UAE Federal Law on Foreign Direct Investment 2020

UAE FDI Law 2020 update

UAE Federal Law on Foreign Direct Investment : Grants the foreign investor an ownership up to 100% as well as incentives & competitive advantages

Scope of Application

The provisions of the law apply to : foreign direct investment projects l to be established in all lands of the country

The provisions of the law don’t apply on the financial and non-financial free zones

Benefits and Guarantees

No expropriation Ensuring the property is not expropriated except for public benefit in exchange for fair compensation.

Not to seize or confiscate project funds unless by a court hearing

The licensed foreign investment companies are treated like national companies

Make financial transfers for project returns outside the country

Ensuring the confidentiality of technical, economic and financial information and investment initiatives

  • The right to use real estate
  • 100% Ownership

Additional privileges: 
Insert a partner or a number of partners  • Transfer ownership to a new investor • Amending the articles of association • Change the legal form of the company • Merger, acquisition or liquidation

The maximum period for the approval of the FDI license application for sectors within the positive list is 5 working days only

The foreign investor shall apply for approval of the project license to the Competent Authority for foreign direct investment in the local government to be considered, satisfying the conditions and documents specified by the Licensing Authority and after obtaining the preliminary approval from the Licensing Authority.

The Competent Authority shall issue its approval of the license application within a maximum period of 5 working days from the date of submission of the application and fulfilment of all required conditions, documents and procedures.

UAE Federal Law on Foreign Direct Investment

Steps for Licensing an FDI Project specified under the Positive List

  1. Select Business Activity in Positive List and Legal Form (Limited Liability Company (LLC), Private Joint Stock Company)
  2. The FDI capital shall not be less than the minimum required in the Positive list including
  3. Submit a foreign direct investment license application after obtaining the initial approval
  4. Reserve the Trade Name The name shall be followed by an indication of the legal form of the company and then the expression “Foreign Direct Investment (FDI)”
  5. Get Approvals of Entities concerned with FDI Company Activity
  6. Present Proof of Submission for Joining Tawteen Partners Club
  7. Obtain Approval and Receive FDI License After Paying the Fees
  8. Opening a Bank Account on behalf of the company (under incorporation) and depositing at least %20 of the capital
  9. Registration of the license with the Ministry of Economy (MOE)

Existing company’s change into an FDI company

The existing company may change into an FDI company provided that the following is provided:

  • The legal form of the existing company shall be one of the forms specified for FDI Companies.
  • If the legal form of the existing company is different from those forms specified for the FDI Companies

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

  • The foreign investor shall submit the application for approval of the project licence to the Competent Authority of Foreign Direct Investment, which has the right to not approve the application, or to submit the request to the FDI Committee for consideration, after coordination with the licensing Authority, and after consultation with the local government In the concerned Emirate.
  • If the request is submitted to the FDI Committee for consideration, the Committee’s recommendation shall be submitted to the UAE Cabinet. In the event of a decision by the UAE Cabinet approving the request, the investor shall be notified through the Competent Authority upon completing the necessary data and documents.
  • The competent authority may, in the event of a decision of the Council of Ministers approving the request, notify the applicant of the completion of what it deems necessary to provide data, information and documents, and the competent authority shall issue approval of the license with in (5) working days from the date of meeting the required documents and procedures.
  • The decision of the Competent Authority to reject the license request char is not included in the positive list is final, and not subject to appeal.

Steps for the Change of an Existing Company to an FDI Company

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