(MENAFN- Khaleej Times) The UAE is in an advanced phase of drafting a new federal law on foreign direct investment, or FDI, that would allow 100 per cent foreign ownership in some activities and sectors outside free zones, Economy Minister Sultan bin Saeed Al Mansouri said.
In his keynote address at the Annual Investment Meet, or AIM, that opened on Monday at the Dubai International Convention and Exhibition Centre, Al Mansouri said the UAE government is committed to removing bureaucratic hurdles that face foreign investors.
"The government aims to shape the country into not just one of the most competitive economies in the region but one of the most competitive economies globally," he said.
At present, foreign companies operating in the UAE must be majority-owned (51 per cent) by a UAE citizen. Firms wanting to retain full ownership must operate in one of the UAE's many free zones. The minister said the UAE underscored its position as the one of the most attractive destinations for foreign capital in the world by recording a 25 per cent surge in foreign direct investments that exceeded $13 billion in 2014.
"FDIs play an important role in our economic achievements. The UAE has been able to assume a leading position as an attractive destination for foreign investments. We ranked first among Arab countries and 22nd globally in the Global Investment Index for 2015. The total volume of foreign investments exceeded $100 billion," he said. In 2013, FDI in the UAE rose nine per cent to $10.5 billion, according to the United Nations Conference on Trade and Development. Al Mansouri pointed out that a key aim of the UAE Vision 2021 and national agenda is to achieve foreign investment flows of five per cent of the gross national product, or GNP.
"We are also keen to ensure that the UAE ranks first in the global index for ease of doing business, and is among the top10 countries worldwide in the Global Competiveness Index," he said.
He said while the UAE, which has set its target to reduce the dependence on oil revenue to less than 10 per cent of GNP in the upcoming years, is seen a distinctive and attractive investment environment by all foreign investors, the country continuously work to advance and improve the investment climate.
"Our ultimate aim is to provide an enabling investment environment supported by progressive legislations and laws."
He said there are currently a number of federal laws being developed such as the Companies Law and Commercial Arbitration Law. The Ministry of Economy has also recently launched the Corporate Governance Guide.
He said the national economy has made great strides over the years, "with the UAE recording unprecedented growth, which can be attributed primarily to the successful economic policies. This has led to economic diversification and sustainable development across sectors. The UAE GDP increased more than 236-fold from Dh6.5 billion in 1971, the year of the formation of the federation, to Dh1.54 trillion by the end of 2014."
"While oil used to count for more than 90 per cent of GNP in the 1970s, it gives me great pride to share with you today, that the contribution of non-oil sectors to the GNP has increased to register 69 per cent at the end of 2014.Oil today accounts for less than a third of the GNP."
"Petroleum and natural gas exports still play an important role in our national economy. However, our continued efforts for the diversification of the UAE economy are slowly but surely paying off," the minister said.
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