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UAE clears 100% ownership rules

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The full ownership law will have a positive multiplier effect in form of creation of jobs.

The full ownership law will have a positive multiplier effect in form of creation of jobs.

Dubai - Nation issues list of all 122 activities under 100% foreign ownership regime

Published: Sat 18 Apr 2020, 1:44 PM

Updated: Sun 19 Apr 2020, 5:25 PM

  • By
  • Waheed Abbas

The UAE has released the full list of 122 categories for 100 per cent ownership in the mainland under the Foreign Direct Investment (FDI) Law.
Cabinet Resolution No.(16) of 2020 determines the 'Positive List' of sectors and economic activities in which foreign direct investment is permissible and the percentage of ownership is 100 per cent.
In 2019, the UAE Cabinet had approved a Positive List of activities under which 100 per cent foreign ownership in companies outside free zones was permitted. However, this remained subject to certain criteria being satisfied.
The list covers key sectors - agriculture; manufacturing; transport and storage; hospitality and food services; information and communications; science and technology; healthcare; education; art and entertainment; and construction.
Cabinet Resolution No.(16) of 2020 also sets condition that companies need to invest in new technologies, contribute to research and development and meet the requirements of UAE licensing entities.
The Positive List includes a number of interesting activities such as manufacturing of toys, sports goods, electrical equipment, consultancy services, advertising, photographic activities, construction of buildings, translation services, primary, secondary and higher education, hotel and restaurant management, hospitals and music bands, among others.
"Manufacturing is the backbone of any country but it has not taken off so much here due to the nature of capital intensive projects and legal ownership restrictions. The investor is a minority shareholder legally always which is a major limitation, therefore, operating a manufacturing set up is very difficult," said Raju Menon, chairman of Kreston Menon.

He noted that operating a manufacturing unit in the free zones is the options available to hold 100 per cent but operating costs in free zones now-a-days are too expensive.

"Holding 100 per cent manufacturing operations in mainland is very attractive. However, capital adequacy is a precondition which any serious industrialist would adhere to. In my opinion manufacturing is the sector more benefitted. Apart from that, Private Joint Stock Company (PSC) can be the set-up vehicle. It is fully protected with the shield of limited liability," said Menon.

Anurag Chaturvedi, managing partner at Chartered House Tax Consultancy, said the full ownership law will have a positive multiplier effect in form of creation of jobs, an increase in productive capacity, resulting in less need to import because goods are produced in the domestic economy.

"FDI will compensate for the decrease in domestic investment as a result of Covid-19, and can help 'kick-start' the process of economic development," said Chaturvedi.

He said the allowing full-ownership to PJSC and a single person company is one of the unique preposition to boost the investment in service sector with minimum capital as per the current legislation in legal, audit and accounting amongst others. The minimum investment has been set at Dh2 million for manufacturing; Dh3 million for manufacturing of sports and toy industries; Dh20 million for manufacturing activities of automobiles, metal ad medical equipment; and Dh100 million for healthcare.
- waheedabbas@khaleejtimes.com
 
 
Agriculture sector

 ISIC4
Business activity
Minimum Capital
Conditions and controls for foreign direct investment
1     
01111
Grain cultivation (wheat, corn, barley, etc.)
 - use of modern technology
- achievement of high added value
- contribution in the research and development field
- satisfaction of the requirements of the licensing entities in the state
2     
01112
Cultivation of bean crops
 
3     
0113
Cultivation of vegetables, melons, roots and tubers
 
4     
0114
Cultivation of sugar cane
 
5     
0116
Cultivation of fiber crops
 
6     
0119001
Flowers and Flower Buds Cultivation
 
7     
0121
Growing of grapes
 
8     
0123001
Fruits and Citrus Cultivation
 
9     
0124
Growing of pome fruits and stone fruits
 
10 
0125
Growing of other tree and bush fruits and nuts
 
11 
0126
Growing of oleaginous fruits
 
12 
0127
Growing of beverage crops
 
13 
01289
Growing of aromatic, drug and pharmaceutical crops
 
14 
0161
Support activities for crop production
10
15 
0162
Support activities for animal production
 
