investment and foreign direct ownership in the uae
- Author- Ridhi
- Publish Date-
Let us first discuss what's meant by Investment and foreign direct ownership. FDI means it has the business owner's control that is an entity based of one country towards the other country. The field of sectors that are taken care of by the FDI is the exploitation of quarry and mining, activities related to real estate, manufacturing sectors, services involving insurance and finance, and finally retail and wholesale trading. In UAE there are many investors from different countries like the USA, UK, Austria, Kuwait, France, Japan, and a few more. The main goal of the FDI is to improve the environment for investment, diversification, and expansion of base for production, etc. if the investor is a foreigner then they can only have a company share of 49 percent and the remaining 51 percentage of shares will be owned by the UAE partners. There are a few more added advantages available like guaranteed investment protection, facilities required for financial transfers, ownership transfer, etc.
There is a need for maintaining the required amount of shared capital allotted for each specific activity involving FDI. The few developments and improvements like the usage of modern technology, bringing high-value standards, contribution towards development and research, and finally, the licensing requirements need fulfilling. The Ministry of Economy there is a unit called foreign direct investment that takes the duty of making an environment attractive for FDI. It explains in detail about policies available in FDI. It also has complete information and data about the investment happening in FDI.
The FDI committee is also available that takes the responsibility of maintaining the economy and activities involved in FDI. A positive list is a name given to the list of activities and a negative list is a name given for the list that contains businesses that have restricted FDI.
The positive list contains the ownership of 100 percentage activities. The few fields or sectors that are involved in the FDI positive list are health care, transportation activities, agriculture, the manufacturing sector, and the sectors that involve servicing. The negative list is the activities that have restricted FDI. A few of those activities are petroleum production, sectors involving investigations, clothing, etc. The activities involve finance, banking, payment, and insurance.
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FDI in different Emirates:
The government of Abu Dhabi helps in supporting the investment in FDI. It provides a wide range of opportunities that helps both foreign and domestic investor in having priorities. The investment office of Abu Dhabi provides separate programs for both sectors involving public and private.
The Dubai FDI helps in offering support in providing the required information for foreign companies who are willing to invest in FDI. It provides guidance, and practical and personal assistance, and stays as an advisor in the management and business decision-making process. It helps in determining the best structure or strategy that helps in identifying the best legal option for investment.
The FDI of Sharjah involves promoting diverse opportunities for investment that also makes knowing the complete insights of the investment-related process related to business activities.
Foreign direct investment types:
1. The first type will be the horizontal FDI that helps the home country-based activities maintain the steady change stage value.
2. The next will be the vertical FDI that helps in having different change stage values moving downstream and upstream.
3. The final one would be the platform FDI that creates a way for direct investment between the source and destination country.
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Procedures of licensing:
1. Choose the activity that is legal in the FDI positive list.
2. Have the minimum requirement that is essential for the FDI capital.
3. The next step would be the submission of a license application for foreign direct investment.
4. Select a name for the trade selected that is legal and following that it should contain the name foreign direct investment.
5. The next step will be getting approvals for the activities involved in foreign direct investment and ownership.
6. Proof of submission need for presentation and get the license.
7. Pay the required fee and gain the approval and license for foreign direct investment.
8. The next step involves creating a bank account with a minimum of 20 percent of the capital amount in the company’s name.
9. The final step will be getting registered with the license from the ministry of economy. These are the steps followed to get a license.
FDI helps to create new and innovative technologies for economic development. The capital of capital such as short-term, long-term, and equitable is called direct foreign investment. Due to population growth, there is a need for economic growth. This helps to create more jobs and creates new business strategies. It also helps to reduce or avoid competition between competitors.
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This was all about investment and foreign direct ownership in the UAE. For any Emiratesvisa-related query visit Emirates Visa .