Foreign Direct Investment – UAE
The UAE is the world’s 15th-biggest recipient of foreign direct investment in 2020, ranking one place above the UK and seven places higher than the prior year, according to the UN Conference on Trade and Development. UAE made a number of changes to commercial and company laws over the past few years in a bid to spur investment. New rules allowing 100 per cent foreign ownership of onshore companies in most sectors of the economy came into force last month.
The decision of the federal cabinet approved in 2020 allowed up to 100% foreign ownership for economic activities across industrial sectors, including manufacturing, agriculture, construction, space, renewable energy, hospitality and food services, healthcare, transport and storage, ICT, professional, scientific and technical activities, administrative and support services, educational activities, and art and entertainment.
Why invest in UAE
The strengths of the country for FDI are:
- No direct tax of corporations (except oil, banking and insurance sectors) or of individuals
- No foreign exchange control or constraints on repatriation of funds
- Excellent business climate
- Long term political stability
- Dynamic and diversified economy
- Very rich hydrocarbons resources
- Solid and profitable banking sector with a powerful sovereign fund and favorable regulations for foreign investments
- Geographical location of the country
- Low cost foreign labor force
- Good transport and production infrastructure
- Access to low cost energy
- Ease of doing business.
Investment Opportunities
Key FDI Sectors in the UAE Economy
FDI in the UAE is mainly in: wholesale and retail trade, real estate activities, financial services and insurance, manufacturing, and mining and quarry exploitation.
High Potential Sectors
Aeronautical equipment and services, defense, franchising, healthcare, education, electrical energy, equipment and services related to the oil and gas industries, renewable energies (huge photovoltaic potential), natural resources management (water treatment).
Privatization Programmes
Abu Dhabi has launched a policy of attracting foreign direct investment and has planned to accelerate the privatization of several state-owned companies. In 2018, Mubadala, one of Abu Dhabi’s sovereign wealth funds, sold a stake in Emirates Global Aluminium, one of the largest companies in the UAE, as reported by the Financial Times.