and professional activities:
UAE is one of the countries with the most advanced technologies and innovations. So, the scope of scientific, technical and professional industries is very high in this country. This announcement is a good indication of support for this sector.
*Administrative and support service:
According to the economic report 2018, 1.90% of the total GDP is from administrative and support industry. 100% ownership for the sector is direct support of the government for the development and improvement of the sector.
The UAE has a high potential back support from the government for educational sector 100% ownership is a bridge for other educational sectors to UAE.
The UAE has a comprehensive, government-funded health service and a rapidly developing private health sector that delivers a high standard of health care to the population. Healthcare is regulated at both the Federal and Emirate level. Focus from the government to this sector is the right indication of government support.
*Arts & Entertainment:
Investment opportunities in art and entertainment sector is very high in the UAE. Seasonal visit of the tourists, government support for the industry and flexible policies are always welcoming investors.
The Emirates is also looking at the feasibility to directly offer real estate investment opportunities. Construction sectors say a market like the UAE’S would always generate the opportunities in the construction sectors as all other sectors.
Contributed by Kristine Madugay of MENA Management Consulting for Oryx World Business Centre News and Insights Page.