The Federal Law by Decree No. 19 of 2018 regarding Foreign Direct Investment (“FDI Law”) aimed to encourage foreign investment in certain sectors in the UAE through removing the requirement that 51% of the shares of a company be held by an Emirati individual or 100% Emirati owned company.
On 17 March 2020, the UAE Cabinet issued Resolution No. 16 of 2020 Defining the Positive List of the Economic Sectors and Activities in which Foreign Direct Investment is Permitted and their Ownership (“Resolution 16”). Resolution 16 included a complete list of the sectors and activities in which foreign investors can own 100% of the shares (the “Positive List”).
List of business activities open to 100% foreign ownership
The Positive List entails 122 activities which specifies required minimum capital for each activity and other requirements. We provide below a summary of the activities:
- The cultivation of various agricultural items and various farming activities.
- The manufacturing of a variety of items such as leatherware, wood, agrochemical products, detergents, rubber and plastic, electronics, machinery and equipment.
- The building of commercial vessels, helicopters and boats.
- Certain services such as legal consultancy, accounting, engineering and medical activities.
- Construction of buildings, civil engineering and other specialized construction activities.
- Creative activities, theatre, musical band and circus.
- Sea and coastal freight water transport and inland freight water transport.
- Holding companies in intellectual properties
The FDI Law does not apply to projects in the Free Zones. Furthermore, the Law incorporates a “Negative List” which comprised of sectors and activities which will not be altered by the Law. The Negative List includes the following:
- Exploration and production of petroleum materials.
- Investigations, security, military sectors, manufacturing of arms, explosives and military equipment, devices and clothing.
- Banking and financing activities, payment systems and dealing with cash.
- Insurance services.
- Hajj (pilgrimage) and Umrah services, providing employment and recruitment services for staff and servants.
- Water and electricity services.
- Services related to fisheries.
- Postal services, telecommunications services and audio and video services.
- Land and air transport services.
- Printing and publishing services.
- Commercial agents’ services.
- Medical retail such as private pharmacies.
- Blood banks, venom and quarantine centres.
Should you wish to explore your options of restructuring your business or to have a copy of the entire list of the 122 activities, please get in touch with one of our lawyers.