16 
0163
Post-harvest crop activities
 
17 
0164
Seed processing for propagation
 
18 
0210
Silviculture and other forestry activities
 
19 
0240
Support services to forestry
 
 
Manufacturing sector
 ISIC4
Business activity
Minimum Capital
Conditions and controls for foreign direct investment
20 
10
Manufacture of food products (except):
1071- Manufacture of bakery products
105 - Manufacture of diary products
108 - Manufacture of prepared animal feeds
 
15
- use of modern technology
- achievement of high added value
- contribution in the research and development field
- satisfaction of the requirements of the licensing entities in the state
21 
10
Manufacture of beverages (except):
1101 -Distilling, rectifying and blending of spirits
1102 -Manufacture of wines
1103- Manufacture of malt liquors and malt
15
22 
14
Manufacture of wearing apparel (except):
14109 - Tailoring and Sewing of Wearing Apparel
1410122 - Military Garments Manufacturing
15
23 
15
Manufacture of leather and related products
15
24 
16
Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials
15
25 
2012002
Straight or Complex Fertilizers Manufacturing
15
26 
2013
Manufacture of plastics and synthetic rubber in primary forms
15
27 
2021
Manufacture of pesticides and other agrochemical products
15
28 
2022
Manufacture of paints, varnishes and similar coatings, printing ink and mastics
15
29 
2023
Manufacture of soap and detergents, cleaning and polishing preparations, perfumes and toilet preparations
15
30 
2029006
Glues and Prepared Adhesives Manufacturing
15
31 
2029008
Manufacture of dyestuffs and pigments
15
32 
2029009
Textiles and Leather Finishing Used Chemical Materials Manufacturing
15
33 
2029013
Manufacture of photographic plates, films
15
34 
2029019
Gelatine and Its Derivatives Manufacturing
15
- use of modern technology
- achievement of high added value
- contribution in the research and development field
- satisfaction of the requirements of the licensing entities in the state
35 
2029021
Essential Oils Manufacturing (Essence)
15
36 
2029022
Extracted Natural Aromatic Products Manufacturing
15
37 
2029023
Aromatic Distilled Waters Manufacturing
15
38 
2029024
Matches Manufacturing
15
39 
2029025
Welding Powders and Pastes Manufacturing
15
40 
2030
Manufacture of man-made fibres
15
41 
2100
Manufacture of pharmaceuticals, medicinal chemical and botanical products
15
42 
22
Manufacture of rubber and plastics products
15
43 
23
Manufacture of other non-metallic mineral products
15
44 
24
Manufacture of basic metals (except):
242 Manufacture of basic precious and other non-ferrous metals
2432 Casting of non-ferrous metals
20
45 
25
Manufacture of fabricated metal products, except machinery and equipment (except)
2529 Manufacture of weapons and ammunition
15
46 
26
Manufacture of computer, electronic and optical products
15
47 
27
Manufacture of electrical equipment
20
48 
28
Manufacture of machinery and equipment n.e.c. (except)
28259 Tobacco Processing Machinery Manufacturing
100
49 
29
Manufacture of motor vehicles, trailers and semi-trailers
100
50 
3011101
Building of Commercial Vessels
100
51 
3011103
Ships and Floating Structures Sections Manufacturing
100
52 
3011905
Construction of Drilling Platforms, Floating or Submersible
100
53 
3011906
Construction of Floating Structures
100
54 
3011907
Building of Hovercraft
100
55 
3012
Building of pleasure and sporting boats
15
56 
3020
Manufacture of railway locomotives and rolling stock
20
57 
3030
Manufacture of air and spacecraft and related machinery (except):
3030006 Military Ballistic and Guided Missiles Manufacturing
100
58 
3090
Manufacture of transport equipment n.e.c.
20
59 
31
Manufacture of furniture
15
60 
3220
Manufacture of musical instruments
2
61 
3230
Manufacture of sports goods
3
62 
3240
Manufacture of games and toys
3
63 
3250
Manufacture of medical and dental instruments and supplies
20
64 
3290
Other manufacturing n.e.c.
3
65 
3312001
Repair and maintenance of train engines
15
66 
3312002
Repair and maintenance of engines ship
15
67 
3315001
Repair and maintenance of ships
15
68 
3315004
Repair and maintenance of trains and railway equipment
15
69 
3315005
Maintenance and Repair of Aircrafts Engines
15
70 
3315006
Repair and maintenance of aircraft
15
 
