Restrictions on Foreign Ownership of UAE Companies reviewed

In recent years countries in the Gulf Cooperation Council (GCC) region, including the United Arab Emirates, have seen a marked increase in foreign direct investment (FDI). The most important factors determining success in attracting FDI, apart from geopolitical risk considerations, are countries' economic fundamentals and the attractiveness of their business environments. In order to address these issues, Gulf countries have:

• reduced the number of industry sectors closed to foreign investors;
• increased the share of foreign ownership in certain sectors; and
• allowed 100% foreign ownership of residential property and other real estate in select areas.

As far as the United Arab Emirates is concerned, the World Bank has identified that the country's statutory requirement for a UAE national partner acts as an impediment to higher levels of investment. In 2006 the World Trade Organization, of which the United Arab Emirates formally became a member on April 10 1996, made recommendations for the United Arab Emirates to allow greater foreign investment in UAE companies outside the free zones.

This article was originally edited by, and first published on, www.internationallawoffice.com - the Official Online Media Partner to the International Bar Association, an International Online Media Partner to the Association of Corporate Counsel and European Online Media Partner to the European Company Lawyers Association.