Sheikh Mohammed Bin Rashid Al Maktoum, vice-president and prime minister of the UAE and ruler of Dubai, announced the decision after chairing Monday’s meeting.
The UAE is seeking to pull itself out of the economic doldrums with a new initiative that will strengthen foreign ownership and residency rights of expats.
Earlier in the week the cabinet approved a plan to allow 100 per cent ownership of UAE based companies to international investors and agreed to grant residency visas of up to ten years “for investors & professionals (doctors, engineers, etc.) and their families in addition to grade ‘A’ students”.
“At today’s Cabinet meeting, we decided to allow 100% foreign ownership of companies in UAE, with a 10 year visa for investors, scientists, doctors, engineers, entrepreneurs and innovators. The UAE has always welcomed, and always will, innovators and business leaders,” he wrote on Twitter.
At today's Cabinet meeting, we decided to allow 100% foreign ownership of companies in UAE, with a 10 year visa for investors,scientists, doctors, engineers, entrepreneurs and innovators.
The UAE has always welcomed, and always will, innovators and business leaders pic.twitter.com/N93MqK89Rp
— HH Sheikh Mohammed (@HHShkMohd) May 20, 2018
The oil rich monarchies are hoping to attract greater foreign investment to boost the country’s economy, which has stagnated after oil prices collapsed in 2014. According to the Financial Times, Abu Dhabi’s economy shrunk last year, while Dubai grew by less than three per cent- compared with an annual rate of almost 20 per cent a decade ago.
The UAE, like many of its Gulf neighbours, had traditionally been very strict over granting control to foreigners. The law only allowed foreigner investors to own no more than 49 per cent of a company.
While details are yet to be finalised, it’s expected 100 per cent ownership will be granted in most sectors without the need for a local partner.
It appears that the resistance usually seen from local businesses, when similar reforms were touted in the past, were not enough to derail the initiative this time. Gulf leaders are realising that they need to make drastic changes, including by opening up their countries to foreign investment and granting rights to non-Gulf residents is one of the things they must do in order to boost the economies.