Service sector
 ISIC4
Business activity
Minimum Capital
Conditions and controls for foreign direct investment
71                  
6910002
Legal Consultancy Offices
As per the applicable regulations
-          Not to advocate before the UAE courts.
-          Not to carry out any judicial procedure before courts, arbitral tribunals, and judicial and administrative committees.
-          Not to carry out attestation activities
-          To obtain the approval of the relevant entities in charge of licensing such activities in the State
-          To be a natural or legal person known for its excellence in this field
72                  
692
Accounting, bookkeeping and auditing activities; tax consultancy
As per the applicable regulations
Only permissible for tax planning for businesses and consultancies, preparing and reviewing taxes on businesses
73                  
711
Architectural and engineering activities and related technical consultancy
As per the applicable regulations
To be a natural or legal person known for its excellence in this field
74                  
862
Medical and dental practice activities
75                  
75
Veterinary activities
76                  
620
Computer programming, consultancy and related activities
As per the applicable regulations
To provide a technical team of no less than 5 specialized programmers by the end of the first year of the company
77                  
72
Scientific research and development
As per the applicable regulations
As per the applicable regulations
78                  
7730-77300
Renting and leasing of other machinery, equipment and tangible goods
79                  
471
Retail l sale in non-specialized stores (except Cooperative Societies 4711001)
80                  
731
Advertising
81                  
732
Market research and public opinion polling
82                  
702
Management consultancy activities
83                  
712
Technical testing and analysis
84                  
331
Repair of fabricated metal products, machinery and equipment (except ships or aircrafts and other transport equipment)
85                  
8121-81210
General cleaning of buildings
86                  
742
Photographic activities
87                  
8292-82920
Packaging activities
88                  
823
Organization of conventions and trade shows
89                  
741
Specialized design activities
90                  
7490005
Legal Translation Services
91                  
7490006
Translation services, movies and television programs
92                  
7490012
Translation Publications Services
93                  
8299002
Translation Services
94                  
41
Construction of buildings
As per the applicable regulations
Only permissible for large-scale infrastructure projects such as airports, highway roads, sport facilities and projects whose value exceed AED 450,000,000
95                  
42
Civil engineering
96                  
432
Electrical, plumbing and other construction installation activities
97                  
433
Building completion and finishing
98                  
431
Demolition and site preparation
99                  
439
Other specialized construction activities
100               
7730009
Construction and Building or Demolition Machines and Equipment Renting
101               
851
Pre-primary and primary education
As per the applicable regulations
  1. Public education excluded.
  2. To obtain the approval from the entities in charge of education to license such activities and to comply with such standards and controls as may be determined by them.
  3. To comply with the conditions and standards of school facilities and to ensure a high level of education quality
102               
852
Secondary education
103               
853
Higher education
104               
854
Other education
105               
370
Sewerage
As per the applicable regulations
As per the applicable regulations in this regard
106               
382
Waste treatment and disposal
107               
3900001
Pollution Consequences Treatment and Environment Protection
108               
861
Hospital activities
100
  1. Subject to the approval of the relevant authorities in light of the economic need taking into account the number of hospitals, medical and health centers in a specific area.
  2. Dubai Healthcare City is excluded from the above condition.
109               
869
Other human health activities
70
As per the applicable regulations
110               
8211001
Hotel Management
As per the applicable regulations
111               
8211004
Restaurants Management
112               
90009
Creative activities and presentation of arts drama (theater)
Permissible only for theater activities and live bands
As per the applicable regulations
113               
9000104
Music Band
114               
9000110
Circus
115               
8130002
landscape and gardening services
116               
9103-91030
Botanical and zoological gardens and nature reserves activities
Permissible only for public garden services and specialized garden services.
117               
5012-50120
Sea and coastal freight water transport
As per the applicable regulations
118               
5022001
Internal Water Transportation of Goods
119               
7730016
Commercial Ships Rental
120               
5222002
Ship Piloting and Towing
121               
5222007
Marine towing of boats and jet sk
122               
New
Activities of holding companies in intellectual property
 Source: Fichte & Co.



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