The investment opportunities in the healthcare sector of the province of MENA is attracting investors worldwide, but there are certain restrictions that an investor has to navigate by abiding the local laws that are required for hospital set up in the MENA region.
The licensing requirements for the hospitals differ in Bahrain, Egypt, Iraq, Jordan, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates which come under the MENA region. It is prudential to know some of the requirements and restrictions imposed under the relevant local law about hospitals operations.
The key players for the licensing requirement are:
The regulatory authorities:
The general regulatory authority that oversees the hospital set up in MENA would be the Ministry of Health. However, the Dubai Health Authority performs this role in the Emirate of Dubai, and the Healthcare Authority of Abu Dhabi plays this role in Abu Dhabi.
The registration requirement:
The MENA region has differences in the registration requirement in its divisions. In Bahrain, hospitals are registered at the Ministry of Industry, Commerce, and Tourism, whereas in Egypt it is done by the Commercial Registry Office. In Kuwait, the Ministry of Commerce and Industry takes care of the commercial registrations of hospitals.
Imposition of local ownership:
The investors have to pay attention to the fact that the most of countries of the MENA region have their licensing requirements of including local ownership. This clause may extend to the properties owned by the hospital or the properties that will be purchased by the hospital.
- In Egypt, any foreign national can own shares in a hospital, except for some geographical regions (g., Sanai) where the restrictions of foreign investment apply.
- Under UAE or Kuwait,at least 51% of the entity that operates a hospital must be owned by the local shareholder(s).
- In Saudi Arabia, before a non- Saudi party acquires shares in a hospital operator, that party will have to secure a license from the Saudi Arabian General Investment Authority.
- Finally, in some GCC states, there are also specific nationality requirements in respect of medical staff or a Manager/ Director of the medical facility.
These requirements are crucial for a hospital set up in MENA, and there are also the various licensing requirements to be considered by the investors.
The practicality of these conditions:
Even though the legality of setting up a hospital in MENA may look standard; the investors have to pay attention to the practicalities that may arise under the hospital incorporation or acquisition process that might not have been clear under the local law of the specific region. Most of the times, the local shareholder are listed as owners of the hospital by the authorities rather than mentioning the hospital as the license holder or mentioning all the shareholders as the license holders.
When planning to invest in a hospital set up in MENA region, the investor should be well versed in the licensing requirements and the local law. Even though they may appear restrictive, they also help in meeting commercial business objectives and the legal requirements.
Reach our consultant at [email protected] to know more about healthcare setup in MENA region or visit us at www.intuitconsultancy.com
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