Committee to decide on UAE industries open to full foreign ownership

Foreigners are set to be allowed to own up to 100 percent of onshore UAE companies following a directive announced this week. (Shutterstock)
Updated 24 May 2018
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Committee to decide on UAE industries open to full foreign ownership

  • Committee of representatives from UAE's seven emirates to decide on which industries are open to 100 percent foreign ownership.
  • Undersecretary for foreign trade & industry tells Bloomberg that new law's goal “is to attract quality investments and expertise and isn’t necessarily about the size or number of investments.”

LONDON: The UAE’s new law enabling foreigners to own 100 percent of onshore companies will be limited to specific industries deemed essential to the country’s economy, according to a senior government official.
Abdulla Al-Saleh, undersecretary for foreign trade & industry at the UAE’s Ministry of Economy, told Bloomberg that a final decision had not been taken on what industries to include in this week’s landmark decision to allow foreigners to fully own non-free zone companies.
Al-Saleh said a committee — made up of representatives of the country’s seven emirates — would make a decision on which industries to initially include, and would add further industries and companies in the future.
The law’s goal “is to attract quality investments and expertise and isn’t necessarily about the size or number of investments,” he said in a telephone interview with Bloomberg.
The UAE’s Prime Minister and Ruler of Dubai Sheikh Mohammed bin Rashid Al-Maktoum said the ownership changes — as well as longer visas for selected students and selected professions — would be put implemented by the end of the year.
The move to extend foreign ownership has been welcomed by economists, even as key details have yet to be announced.
“The eligibility and the extensiveness of the investment liberalization will be critical to gauge the support to the economy,” Monica Malik, the chief economist at Abu Dhabi Commercial Bank, told Arab News on Thursday.
“Recent official comments indicated that the area of focus will likely be on factors such as job creation and technology transfer.”
Such a theme is in keeping with the UAE’s move to allow visas for up to 10 years for specialists working in medical, scientific, research and technical sectors, alongside 5-year student visas and 10-year visas for “exceptional” students.
Longer visa terms are predicted to especially impact the local real estate sector, which has languished in recent years thanks to increasing supply and sluggish economic conditions.


Relief for UK buyers as consumer prices drop more than expected

Updated 21 min 22 sec ago
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Relief for UK buyers as consumer prices drop more than expected

  • Consumer prices rose at an annual rate of 2.4 percent, more than reversing August’s jump to a six-month high of 2.7 percent
  • The figures are likely to reassure Bank of England officials

LONDON: British inflation fell more than expected in September to a three-month low, offering some relief to consumers who have been squeezed financially since the Brexit vote.
Consumer prices rose at an annual rate of 2.4 percent, more than reversing August’s jump to a six-month high of 2.7 percent, the Office for National Statistics said.
That was well below the consensus forecast of 2.6 percent in a Reuters poll of economists.
Sterling fell against the dollar and euro while British government bond prices rose.
The figures are likely to reassure Bank of England officials who forecast in August that inflation would average around 2.5 percent over the July-September quarter.
“Coupled with the gradual up-tick in wages, the slowing rise in prices will deliver a boost to consumers’ real take-home pay packets, which will also be welcome news for retailers,” said Tej Parikh, senior economist at the Institute of Directors.
“The Bank of England will be unruffled by this week’s data releases, and remains unlikely to budge on interest rates as it continues to monitor the impact of Brexit developments.” The BoE expects it will need to raise interest rates gradually in response to rising wages, assuming Britain manages to strike a deal with the European Union to smooth its exit from the bloc.
On Tuesday, the ONS said the basic wages of workers had risen at their fastest pace in nearly a decade over the summer months.
But wage growth of 3.1 percent remains meagre by historical standards when adjusted for inflation.
The BoE expects inflation to drift down but stay just above its 2 percent target in two years’ time as it gradually raises borrowing costs.
Consumer price inflation hit a five-year high of 3.1 percent in November, when the inflationary effect of the pound’s tumble after the Brexit vote in June 2016 reached its peak.
The ONS said food prices, particularly of meat and chocolate, represented the biggest drag on September’s inflation rate.
Ferry prices dropped from a “surprisingly high” summer peak.
Still, there could be more short-term pressure in the pipeline for consumer prices.
For manufacturers, the cost of raw materials — many of them imported — was 10.3 percent higher than in September 2017, up from a revised 9.4 percent in August.
That was a bigger jump than any economist had forecast in the Reuters poll, which anticipated a rise of 9.2 percent.
Manufacturers increased the prices they charged by 3.1 percent compared with 2.9 percent in August, again stronger than all forecasts in the poll, which had pointed to a 2.9 percent increase.
The ONS said house prices in August rose by an annual 3.2 percent across the UK as a whole, the smallest rise since August 2013 and compared with a 3.4 percent increase in July.
Prices in London alone slipped 0.2 percent.