09 Nov UAE is all Set with the New Plan to Spur FDI and GDP Growth
UAE has long been a hub for trade and business. The country has always been in the eye of global investors. The opportunities and profitability that UAE offers to the businesses attracts huge Foreign Direct Investment (FDI). UAE has now introduced a new investment law to attract more foreign investment and boost the economic growth of the country. The President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, issued Decree No. (19) of 2018 on Foreign Direct Investment on 30th October 2018. The new law aims at making the country the first pick among global investors and promote country’s investment environment.
With the new law the UAE will be able to consolidate its position as the leader in attracting foreign direct investment not only at the regional level but also at the global level. The new law shall attract and encourage more foreign investment.
The introduction of the new law shall help UAE to expand and diversify its production base, attract latest and innovative technology, and enhance knowledge and training. The policy aims to increase the inflow for foreign direct investment to help in achieving sustainable and balanced development of the nation. It will help in generating job opportunities across different sectors of the economy, achieving the best returns of available resources and over all increased value to the country’s economy.
The law further states that, a “Foreign Direct Investment Unit” shall be established in the Ministry of Economy which will be responsible for framing and proposing the policies relating to FDI. Furthermore, the unit shall also determine the priorities and set up associated plans and programmes and work towards their implementation after they get approval from the cabinet of UAE. The FDI Unit shall also look into developing an attractive environment for FDI. They will ensure and facilitate the procedures for licensing and registering the FDI projects. In addition, the FDI Unit shall also monitor and evaluate their performance in the country.
As per the new law, the foreign companies shall be given a best investment environment. Moreover, the licensed foreign investment companies shall be treated like national companies within the limits that are permitted by the legislation of the state and international conventions to which UAE is a party.
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The Article 10 of the Decree states that licensing authority and the other respective authority shall hold the power and responsibility to determine the conditions and procedures for licensing and establishing the FDI projects on the basis of listed documents of the Decree law and the law of the land. Furthermore, the FDI projects that were already in existence before the enforcement of the new law shall continue to retain the privileges that were given as per the former legislations, agreements and contracts within the specified period.
The announce of the new law comes as foreign direct investment flows in Dubai rose to $4.84 billion in first half of 2018 which is 26% up as compared to the last year. As per the reports from the Dubai Investment Development Agency (Dubai FDI), an agency of the Department of Economic Development (DED), the number of FDI projects in Dubai surged by 40 percent to 248 in 2018.
Sincere efforts by the government in the form of relaxed regulations, government diversification efforts and lower cost of doing business in Dubai has helped the city bag 10th rank globally for greenfield FDI.
We expect the UAE investment law to be a game-changer which will change country’s business landscape by attracting increased foreign direct investments. With increased FDI, more and more companies will aim to set up their business in UAE to grab this opportunity.
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