The recent ground-breaking policy reforms allowing full ownership rights to the foreign companies are primarily designed to enhance the openness of UAE’s business climate and increase the number of businesses operating in the UAE to one million within the next decade jumping three-fold from 300,000 currently, the Minister of Economy added.
In a virtual media briefing, the economy minister Abdulla Bin Touq Al Marri highlighted the amendments to the commercial companies law would increase the business transparency and attract more foreign investment and help diversify the economy and ensure additional non-oil income.
“In light of the recent economic changes and challenges that were witnessed globally as a result of the Covid-19 pandemic, the realisation of this vision and this transformation has become even more necessary and urgent.”
Al Marri also pointed out the key changes will boost investor’s confidence and “provide a greater opportunity for establishing productive partnerships between citizens and foreign investors” and also enable the nation ” to contribute to the creation of new job opportunities, development of market movement, localization of technology, and development of skills and human capabilities.”
Other notable personalities who attended the briefing included Dr Ahmad Belhoul Al Falasi, Minister of State for Entrepreneurship and SMEs; Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade; Abdullah bin Ahmed Al Saleh, Undersecretary of the Ministry of Economy; Dr Obaid Saif Hamad Al Zaabi, CEO-Securities and Commodities Authority.
“We are expecting new companies to come in, more FDI (foreign direct investment) flow to the country and we are going to support those companies and direct them to right clusters and projects within the country,” Thani Al Zeyoudi, minister of state for foreign trade noted during the briefing.
The compulsory provision for a UAE national or a UAE-owned company acting as an agent has been abolished as part of the new measures. A stipulation requiring a company chairman to be an Emirati and for boards to have a majority of Emirati directors has also been abandoned.
The reforms have been welcomed by the business community as it would reduce the costs of doing business and improve competitiveness and stock market listings.
“There is no doubt that the new amendments to the commercial companies law will encourage local and foreign investment. It will encourage initial public offerings and listings in the country’s capital markets and will increase the rate of transactions and attract foreign capital, which in turn will increase the depth and size of financial markets capitalisation,” Obaid Al Zaabi, chief executive of the Securities & Commodities Authority said during the event.
Al Marri added the UAE currently has around 300,000 companies of various formats and also highlighted saying, “National companies represent 99.3 per cent of this figure, and the new amendments are designed to increase the number of companies operating in the country to one million within the next ten years.”
“Besides, they will accelerate the rate of transformation of SMEs in general into joint-stock companies listed in the financial markets to secure public financing, risk-based capital financing activities market development is also expected to be an outcome,” emphasized Al Marri.
Al Falasi described the initiatives that are being undertaken in partnership with various concerned government establishments to lay sound foundations for the transformation towards a more flexible economic model including updation of the regulations and legislation governing economic, commercial and investment activities in the country.
Launching and implementing new initiatives and policies that would enhance the national economy’s ability to accommodate the changes in the current global economic scenario, develop future sectors and generate opportunities are also on the UAE government’s agenda to promote new business–set–up–in–Dubai.
The minister for SMEs pointed out that the new reforms would help protect the interests of both the UAE and the foreign investors by reviving the market movements, increasing the number and size of companies and projects in the country, and diversifying the foreign investment base.
Al Zeyoudi emphasized the efforts of the UAE to bring about a qualitative transformation to the existing economic model encouraging Emiratis to directly engage in business and invest in the local market.
“It will also boost the UAE’s ability to attract start-ups, innovative companies, and SMEs focusing on advanced technology,” Al Zeyoudi noted.
Al Saleh said as per the new law, the formation of a foreign company branch can now be possible without a Local Agent.
Recent policy reforms made UAE companies more optimistic than their global peers about profitability returning to pre-Covid levels in the next two years as business slowly recovers with more investments pouring in for doing–business–in–UAE.
