Positive List – FDI Law of 2018 – UNITED ARAB EMIRATES

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FDI Law of 2018 – UNITED ARAB OF EMIRATES

In line with the new Foreign Direct Investment (“FDI”) law, Federal Decree-Law No. (19) of 2018 (“FDI Law of 2018”) enacted on September 2018 the much-awaited positive list was introduced and approved on 02 July 2019 in Cabinet meeting in Abu Dhabi by the Vice President and Prime Minister of UAE.

The positive list covers 19 activities in agriculture sector, 51 activities in manufacturing sector and 52 activities in service sector. The positive list also highlights various criterion, like minimum capital requirement, use of advanced and latest technology and participating in Tawteen Club at Ministry of Human Resources & Emiratization to be complied with to allow maximum of 100% foreign ownership in mainland UAE. Some of the activities included in the positive list are as under:

  • computer programming and consultancy, 
  • renting and leasing of machinery and equipment, 
  • Construction of buildings, 
  • pre-primary, secondary and higher education, 
  • hospital, 
  • packaging,
  • restaurant and hotel management, and
  • commercial ships rental.

It is further clarified that local governments in each Emirates will determine the percentage of ownership in each activity. In certain emirates, some activities could still require an Emirati shareholder, even if the foreign ownership threshold increases.

The introduction of FDI law is an effective tool to increase foreign investments in the UAE. According to the Ministry of Economy the FDI Law of 2018 could accelerate FDI flows by up to 20 percent this year. The FDI Law is a perfect launch pad, as UAE is moving towards the EXPO 2020 opening in October 2020. In this VUCA world, UAE appears to always stay a step ahead of its competition. 

HOW WE CAN HELP?

We have provided the Positive and Negative Lists (as published) below for your ready reference.

  • PKF can review your license and advise whether your activities are covered in the positive list;
  • PKF can assist you with drafting of the necessary information and preparing documents for making a preliminary submission to the FDI authorities; and
  • Discuss and follow up with the FDI authorities till the final approval is obtained.

Disclaimer:

This document has been prepared as a general guide. It is not substitute for professional advice. Neither PKF UAE nor its partners or employees accept any responsibility for loss or damage incurred as a result of acting or refraining from acting upon anything contained in or omitted from this document 

PKF UAE is a member firm of the PKF International Ltd family of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member or correspondent firm or firms

POSITIVE LIST (AS PUBLISHED)

Agriculture Sector

19 main and sub-main activities 

Manufacturing Sector

51 main and sub-main activities 

Services Sector

52 main and sub-main activities 

Total

122 main and sub-main activities 

AGRICULTURE SECTOR

#

Reference

Sectors and Activities

Minimum Capital

AED Million

National Cadres and Training

Controls and conditions

1

01111

Seeds Cultivation (Wheat, Corn, Barley, etc…)

7.5

To participate in the Tawteen Partners Club at MOHRE

  • Use of latest technology in the production process
  • Achieve high added value
  • Contribute to the field of scientific research and development,
  • Meet the requirements of the licensing authorities in the country

2

01112

Growing of leguminous crops

7.5

3

0113

Growing of vegetables and melons, roots and tubers

7.5

4

0114

Growing of sugar cane

7.5

5

0116

Growing of fibre crops

7.5

6

0119001

Flowers and Buds Cultivation

7.5

7

0121

Growing of grapes

7.5

8

0123001

Fruits and Citrus Cultivation

7.5

9

0124

Growing of pome fruits and stone fruits

7.5

10

0125

Growing of other trees and bush fruits and nuts

7.5

11

0126

Growing of oleaginous fruits

7.5

12

0127

Growing of beverage crops

7.5

13

01289

Growing of aromatic, drug and pharmaceutical crops

7.5

14

0161

Support activities for crop production

7.5

15

0162

Support activities for animal production

7.5

16

0163

Post-harvest crop activities

7.5

17

0164

Seed processing for propagation

7.5

18

0210

Silviculture and other forestry activities

7.5

19

0240

Support services to forestry

7.5

MANUFACTURING SECTOR

#

Reference

Sectors and Activities

Minimum Capital

AED Million

National Cadres and Training

Controls and conditions

20

10

Manufacture of food products (except)

