Commentary | Al Suwaidi & Company

Key trends and recent developments in the UAE business and legal landscape suggest continued growth in commercial opportunities for investors and corporates looking to enter and expand in the UAE.

In 2018, the UAE Cabinet passed a landmark decision allowing 100% foreign ownership of companies onshore. This marks a major change from the current regime, where foreigners must seek a local partner to set up and serve the onshore market and where the only alternative for 100% foreign ownership is with one of the UAE’s many free zones. With the recently passed Foreign Direct Investment (FDI) Law of 2018, 100% foreign ownership shall be allowed across 13 sectors and 122 economic activities within them.

We expect international investors to start preparations to identify relevant opportunities across the 13 sectors opened to 100% foreign ownership.

Along with the announcement of 100% foreign ownership in selected sectors, the UAE has also launched long-term residence visa programmes that aim to attract international talent into the UAE, such as entrepreneurs, investors, scientists and special talents. In addition to the above-mentioned 10-year UAE residence visa, investors who invest in a property in UAE can apply for a 5-year UAE residency visa, as can entrepreneurs who have secured a project within the UAE approved by an accredited business incubator.

As the UAE positions itself at the forefront of innovation and adoption of leading-edge technologies globally, it is worth highlighting specific initiatives and regulatory developments made by the UAE government to promote the transition of the UAE economy into one that is more digitally enabled and ready to adapt to the future.

The Dubai Land Department (DLD) is one UAE government agency that is leading in the push for innovation and rollout of seamless and efficient customer experiences through digital solutions. The DLD has rolled out blockchain technology to automate and optimise real estate business processes end-to-end. The DLD is employing blockchain across three initiatives: Ownership Verification, Property Sale by the Developer and Smart Leasing. Through the blockchain platform, DLD aims to improve the provision of services, effectiveness of collaboration among all parties involved in the real estate market and an enhanced security for real estate properties conducted digitally.

The DLD has also launched several digital applications to facilitate real estate transactions and processes across multiple stakeholders.

The UAE’s push on the international front as well is driving further economic growth as the UAE seeks to play a vital role in China’s Belt and Road Initiative. Recent visits by President Xi Jinping to the UAE last year and His Highness Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces to China resulted in a series of agreements that will surely propel the UAE further ahead in its economic agenda.

The UAE’s efforts to facilitate business and trade, to make starting and operating from the country easier on investors, are gaining recognition globally. The World Bank, in its Doing Business 2019 report, has elevated the UAE by 10 notches to 11th best in the world for doing business and #1 in the Middle East and North Africa (MENA) region. This ranking puts the UAE as the leader in the Arab world and the broader MENA region for the sixth consecutive year. The UAE’s focus on nurturing entrepreneurs and turning the UAE into the region’s start-up hub, has significantly pushed its ranking into the top 20 of the global rankings.

Construction and preparations are progressing on schedule for the organisers and exhibitors for Expo 2020 in Dubai that starts in October of next year. The Expo is expected to bring in tourists, businesses and investors to the UAE, which will have a cross-sectoral impact for the UAE economy. With the theme of “Connecting Minds, Creating the Future”, the Expo is expected to generate increased interest into the UAE and further promote its position as the place to do business in to address opportunities in the GCC, MENA and beyond.

No UAE outlook will be complete without touching upon the real estate and construction sector. While real estate prices and rents have decreased significantly from their peaks, it is worth mentioning that the construction sector in UAE showed growth in 2019 and is projected to continue in 2020. The growth rate of Dubai’s construction continued to trend upward in 2019 at a rate of 54%, with Expo 2020 driving the growth. Construction projects value hit AED 3 trillion in June 2019, with further growth and activity to continue beyond 2030.

Continued steady growth by the UAE economy, coupled with forward-looking legal and regulatory changes made by the UAE government ensure that the UAE remains the MENA region’s leader for doing business. The opportunities on offer, either through the acceleration of technology and digital initiatives or landmark international events, all add up and position the UAE as an attractive destination for investors and businesses. Interested investors, businessmen and highly skilled individuals have several options to establish themselves in the UAE and benefit from the opportunities on offer, aided by first-class infrastructure and an environment most conducive for doing business in the region, with world-class legal support available when required. n