FDI in figures

UAE is the primary recipient of direct foreign investments in the Arabian peninsular. The main investors in the UAE are Great Britain, Japan and India. Although the FDI flow increased in 2007, it decreased in 2008 and mostly in 2009. This trend will extend into the coming years. The advantages the Emirates have are an easy access to oil resources, low energy costs, willingness to diversify the economy and high purchasing power. The country's main weakness is the small size of its domestic market.

Why you should choose to invest in the United Arab Emirates

Strong points

The strengths of the country are:
- Not directly taxing corporations (apart from oil, banking and insurance sectors) and individuals;
- absence of exchange control or of any constraint relating to repatriation of funds;
- a solid and profitable banking sector and favourable regulations for foreign investments;
- The geographical situation of the country makes it a potential platform to influence the whole of the Gulf, Iran, Asia and Middle-East;
- Lastly, the country has a cheap foreign labour force, very good transport and production infrastructures (financed by hydrocarbon income) and an access to low cost energy.

Weak points

There are legal obstacles for foreign investments. Effectively, the interdiction (except for free zone) of more than 49% of shareholding of a local company for a foreign investor constitutes a significant hindrance. Moreover, the obligation for recourse to a local service agent for the branches and representative offices of foreign companies represents a limit.

Government measures to motivate or restrict FDI

The government announced a certain number of measures, for example removal of the obligation of the capital holding of 51% by a national or even the opening of banking and insurance sectors for foreign investors. Till now not much progress has been made. However you can notice the flexibility of rules of access to real estate property for foreigners in Emirates of Dubai, Sharjah and Abu Dhabi.

Bilateral investment conventions signed by the United Arab Emirates

UAE has signed 32 bilateral agreements on investment. See the list of countries provided by the UNCTAD.

Procedures relative to foreign investment

Freedom of establishment

It is limited since it is mandatory to have a local agent for creating an establishment in the UAE and that the foreign shareholding in this company cannot exceed 49%.

Acquisition of holdings

The majority capital acquisition of a local company is limited to 49%.

Obligation to declare

There is no special obligation for declaration. Foreign capital in a company can anyway be more than 49% except for free zone.

Competent organization for the declaration

World Association of Investment Promotion Agencies

Requests for specific authorizations

In the sector of banking, insurance, health, maritime transport, education, media, and telecommunications, specific authorisations are required by the concerned Ministries.

Finding assistance for further information

Investment aid agency

Abu Dhabi Investement Authority

Other useful resources

Emirates Free Zone, directory of the free zones with a presentation of UAE.