(1071) Manufacture of bakery products

(105) Manufacture of dairy products

(108) Manufacture of prepared animal feeds

15

To participate in the Tawteen Partners Club at MOHRE

  • Use of latest technology in the production process
  • Achieve high added value
  • Contribute to the field of scientific research and development,
  • Meet the requirements of the licensing authorities in the country

21

11

Manufacture of beverages (except)

(1101) Distilling, rectifying and blending of
spirits

(1102) Manufacture of wines

(1103) Manufacture of malt liquors and malt

15

22

14

Manufacture of wearing apparel

(14109) Tailoring and Sewing of Wearing Apparel

(1410122) Military Garments Manufacturing

15

23

15

Manufacture of leather and related
products

15

24

16

Manufacture of wood and of products of wood and cork, except
furniture; manufacture of articles of
straw and plaiting materials

15

25

2012002

Straight or Complex Fertilizers
Manufacturing

15

26

2013

Manufacture of plastics and synthetic rubber in primary forms

15

27

2021

Manufacture of pesticides and other
agrochemical products

15

28

2022

Manufacture of paints, varnishes and
similar coatings, printing ink and

mastics

15

29

2023

Manufacture of soap and detergents, 

cleaning and polishing preparations,
perfumes and toilet preparations

15

30

2029006

Glues and Prepared Adhesives
Manufacturing

15

31

2029008

Manufacture of dyestuffs and pigments

15

32

2029009

Textiles and Leather Finishing Used
Chemical Materials Manufacturing

15

33

2029013

Manufacture of photographic plates,
films

15

34

2029019

Gelatine and Its Derivatives
Manufacturing

15

35

2029021

Essential Oils Manufacturing (Essence)

15

    

36

2029022

Extracted Natural Aromatic Products
Manufacturing

15

37

2029023

Aromatic Distilled Waters Manufacturing

15

38

2029024

Matches Manufacturing

15

39

2029025

Welding Powders and Pastes
Manufacturing

15

40

2030

Manufacture of man-made fibres

15

41

2100

Manufacture of pharmaceuticals,
medicinal chemical and botanical
products

15

42

22

Manufacture of rubber and plastics
products

15

43

23

Manufacture of other non-metallic
mineral products

15

44

24

Manufacture of basic metals (except) 

(242) Manufacture of basic precious and other non-ferrous metals

(2432) Casting of non-ferrous metals

20

45

25

Manufacture of fabricated metal
products, except machinery and
equipment (except)

(252) Manufacture of weapons and ammunition

15

46

26

Manufacture of computer, electronic and
optical products

15

47

27

Manufacture of electrical equipment

20

48

28

Manufacture of machinery and
equipment not elsewhere classified (except)

(28259) Tobacco Products Machinery Manufacturing

100

49

29

Manufacture of motor vehicles, trailers and semi-trailers

100

50

3011101

Building of Commercial Vessels

100

51

3011103

Ships and Floating Structures Sections Manufacturing

100

52

3011905

Construction of Drilling Platforms,
Floating or Submersible

100

53

3011906

Construction of Floating Structures

100

54

3011907

Building of Hovercraft

100

55

3012

Building of pleasure and sporting boats

15

56

3020

Manufacture of railway locomotives and rolling stock

20

57

3030

Manufacture of air and spacecraft and
related machinery (except) 

(3030006) Military Ballistic and Guided Missiles Manufacturing

100

58

3090

Manufacture of transport equipment not elsewhere classified

20

59

31

Manufacture of furniture

15

60

3220

Manufacture of musical instruments

2

61

3230

Manufacture of sports goods

3

62

3240

Manufacture of games and toys

3

63

3250

Manufacture of medical and dental instruments and supplies

20

64

3290

Other manufacturing not elsewhere classified

3

65

3312001

Repair and maintenance of trains
engines

15

66

3312002

Repair and maintenance of engines ship

15

67

3315001

Repair and maintenance of ships

15

68

3315004

Repair and maintenance of trains and
railway equipment

15

69

3315005

Aircraft Engine and Part Repair & overhaul

15

70

3315006

Light aircraft maintenance & repair

15

SERVICES SECTOR

#

Reference

Sectors and Activities

Minimum Capital

AED Million

National Cadres and Training

Controls and conditions

71

6910002

Legal Consultancy Offices

According to regulations in force

(Provided that no to appear in UAE Courts, conduct before official authorities or carrying out authentication duties). And to obtain approval of the concerned parties in the state

