- E Al Mansoori: The issuance of the law constitutes a quality focused leap in the development of a highly conducive and attractive business environment and climate in the country
- The law strengthens the country’s ability to diversify the production base and localize advanced knowledge and technology
H.E. Eng. Sultan bin Saeed Al Mansoori, UAE Minister of Economy, said that the issuance of Law No. 19 of 2018 on Foreign Direct Investment (FDI) represents a quantum leap in the business environment in the country, strengthening its attractiveness to FDI and supporting its efforts at attracting qualitive investments in sectors such as knowledge, innovation and advanced technology, which constitute a real challenge for sustainable development.
H.E pointed out that the new law stipulates that the ceiling of ownership will be raised to international investments, and mandates that licensed foreign investment companies shall consider national companies permitted by the country’s legislations and the international agreements, of which the country is a part. This will constitute an addition to the ownership systems of companies and investments within the country and enhance its ability to meet sustainable development requirements by expanding and diversifying the production base and transferring and attracting advanced technology, which will in turn, consolidate the localization of knowledge and serve the country’s development agenda.
As part of its implementation, a ‘Foreign Direct Investment Unit’ will be established in the Ministry of Economy, which is responsible for framing foreign direct investment policies in the country, determining its priorities, setting up related plans and programs, creating a comprehensive database and unified investment information regarding foreign investment licenses and data, and making periodic updates about this vital sector.
He added that it was part of the country’s strategic national target to increase its attractiveness to FDI, thereby promoting diversification, injecting the national economy with enough financial liquidity, stimulating trade movement and improving the business environment in the country, as well as fast tracking its innovation goals by focusing on specific investments related to the Research and Development of Knowledge and Technology.
Al Mansoori also pointed out that the Government is making concerted efforts to channelize FDI towards sectors of priority in the country’s development agenda, such as those contributing to job creation, enhancing productivity, technology transfer, exchange of experiences and improving sustainability. This plays a major role in enhancing the business environment within the country, in addition to aspects such as advanced electronic and smart infrastructure and services, business-friendly legislative and regulatory frameworks, incentive tax policies, easy administrative customs procedures and related services, high-efficiency government services, strategic geographical location and economic stability, among others.
H.E added that these efforts have been clearly reflected in the advanced ranks achieved by the country across various global competitiveness indicators. In 2017, the country was ranked 30th in the world in terms of its ability to attract FDI, jumping 5 spots since 2016, according to the results of the 2018 FDI Report issued by the United Nations Conference on Trade and Development, (UNCTAD).
In 2017, UAE attracted FDI to the tune of USD 10.4 billion, ranking first in the Arab world, accounting for 36 per cent of the total FDI inflows into the Arab countries group, and second in the West Asia region, accounting for 40.6 per cent of the total FDI inflows into the region.
These results confirm the UAE’s leading position in the field of Foreign Direct Investment and reflect the country’s ability to be a significant player in the movement of FDI in and out of the region, as well as globally.
With the new Decree-Law on Foreign Direct Investment, we are looking forward with greater optimism, to our estimates of the volume of investment flows during the coming phase. This is in line with the government’s efforts to join hands with the private sector to bolster the business and investment climate in the UAE and consolidate its position as the ideal FDI destination, thus serving the strategic vision and development objectives of the country.