«Economy»: Foreign Investment Law will not affect the foreigners' shares in existing public companies

The Ministry of Economy affirmed that the Foreign Direct Investment Law aims to attract new foreign investments to the economic sectors and targeted activities in the country, stressing that saying that the Foreign Investment Law will allow raising the share of foreign investors and shareholders in public shareholding companies in the country does not proceed from a correct reading of the reality of ownership. Foreign investors in listed companies in the financial markets, the state's business environment, the details of the investment law.

Legislative framework

The Ministry of Economy confirmed that Federal Law Decree No. (19) of 2018, on FDI in the UAE, represents an integrated legislative framework for the liberalization of a select group of economic activities in front of foreign investment flows, and attracting them more towards some vital economic sectors in the country in a percentage owned by foreigners. It may reach 100%, to correct the situation of foreign investors in the country, and enhance their confidence in local markets.

The ministry said in a statement yesterday that the law represents a new starting point to push national efforts to build a global competitive economy based on knowledge and innovation, by providing the frameworks to increase the attraction of foreign investment, and to support the business climate in the country, especially the specific investments related to innovation, technology and various sectors This is reflected in the first positive list which identified 122 activities in a number of key sectors.

Foreign ownership

The ministry pointed out that some press reports and media statements of private sector officials, which argued that the availability of foreign ownership by up to 100% in some sectors, under the law, will have a wide impact in enhancing the entry of foreign investors in the stock markets of the country, and increase their shares In listed public shareholding companies, statements are lacking in accuracy and objectivity, and will affect investment decisions in the stock market, and the attitudes of investors, especially individuals.

According to the Companies Law, which allows foreign shareholders to own a 49% stake in the company, according to the Memorandum of Association, the ceiling does not reach that ceiling, or even half of it. In many listed companies, therefore, to say that the Foreign Investment Law will allow raising the share of foreign investors and shareholders in public shareholding companies in the country, does not proceed from a correct reading of the reality of ownership of foreign investors in companies listed on financial markets, the business environment in the country, as well as to the details The law of exponents Fruits, because the lifting of foreign ownership stakes in these companies was not mainly dependent on the editing sectors. »

The Ministry of Economy stressed that the law aims to attract new foreign investments to the economic sectors and targeted activities in the country, and open wider prospects for the business climate for investors and foreign capital from various regional and global markets.

Despite the expected development returns on the economy of the country as a whole and on FDI flows as a result of the application of the law, the reports and statements dealing with this subject should be thoroughly investigated, especially as some of these reports referred to sectors not included in the positive list, hence They will not be affected by the liberalization of sectors.