To participate in the Tawteen Partners Club at MOHRE

72

692

Accounting, bookkeeping and auditing activities; tax consultancy

According to regulations in force

Only tax planning for businesses, consulting and preparation and review of tax on business are permitted

73

711

Architectural and engineering activities
and related technical consultancy

According to regulations in force

 

74

862

Medical and dental practice activities

75

75

Veterinary activities

76

620

Computer programming, consultancy and related activities

According to regulations in force

Provide technical team not less 5 programming specialists by the end of the first year of the company 

77

72

Scientific research and development

According to regulations in force

 

78

7730-77300

Renting and leasing of other machinery,
equipment and tangible goods

79

471

Retail l sale in non-specialized stores

(4711001)

100

 

80

731

Advertising

According to regulations in force

 

81

732

Market research and public opinion
polling

82

702

Management consultancy activities

83

712

Technical testing and analysis

84

331

Repair of fabricated metal products,
machinery and equipment

85

8121-81210

General cleaning of buildings

86

742

Photographic activities

87

8292-82920

Packaging activities

88

823

Organization of conventions and trade
shows

89

741

Specialized design activities

90

7490005

Legal Translation Services

91

7490006

Translation services, movies and
television programs

92

7490012

Translation Publications Services

93

8299002

Translation Services

94

41

Construction of buildings

According to regulations in force

Only large-scale infrastructure projects such as airports, highways and sport facilities exceeding AED 450 Million are permitted

95

42

Civil engineering

96

432

Electrical, plumbing and other
construction installation activities

97

433

Building completion and finishing

98

431

Demolition and site preparation

99

439

Other specialized construction activities

100

7730009

Construction and Building or Demolition
Machines and Equipment Renting

101

851

Pre-primary and primary education

According to regulations in force

102

852

Secondary education

103

853

Higher education

104

854

Other education

105

370

Sewerage

 

106

382

Waste treatment and disposal

 

107

3900001

Pollution Consequences Treatment and Environment Protection

 

108

861

Hospital activities

100

Subject to approval of the concerned parties based on economic needs tests that consider the number of hospitals, medical and health centres in specific area. The economic needs tests are not required in Dubai Healthcare City (DHC)

109

869

Other human health activities

70

 
110 8211001 Hotel Management According to regulations in force  
111 8211004 Restaurants Management Only theatre activities, live bands activities and circus services activities are permitted
112 90009 Creative activities and presentation of arts drama (theatre)
113 9000104 Music Band  
114 9000110 Circus
115 8130002 landscape and gardening services
116 9103-91030 Botanical and zoological gardens and nature reserves activities Only public parks services and parks services are permitted
117 5012-50120 Sea and coastal freight water transport  
118 5022001 Internal Water Transportation of Goods
119 7730016 Commercial Ships Rental
120 5222002 Ship Piloting and Towing
121 5222007 Marine towing of boats and jet ski
122 New Activities of holding companies related to intellectual property

NEGATIVE LIST

Sectors restricted from 100 per cent foreign ownership appear on a ‘negative list’.

They include:

  1. Oil exploration and production
  2. Investigation, security, military (including manufacturing of military weapons, explosives, dress, and equipment)
  3. Banking and financing activities
  4. Insurance
  5. Pilgrimage and Umrah services
  6. Certain recruitment activities
  7. Water and electricity provision
  8. Fishing and related services
  9. Post, telecommunication and other audio-visual services
  10. Road and air transport
  11. Printing and publishing
  12. Commercial agency
  13. Medical retail (including pharmacies)
  14. Blood banks, quarantines and venom/poison banks

Note: The Ministry reserves the right to amend the list as per its discretion