New law for Foreign Ownership of firms by year-end

The law needs to be submitted to the cabinet within a month, and will be effective by end of the year, he said when speaking during a conference.

As per the current regulations, business owners belonging to all nationalities except from the GCC nations will require a local majority partner, except in free zones such as Dubai Internet City and Jebel Ali, where 100 percent foreign ownership is permitted.

The new regulations have been in pipeline for several years now and are aimed at increasing foreign investment. Restrictions on complete ownership have been considered as a major reason for holding back investments amidst competition.

Being the world’s third largest oil exporter, UAE has been striving to diversify its economy from its dependency on energy exports by pouring windfall oil revenues into financial services, real estate and infrastructure.

The law, which is in its final stages, will include a clause stipulating a minimum capital of 200 to 300 million Dirhams ($54 to $82 mn). The new law is inline with recommendations by World Trade Organization (WTO).

Dubai has been long seeking to place itself as an international tourism and financial center, luring businesses to its free zones, with promises of tax-free earnings.

The global financial crisis has led to a halt on the six-year oil-fuelled economic boom in the Gulf region with Dubai, being hit the hardest, following its real estate sector crash in 2009.

Posted on 10/3/2010

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