UAE investment law to apply selectively, won’t hurt locals -officials

A picture taken on March 14, 2018 shows the skyline of Dubai with the Burj Al-Arab (R) in the foreground and Burj Khalifa (L) in the background. (AFP)
Updated 08 October 2018

UAE investment law to apply selectively, won’t hurt locals -officials

DUBAI: A new law allowing 100 percent foreign ownership of companies in the United Arab Emirates will only apply to some sectors of the economy, limiting the risk that it could disrupt existing business, Dubai investment officials told Reuters.
The UAE cabinet, chaired by Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum, said in May that it would permit 100 percent foreign ownership of some UAE-based businesses, up from the current 49 percent limit, by the end of 2018.
Few details of the law have been revealed so far. But Raed Safadi, chief economic adviser at Dubai’s Department of Economic Development, said on Monday that it would only apply to “strategic sectors” of the economy.
This means it will not damage the interests of UAE citizens who currently benefit from acting as silent partners in foreign-invested businesses, Safadi said.
In fact, the new law will create opportunities for UAE citizens because “they have a lot to offer in terms of knowledge of local markets, the networks and the connectivity,” he added.
Fahad Al-Gergawi, chief executive of the Dubai Investment Development Agency, said: “We are not targeting the sleeping partners’ businesses, because these are small businesses. We are targeting strategic, impactful businesses which will leave their fingerprints on the economy and create a meaningful impact on jobs, technology, and boost imports and exports.”
Special business areas in Dubai known as “free zones,” which already permit 100 percent foreign ownership, could also be affected by the new law, because they will lose one of their unique advantages.
Safadi said, however, that Dubai’s free zones had unique business models which made them individually attractive, and that they were adjusting to “structural pressures” presented by the new law.
Ahmed Bin Sulayem, executive chairman of the Dubai Multi Commodities Center, a free zone focused on commodities trade, said free zones were diverse enough to cope with the law.
“You are looking at a big market, representing over 15,000 businesses, and almost 100,000 people live and work there...People go there not just for the 100 percent ownership and the tax-free facilities that we provide; they go there to be connected to the market, to not miss out,” he said.
Foreign direct investment commitments to Dubai rose 26 percent from a year earlier to $4.84 billion in the first half of 2018, according to official data.


Huawei's third-quarter revenue jumps 27% as smartphone sales surge

Updated 16 October 2019

Huawei's third-quarter revenue jumps 27% as smartphone sales surge

  • American companies, significantly disrupting its ability to source key parts
  • Huawei was all but banned by the United States in May from doing business with American companies

SHENZHEN, SHANGHAI: Huawei Technologies Co. Ltd’s third-quarter revenue jumped 27%, driven by a surge in shipments of smartphones launched before a trade blacklisting by the United States expected to hammer its business.
Huawei, the world’s biggest maker of telecom network equipment and the No. 2 manufacturer of smartphones, was all but banned by the United States in May from doing business with American companies, significantly disrupting its ability to source key parts.
The company has been granted a reprieve until November, meaning it will lose access to some technology next month. Huawei has so far mainly sold smartphones that were launched before the ban.
Its newest Mate 30 smartphone — which lacks access to a licensed version of Google’s Android operating system — started sales last month.
Huawei in August said the curbs would hurt less than initially feared, but could still push its smartphone unit’s revenue lower by about $10 billion this year.
The tech giant did not break down third-quarter figures but said on Wednesday revenue for the first three quarters of the year grew 24.4% to 610.8 billion yuan.
Revenue in the quarter ended Sept. 30 rose to 165.29 billion yuan ($23.28 billion) according to Reuters calculations based on previous statements from Huawei.
“Huawei’s overseas shipments bounced back quickly in the third quarter although they are yet to return to pre-US ban levels,” said Nicole Peng, vice president for mobility at consultancy Canalys.
“The Q3 result is truly impressive given the tremendous pressure the company is facing. But it is worth noting that strong shipments were driven by devices launched pre-US ban, and the long-term outlook is still dim,” she added.
The company said it has shipped 185 million smartphones so far this year. Based on the company’s previous statements and estimates from market research firm Strategy Analytics, that indicates a 29% surge in third-quarter smartphone shipments.
Still, growth in the third quarter slowed from the 39% increase the company reported in the first quarter. Huawei did not break out figures for the second quarter either, but has said revenue rose 23.2% in the first half of the year.
“Our continued strong performance in Q3 shows our customers’ trust in Huawei, our technology and services, despite the actions and unfounded allegations against us by some national governments,” Huawei spokesman Joe Kelly told Reuters.
The US government alleges Huawei is a national security risk as its equipment could be used by Beijing to spy. Huawei has repeatedly denied its products pose a security threat.
The company, which is now trying to reduce its reliance on foreign technology, said last month that it has started making 5G base stations without US components.
It is also developing its own mobile operating system as the curbs cut its access to Google’s Android operating system, though analysts are skeptical that Huawei’s Harmony system is yet a viable alternative.
Still, promotions and patriotic purchases have driven Huawei’s smartphone sales in China — surging by a nearly a third compared to a record high in the June quarter — helping it more than offset a shipments slump in the global market.