[co-author: Dinmukhamed Eshanov, Counsel]

On 23 September 2018, the President of the U.A.E., His Highness Sheikh Khalifa bin Zayed Al Nahyan, issued Federal Law by Decree No. 19 of 2018 Regarding Foreign Direct Investment (“New FDI Law”), which went into force in November upon its publication in the U.A.E. Official Gazette. The New FDI Law is the latest in a number of policies implemented to liberalize domestic markets and increase the U.A.E.’s competitiveness globally. By loosening existing regulations of onshore companies, the New FDI Law strives to enhance the investment climate in the U.A.E. and to attract additional foreign investment in certain specified business sectors to be tentatively identified in early 2019 (“Positive List”).

The Positive List will align with U.A.E. Vision 2021 policy, as well as the country’s overall innovation strategy, potentially attracting companies in Positive List industries, who otherwise would have incorporated in a free zone, to invest onshore in the U.A.E. The Ministry of Economy has established a new Foreign Direct Investment Committee (“Committee”) and this Committee will issue the Positive List. In addition, the Ministry of Economy has established a Foreign Direct Investment Unit (“Unit”), which together with the Committee is expected to administer the New FDI Law and related activities.