New UAE FDI law comes into force

The UAE has been the prime regional destination of FDI inflows at about $11 billion in 2017.

The game-changing UAE investment law, which is expected to change nation's business landscape by attracting increased foreign direct investments, has come into effect.
The President, His Highness Sheikh Khalifa bin Zayed Al Nahyan, has issued the new Foreign Direct Investment (FDI) law which aims to promote and develop the country's investment environment, and attract foreign direct investment in line with national development policies, according to WAM.
The UAE has been the prime regional destination of FDI inflows at about $11 billion in 2017, accounting for 22 per cent of total flow to the Middle East and North Africa region.
Cumulative FDI inflow increased from $80.6 billion in 2012 to around $130 billion in 2017.
In accordance with Article II, the Decree-Law No. (19) of 2018 aims to consolidate the country's position as a major attraction for foreign direct investment at the regional and global levels, attract and encourage foreign investment.
Marwan bin Jassim Al Sarkal, executive chairman of Sharjah Investment and Development Authority (Shurooq), said the decree comes at a time when the UAE continues to experience good growth in capital and foreign direct investment inflows.
"This decree underscores the UAE's keenness, under the leadership of President His Highness Sheikh Khalifa bin Zayed Al Nahyan to further diversify sustainable development, and cement our position on the world map as a leading foreign investment destination," he said.
The law, published in the latest issue of the Official Gazette, seeks to expand and diversify the production base, transfer and attract advanced technology, knowledge and training, in addition to increasing the flow of foreign direct investment in priority sectors to achieve balanced and sustainable development.
This will help provide job opportunities in various fields, achieving the best returns of available resources and high added value to the country's economy, WAM said.
"Our strategic location, economic resilience and diversified sectors are the mainly responsible for the UAE's lucrative and stable environment, which continues to attract global businesses that benefit from the vibrant local economy," Sarkal said.
FDI unit
As per the law, a 'Foreign Direct Investment Unit' is to be established in the Ministry of Economy.
This will be responsible for proposing foreign direct investment policies in the country and determining its priorities, and setting up associated plans and programmes and work on their implementation following their approval by the UAE Cabinet.
The FDI unit will be responsible for establishing a comprehensive database for UAE investments, including data on existing FDI projects, and will review and update information on a periodical basis.
Additionally, the relevant authorities shall provide the unit with data on approved investment projects.
The FDI unit will also oversee the creation of an attractive environment for foreign direct investment, facilitate the procedures for registering and licensing foreign direct investment projects, as well as monitor and evaluate their performance in the country.
Mohamed Juma Al Musharrkh, CEO of Sharjah FDI Office (Invest in Sharjah), point-ed out that the decree aligns with the developments that influence mechanisms of economic growth.
"Economic growth is impacted by modern-day legislative systems and policy decisions. The UAE has many competitive advantages, which have bolstered its position as a formidable hub for trade and commerce in the region and around the world, given its annual growth rates and progressive legislation imbued with am-ple flexibility and foresight.
"With this decree, the UAE continues on its mission to offer a first-rate investment environment to foreign businesses," he said.
As per the law, licensed foreign investment companies shall be granted the same treatment as national companies, within the limits permitted by the legislation in force in the state and the international conventions to which the UAE is a party.
Article 10 of the Decree-Law stipulates that the licensing authority and the responsible authority shall determine the conditions and procedures for the establishment and licensing of FDI projects based on the listed required documents of the Decree-law, and the laws of the country.
FDI projects that exist before the new law shall retain all the privileges given in accordance with former legislations, agreements and contracts within the specified period, WAM said. 
issacjohn@khaleejtimes.com

• Abu Dhabi

Issac John

issacjohn@khaleejtimes.com