coverimage
World News

Increasing foreign ownership will move investors beyond UAE free zones

date

03-Jul-2019

Dubai: Allowing majority foreign ownership in 13 sectors — and covering 122 lines of business — could relieve the pressure on foreign businesses and investors to set up their operations within free zones. The ecommerce and high-value logistics services could be the immediate beneficiaries from such a transition, as would the entertainment sector.
 
This will remove the need for foreign businesses to take a free zone license to have full or majority ownership in ventures such as operating an online shopping portal or a web TV streaming service, for instance.
 
Industry sources say even “Old Economy” activities like manufacturing and construction would derive benefits from full foreign ownership. And at some point, even trading — which is what the UAE economy was initially built on — could come under the umbrella.
 
“The changes on full foreign ownership needn’t be only on new investments — I think it will apply even to those businesses already existing with retrospective effect,” said Paras Shahdadpuri, Chairman of Nikai Group. “Even with the recent visa reforms, it wasn’t just for new arrivals — they started with those who were already here for years.
 
 
“The latest change will not put existing business owners and foreign investors at a disadvantage. Everyone will get to benefit.”
 
As many as 13 sectors now come under the changes, but brick-and-mortar retail is not part of it, even though ecommerce is. So, unless a full review of the Agency Law is made, foreign investors/partners can only have stakes of up to 49 per cent. (Even then, some of the biggest retail brands have stretched the possibilities of what can be done, by winning exemptions to have 100 per cent owned retail facilities. For instance, Tesla operates without a dealership.)
 
Ecommerce and entertainment the big winners
 
It is interesting that the UAE Cabinet has included entertainment as one of the sectors. But it highlights the fact that possibilities in the entertainment space will continue to be a prime focus of foreign investors.
 
“It needn’t be just owning a cinema or multiplex operation — the entertainment tag could just as easily be applied to theme parks or other destinations,” said Sandeep Ganediwalla of RedSeer Consulting. “It’s a space that’s always likely to be of interest to foreign-owned international operators … provided they have a direct say in the business.
 
“The changes in ownership will reduce the cost of starting new companies — it is good that the UAE is not adopting a protectionist mindset even when the economy is not booming.”
 
Construction sector can build on foreign support
 
The region’s construction sector had in the recent past seen some of the bigger international operators vacating the scene. Notable names include UK’s Carillion and Balfour Beatty.
 
But construction sector sources say a market like the UAE’s would always generate overseas interest. “It essentially frees up the mindset when they know that full ownership is possible,” said Vinod Pillai, General Manager at RP Group, which has extensive interests in the construction and real estate sector. “But I think allowing full or majority ownership will be taken up on a case-by-case basis.
 
“Those approving foreign ownership requests will obviously go with promoters’ track record overseas, the level of finance commitments they intend to bring in, etc. It won’t be a case of anyone can come in.”
 

More Related News

Jonathan Roxmouth on how he gets into the mindset (and prosthetics) of an iconic role

..

16-Oct-2019

He was incredibly loved by many students, parents and school staff

..

16-Oct-2019

The UAE-based businesswoman thought of the concept as a remedy to stress

..

16-Oct-2019

Leaders head meeting of officials responsible for economic cooperation between UAE, Russia

..

16-Oct-2019

Emirates Delivers to allow customers to shop online from US retailers

..

16-Oct-2019

Messages could be removed or demoted for egregious conduct violating terms of service

..

16-Oct-2019

The Instagram star will attempt to host the largest HIIT Class this October

..

15-Oct-2019

Emirates ordered 150 777X jets, including 777-8 variants, in 2013

..

15-Oct-2019

Russian president on Middle East tour, will visit UAE Tuesday

..

15-Oct-2019

Trade negotiations also ended in protest over Ankara’s offensive into Syria

..

15-Oct-2019


Related Links_


Google ADS

Other Info_

..

Health Care

Multi Specialty medical facilities, government hospitals & private clinics

..

Education

Nurseries, Kindergardens, Schools, Colleges, Universities & Higher Education

..

Popular Restaurants

Dining in Dubai - selection of restaurants where you can relax & enjoy a variety of cuisines of choice

Jobs at Dubai_

Find latest Dubai Jobs & Vacancies from placement agencies, employers & recruitment consultants in Dubai, Abu Dhabi & other Emirates in UAE.

Dubai Tours & Packages_

Book quality Dubai tours, best Dubai holiday packages with visas & Dubai hotel booking with special offers & discounts

Warnning

Unsupported Browser

This website includes CSS elements that your browser does not support. Please upgrade your browser to a current version, then come back and try again.

Upgrade your Browser for more experience

Chrome Firefox Safari Edge