19th November 2020
Sheher Bano - Associate, Middle East Alliance Legal Consultancy LLC
Abu Dhabi has introduced a new Foreign Direct Investment (FDI) licence that allows foreign investors to hold 100 per cent ownership of their businesses within the Emirate of Abu Dhabi. MSI's Abu Dhabi law member Middle East Alliance provides further insight.
The new license further consolidates Abu Dhabi’s position as a global hub for investment and “ease of doing business”, creating the list of investment opportunities within various economic sectors and activities applicable for foreign investments will deliver a strong positive impact to the emirate’s investment environment
Abu Dhabi’s Department of Economic Development (ADDED) said that the new FDI licence targets businesses with capital ranging from Dh2 million to Dh100 million or even higher.
The long-anticipated FDI licence, which is expected to have a far-reaching positive impact on Abu Dhabi’s business landscape, covers 122 different economic activities related to the agricultural, industrial and services sectors.
This list indicates that the UAE is more inclined towards non-oil sectors and ensuring the most ideal way to protect the rights of foreign investors, following the directives of the Abu Dhabi Government in attracting foreign direct investments to the emirate”.
This will encourage investors, spur business development for foreign companies as well as attract businesses in technology and advanced industries” that contribute to the emirate’s economic diversification policy.
The issuance of the FDI licence is in line with the provisions of Federal Law No (19) of 2018 regarding Foreign Direct Investment
Under the FDI Law, foreign investment above 49 per cent will not be permitted in sectors which appear on a “negative list”. The UAE Cabinet has the discretion to amend the “negative list” by adding or removing sectors.
There are currently 13 sectors specified in the “negative list”, including banking, insurance, and commercial agencies.
The procedures in securing the license are fast and easy through ADDED’s Abu Dhabi Business Center (ADBC), which only require a few key steps:
Main permitted activities in Abu Dhabi are as follows:
The list of service activities
The list of service activities that can be practised with the licence include:
The implementation of the FDI law in Abu Dhabi “contributes to achieving various objectives such as expanding the base of foreign investments; increasing the size of capital flows; enhancing and diversifying local production, and increasing the emirate’s exports of goods and services.
Further information please visit: https://added.gov.ae/Our-Initiatives/Foreign-Investment
Middle East Alliance Legal Consultancy LLC (MEALC) is a progressive, multicultural regional law firm based in Abu Dhabi, the capital and center of United Arab Emirates. Our firms provides a wide spectrum of legal services encompassing corporate, commercial, financial and administrative regulations, litigation, and arbitration.
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