UAE’s most recent investment law has become the talk of the town as it opens up business regulations further and allows 100 percent ownership to foreign investors in certain onshore business sectors. This law is currently awaiting the FNC’s approval and is planned to be introduced in the last quarter of this year.
Currently, foreigners can only fully own a company in free zones. This change is likely to create several changes including increasing private and foreign direct investments by up to 15% – 20%, which could create a knock-on effect of economic growth speeding up the slowing economy. In addition to this, the law could also help create jobs, and give more security to businesses.
Apart from this, UAE has already made some changes from Visa regulations for employers, to the Bankruptcy law which came into effect recently. This bankruptcy law change allows for companies to restructure when in a distressful financial position. This along with the upcoming long-term residency permits for certain groups of foreigners (from investors to specialists in scientific, technical, medical and research facilities) that is planned to be coming into effect towards to the end of the year.
Therefore, the new landmark investment law, set to come into effect in the last quarter, supported with the recent bankruptcy law, and the upcoming residency changes could strengthen UAE as an investment hub in the region by boosting investor confidence. In addition to this, these changes can also reduce the transitory mindsets of numerous expatriates by giving more confidence. This is predicted to reduce repatriation in the form of remittances back to the home country of the expatriates. This is significant since remittances form a large part of the UAE’s outflow of income due to the population being more foreign than local. This reduction in remittances encourages consumption within the UAE economy further boosting economic growth.