UAE announces ownership, visa reforms to lure foreign investors

File photo showing Sheikh Mohammed bin Rashed Al-Maktoum, Vice President and Prime Minister of the UAE (Reuters)
Updated 21 May 2018

UAE announces ownership, visa reforms to lure foreign investors

  • The UAE has announced plans to permit full ownership and visa incentives to foreigners, hoping to attract investors and innovators.
  • The decision will allow foreign investors 100 percent ownership of companies, coupled with 10-year residence permits for them and their families.

DUBAI/ABU DHABI: The UAE’s decision to relax foreign ownership restrictions on local companies and grant longer visas will benefit the country’s economy and attract higher foreign direct investment, according to analysts, especially in the local real estate sector. 
The landmark policy change may prompt other Gulf countries to follow suit as the region drives non-oil growth. 
“Approval for 100 percent business ownership outside of free zones is a welcome development, which enhances the FDI potential of the UAE,” said Ayub Ansari, senior analyst at SICO Bank in Bahrain.
“This, in addition to longer term visas should incentivize expats to invest more within the UAE, making expat deposits more sticky.”
The state-run news agency WAM announced on May 20 that overseas investors would be allowed to own up to 100 percent of UAE-based companies by the end of the year. 
Currently foreigners can only own up to 49 percent unless a company, is based in one of the UAE’s free zones. 
The government also said it would allow long-term visas for up to 10 years for investors and specialists working in medical, scientific, research and technical sectors, as well as their dependents, according to WAM. 
“(We) await the fine print on the decision for a more meaningful assessment of the impact on the economy,” said Ansari. 
Foreign investment in the UAE represents a relatively low proportion of GDP, said Zahabia Gupta, associate, sovereign and international public finance ratings at S&P Global.
“For the UAE as a whole, foreign direct investment inflows currently comprise less than 3 percent of GDP. 
“Allowing foreign investors to own 100 percent of companies should help attract higher investment into the UAE and could facilitate the transfer of technologies and skills to UAE companies from their foreign owners,” she said. 
She added that the policy could drive growth in non-oil sectors such as retail, trade, and manufacturing. 
The decision to grant longer-term visas is forecast to impact the local real estate sector in particular. It has languished in recent years thanks to increasing supply and sluggish economic conditions. 
The visa move “will surely boost the performance of the real estate sector and give comfort to the investors there and especially property owners,” Marie Salem, director of capital markets at FFA Dubai, told Reuters. 
Shares in Emaar Properties, the UAE’s largest listed real estate devloper, rose 2.9 percent yesterday to their highest level in nearly two weeks. 
The rest of the Gulf region is likely to follow the UAE’s lead in relaxing rules around foreign ownership in an effort to encourage greater foreign investment, said Gupta. 
“Other GCC countries, including Saudi Arabia and Qatar, are also implementing or planning to implement similar measures,” she said. 
“We believe that this will, over the medium term and in conjunction with other business-friendly regulations, support the governments’ efforts to gradually diversify Gulf economies away from their dependence on hydrocarbons.”
The UAE and Saudi Arabia both introduced value-added tax at the start of this year with the aim of creating a new source of non-oil government revenue. 
A report by rating agency Moody’s Investors Service, published yesterday, warned that the UAE’s main credit challenge remains its “fiscal reliance on hydrocarbons.”
Oil revenue represented 42 percent of total government revenue in 2017, compared to 70 percent in 2014, according to the report. 
The price of oil — which fell below $30 per barrel in early 2016 — has recovered to around $80 per barrel, thanks to an agreement led by Saudi Arabia and Russia to curb production, which has coincided with an increase in global demand. 

Uri Avnery, who shocked Israel by meeting Yasser Arafat, dies aged 94

Updated 1 min 37 sec ago

Uri Avnery, who shocked Israel by meeting Yasser Arafat, dies aged 94

  • The peace activist dedicated his life to an agreement that included a Palestinian state alongside Israel
  • Tributes pour in for the former Knesset member , who was also an Arab News columnist

LONDON: Uri Avnery, a peace activist who became the first prominent Israeli to meet in public with Yasser Arafat, died on Monday aged 94.

Avnery, who was an Arab News columnist until 2016, met the Palestinian leader in 1982 during Israel’s invasion of Lebanon and war with the Palestine Liberation Organization (PLO).

He crossed into west Beirut from the Israeli-held east to meet Arafat, sparking controversy back home. 

It was the first time Arafat had met with an Israeli, and from this perspective, it could be called a “historic meeting,” Avnery wrote in Israel’s Haaretz newspaper in February.

Palestinian President Mahmoud Abbas Monday described Avnery was an “icon of real and permanent peace” in the region, the Palestinian WAFA news agency reported.

“He was one of the first to have strongly endorsed the establishment of the independent Palestinian state and called for ending the Israeli occupation,” Abbas said. 

A backbone of Israel’s peace movement, Avnery never lost hope an agreement could be reached with the Palestinians.

He pushed since the end of the first Arab-Israeli war, for the creation of a Palestinian state alongside Israel as a means to bring peace.

Writing in Arab News in 2016 about the increasing levels of hatred between Israelis and Palestinians, Avnery said: “I am convinced that it is in the vital interest of Israel to make peace with the Palestinian people, and with the Arab world at large, before this dangerous infection engulfs the entire Arab, and Muslim world.”

Born in September 1923 in Beckum, Germany as Helmut Ostermann, Avnery emigrated to British-mandate Palestine with his family at the age of 10, fleeing Nazism.

Before becoming a prominent peace activist, he was a soldier and even part of a right-wing militia that fought both British and Arab forces.

He had no regrets about belonging to the group. “I fought for the freedom of my people against the British occupiers,” he said. “For the same reasons, I always thought that the Palestinians were entitled to their independence and freedom.”

In 1950, he founded an independent weekly magazine, Haolam Hazeh, which he edited for 40 years.

He started a political movement in 1965 and was elected to Israel’s parliament where he served eight years.

In 1979 he was voted in as part of a different movement and spent two more years in the Knesset before resigning.

His meeting with Arafat took place after he travelled to Lebanon at the invitation of the Israeli military as part of a reporting trip. It lasted about two hours and “dealt entirely with the possibility of peace between Israel and the Palestinian people,” he wrote.

It was broadcast the same night on Israeli television and Avnery was questioned by police but faced no charges.

In 2003, during the Palestinian uprising, Avnery traveled with other Israeli activists to Arafat's headquarters in the occupied West Bank, to act as a human shield against what they said were Israeli plans to assassinate Arafat after a Palestinian suicide bombing.

Avnery wrote that working to prevent such an act was “the most patriotic thing” to do at that time since killing Arafat would have been a disaster for Israel.

In Israel, politicians across the political spectrum paid tribute to his work. 

Arab politician Ayman Odeh called him “a dear man who dedicated his life to peace.”

Foreign Minister Tzipi Livni described him as “a courageous journalist and rare, trailblazing man.”

He maintained “his principles despite attacks and planted in the heart of Israelis ideas of peace and moderation, even when they weren't in the lexicon,” she said.

President Reuven Rivlin said that his fundamental disagreements with Avnery “were diminished in light of the ambition to build a free and strong society here.”

Avnery had been admitted to Ichilov more than a week ago after suffering from a stroke.