UAE Federal Law on Foreign Direct Investment

Lavin Nalinababu, Business Consultancy

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The UAE government had come up with a landmark initiative last year, allowing complete ownership to foreign investors. Along with 100 percent ownership, the law also grants many incentives & competitive advantages. It is not applicable to financial and non-financial free zones.

Benefits and Guarantees 

  • The property won’t be confiscated unless it is for public benefit and with a fair compensation.
  • Project funds won’t be seized without a court hearing.
  • The licensed foreign investment firms will be treated like national firms
  • Financial transfers can be made for project returns outside UAE.
  • Technical, economic and financial information and investment initiatives will remain confidential.
  • The right to use real estate.

Additional privileges

  • A single or numerous partners can be involved.
  • Ownership can be transferred to a new investor.
  • Changes can be made to the articles of association.
  • The legal form of the organization can be changed.
  • Can carry out merger, acquisition or liquidation.

Steps involved in licensing an FDI Project (from positive list)

  1. Choose the business activity of the firm
  2. Once you receive the initial approval, a foreign direct investment license application should be submitted.
  3. Reserve the trade name. An indication of the legal form of the company and the expression ‘Foreign Direct Investment (FDI)’ must follow the name of the company.
  4. Obtain approvals from authorities concerned
  5. Submit proof of submission to join Tawteen Partners Club
  6. Pay the fee and get approval and FDI license
  7. Start a bank account on behalf of the company and deposit minimum 20 percent of the capital.

The FDI capital should not be less than the specified minimum capital value.

Procedures for approving a project license application that is not specified under the positive list

  • The investor need to submit the application for approval of the project license to the competent authority of foreign direct investment. The authority will submit the request to the FDI committee for consideration, which might approve or reject the application. The licensing authority and the local government in the concerned emirate will be involved in the process.
  • Once the request is submitted to the FDI committee, the committee will submit a recommendation to the UAE cabinet. If the cabinet approves the request, the same will be notified to the investor via the competent authority. The investor needs to provide certain data, information and documents once the request is approved.
  • The competent authority will issue approval of the license with in five working days from the date of meeting the required documents and procedures.
  • If the competent authority rejects the license request, the decision will be final and not subject to appeal.

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Mohamed Sheriff
Mohamed Sheriff
16:16 28 Jun 20
Experience with HLB Hamt in audit experience is great pleasure. They deploy well qualified accounts team for audits.... And the amount of checking they perform give the management of the company confidence that internal controls are well in place. We are glad to see they have high standard of audit practices.read more
218141 JOSEPH THOMAS
218141 JOSEPH THOMAS
16:20 23 Jun 20
Professionally managed firm with commitment to the engagements taken. My company and its group are assigning our... requirements for last 12 years to HLB and we don’t have any negative remarks on any assignments.read more
PMI
PMI
07:14 23 Jun 20
In my opinion, HLB Hamt is one of the best professional firms in UAE after big4. Excellent client service, professional... and competent staff and timely delivery are their strength. Over the years they have developed the infrastructure and skill set to handle multiple verticals ie, audit, tax services, consulting, IT support etc.Wishing HLB Hamt team all the very best.read more
RAVI CHOKSI
RAVI CHOKSI
08:28 21 Jun 20
Thank you Team HLB hamt...Your internal auditing team put the good amount of time and inputs in helping the... organisation making considerable improvements throughout the organisational working structure and helps in building the better business.Thanks.read more
Maharajan Subramaniam
Maharajan Subramaniam
18:17 06 Jun 20
High-Performing IT Teams, I'm impressed with the knowledge level of their deputed staff, audit procedures, and... checklist adopted. Mr. Vimal especially understand the requirement and provide solution not only technical feasibility and also considered budgeting. We’re confident in their abilities.read more
Mohammed L
Mohammed L
08:07 05 Jun 20
We have been working closely with them on payroll services for quite sometime.They provide very professional... services,experts in domain and excellent support. Would recommend them.Cheers.read more
ROY ROSHAN VIVIAN
ROY ROSHAN VIVIAN
06:32 04 Jun 20
Very professional team. Vimal has always given us good solution advice for various Software and IT Infra projects. We... are very Extremely satisfied working with him and his team. Wishing them success.read more
Basil Daniells
Basil Daniells
05:55 03 Jun 20
I have worked with HLB as a partner of Sage for about 2 years, they were dedicated to the success of the partnership... and kept aligned with the business plan that was agreed between our two companies. They are always ready to go the extra mile for a customer and don’t shy away from challenging circumstances. Keep up the good work and wish you all the success in the future.read more
Amar Kashyap
Amar Kashyap
19:28 02 Jun 20
Team of well qualified and organised professionals. Their reports are not based on numbers first they will understand... their client and their business. They are highly recommended and trust worthy.read more
Radz de Jesus
Radz de Jesus
16:03 02 Jun 20
We're glad to have found HLB Hamt to conduct the IT audit and risk assessment for our organization. We have learned a... lot from their team during that first project. And since then, we've continued to be in touch with them. Mr. Vimal especially is very good at presenting technical concepts in simple yet interesting ways that non-IT and business people alike would easily catch. We are very happy with the professionalism and quality of service they provide. They leave their clients nothing short of satisfied. Highly recommended.read more
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