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