FOREIGN DIRECT INVESTMENT LAW- A GAME-CHANGER FOR UAE & DUBAI BUSINESS SETUP

This article was updated on June 21st, 2023

This article has been researched and written by Scott Cairns and the team at Creation Business Consultants and has not used AI in generating this article.

The UAE Investment Law came into effect in 2018, and its implementation changed the UAE business setup scene by attracting Foreign Direct Investment (FDI) growth. The issued FDI Law aims to further promote and progress the nation’s investment setting in line with the UAE’s development policies.

With FDI inflows at about USD $20.667 billion in 2022, the UAE has been the prime destination of foreign investors and accounted for 31% of total flow to the Middle East region.

As per Article II, the Decree-Law No. (19) of 2018 aims to consolidate the UAE’s position as a major FDI attraction at the regional and global levels to further encourage its foreign investment.

WHAT COMPANY STRUCTURES ARE AVAILABLE FOR FOREIGN DIRECT INVESTMENT IN DUBAI & THE UAE? 

For a business to expand and operate in Dubai and the UAE the are many corporate structure and ownership options available. FDI projects may take any of the following legal forms:

1. A Limited Liability Company (LLC) (including a sole proprietorship).
2. A Private Joint Stock Company (PJSC) (including a sole proprietorship).

WHAT IS FOREIGN DIRECT INVESTMENT SUPPORT IN DUBAI? 

Dubai Foreign Direct Investment unit provides vital information and priceless assistance to foreign businesses looking to invest in Dubai. Dubai FDI offers professional support with all elements of business management and decision-making, from choosing the best legal forms to choosing the right commercial ventures. Having a registered corporate service provider is essential to understanding and navigate Dubai FDI requirements for setting up a business in Dubai and the UAE.

FOREIGN DIRECT INVESTMENT IN SHARJAH

Sharjah FDI promotes a broad range of investment opportunities in the Emirate. Sharjah Investment and Development Authority (Shurooq) established the Sharjah FDI Office (Invest in Sharjah). The Sharjah FDI office assists investors in thoroughly comprehending procedures, benefits of investment, and insights on important industries that suit their business profiles.

PROMISING FOREIGN INVESTMENT SECTORS

Ministry of Economy identifies the following as promising foreign investment sectors:

1. Agritech
2. Transport infrastructure
3. Senior housing and care organisations
4. Healthcare facilities, therapeutics, and devices
5. Renewable power generation/water supply
6. E-Healthcare/e-Pharma
7. Cyber security
8. Artificial intelligence
9. Subscription-based products/digital content
10. Fintech
11. eCommerce platforms
12. Artificial reality/virtual reality
13. Blockchain
14. Renewable energy
15. Carbon-capture technology
16. 5G infrastructure
17. Smart buildings
18. 3D printing
19. Robotics
20. Consumer companies
21. IoT and sensors
22. Sustainable transport
23. Sustainability in food consumption
24. EDtech

These sectors demonstrate significant growth in the form of foreign investment. The UAE government is pushing these sectors to continue to attract foreign investment.

WHAT IS THE FOREIGN DIRECT INVESTMENT UNIT?

The Foreign Direct Investment Unit was established by the Ministry of Economy. The UAE FDI Unit is responsible for proposing FDI strategies in the UAE by determining its priorities and setting up associated programs under the UAE Cabinet’s approval.

Furthermore, the unit is also responsible for launching a comprehensive database for UAE investments which includes existing FDI projects data. They also review and update information on a periodical basis.

The FDI Unit is also responsible for creating an attractive FDI environment, facilitating the registration and licensing of Foreign Direct Investment projects, as well as monitoring and evaluating their performance.

Mohamed Juma Al Musharrkh, Sharjah FDI Office’s CEO, noted that the decree aligns with the developments that impact 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 ample flexibility and foresight. With this decree, the UAE continues its mission to offer a first-rate investment environment to foreign businesses,” he said.

Licensed foreign investment company formations shall be treated the same as national companies but within the bounds allowed by the state’s legislation and the international conventions.

Article 10 of the Decree-Law orders that the licensing authority shall determine the conditions for licensing of FDI projects based on the required documents of the Decree-Law, and the UAE laws.

TAKEAWAY

Creation Business Consultants will keep you informed about the latest regulations which could impact your business. Our team of Corporate Structuring and tax experts will leverage the experience to help understand the latest changes while simultaneously providing you with all the details needed to run your company in Dubai. Contact a member of our team to learn more about setting up a company in the UAE and Saudi Arabia, email us at [email protected] or call UAE at +971 4 878 6240 and Saudi Arabia at +966 54 511 2494