Changes to UAE enterprise law will travel foreign investment, business leaders say
The changes to ownership regulations being introduced over the UAE have obtained a warm welcome from the business enterprise community, who believe it'll facilitate doing business in the country and attract foreign investment.
The reforms to companies' law are wide-ranging, but it may be the removal of the necessity for an area sponsor for companies that operate onshore that's seen as the biggest potential fillip for investment flows in to the country.
“This is a fantastic move. For corporations that do have sponsors it'll reduce their operating costs and create a far more competitive environment, it will boost the quantity of onshore companies opening up,” said Amro Nahas, managing director at alternative asset supervisor Ritz Banc Group.
Will Seivewright, brain of corporate at lawyer DLA Piper said the adjustments by the federal government are “a huge step of progress along a course that the UAE has been taking a period of time, but this degree of rapid change will have a significant effect on the market".
"It creates the UAE that much more attractive as a vacation spot for FDI."
The removal of the necessity for an area sponsor gives entrepreneurs a greater sense of control over their own destiny, said Wadih Haddad, founder of self-storage company The Box.
"I speak a lot at conferences, and sometimes when someone talked if you ask me and found about the need for an area sponsor, the discussion would end there," Mr Haddad said.
It is also more likely to provide an overall demand boost for commercial real estate, which includes witnessed a handful of difficult years because the decline in oil prices which began in 2014.
"The modification is significant, but shouldn't be viewed in isolation," stated Sachin Kerur, Middle East brain of lawyer Reed Smith.
“It is obviously portion of a package of legislative reforms targeted at ensuring the UAE retains its location as the leading hub for regional and international organization," he added.
Scott Livermore, chief economist at Oxford Economics Middle East, said checking the economy further “is another exemplory case of the UAE embracing the contribution that foreigners could make to the restoration and diversification of the market, and is regular with the recent revamping of visa restrictions and laws applied to residents."
The combined recent measures by the Abu Dhabi and Dubai governments should stimulate an inflow of capital and talent to the UAE, which bodes well for the recovery and long run growth prospects, he added.
“It’s taken a good pandemic to push above the line but the UAE, and Dubai specifically, offers been actively deregulating this year,” Tarek Fadlallah, chief executive of Nomura Asset Administration in the Middle East, said.
Although you will see some consolidation of work place by companies which may have both an onshore and offshore presence, it is likely to spur demand for buildings onshore, said Taimur Khan, head of exploration at Knight Frank Middle East.
The fact that establishing an onshore business is now easier and less expensive "will encourage home based business formation”, he said.
"This is a thing that is very great from an FDI point of view as it removes many barriers and allows shareholders to have total control of their business," said George Hojege, leader of Virtugroup, a enterprise formations business for both onshore and no cost zone companies.
He argued, even so, that it's "a misconception" that persons only use no cost zones to get 100 per cent foreign ownership.
"Free zones have significantly more advantages, such as zero duty on importing and exporting," he added.
The new changes will be a boon to technology and developing companies that want to use independently in the UAE, said Mr Nahas.
Overall, he said your choice by the federal government "might energise the business enterprise sector and bring momentum to it found in the 3 to 5 a long time. Small and medium-sized businesses will benefit the most as it will certainly reduce their operating cost and offer them with more capital to financing their growth."
Source: www.thenationalnews.com
