The Potential Impact Of The 2020 Uae Fdi Decree And Side Agreements
Source of Publication
Icsid Review-Foreign Investment Law Journal
The United Arab Emirates (UAE) has assumed a leading role in attracting foreign investments in the region through the implementation of the Foreign Direct Investment Law of 2018 (FDI Law). The goal of the FDI Law is to create a pathway and framework that would enable 100 percent foreign ownership of UAE limited liability companies beyond the allowed 49 percent cap in mainland UAE. The efforts have been bolstered by the latest FDI Decree that offers full foreign ownership to businesses in the UAE, except 'strategic impact' activities. Therefore, the purpose of this article is to explore the potential impact of the FDI Decree on inflows of foreign investments into the UAE. The article also examines the persisting question about the legal validity and enforceability of side agreements. Preliminary findings have shown that the FDI Decree is a significant step towards the liberation and modernization of the UAE foreign investment landscape. The new regime will certainly spur inbound flows of foreign investments into the UAE. However, it is still too early to ascertain the extent of the Decree in encouraging greater foreign investment and ultimately diversifying the UAE economy. Additionally, concerns over the legal validity and enforceability of side agreements will persist under the new regime pending the release of the Strategic Impact List. A major issue is the uncertainty surrounding the proactive implementation of the Anti-Fronting Law, which prohibits side agreements with UAE nationals. The future of the Anti-Fronting Law is critical, considering that limiting or prohibiting side agreements will undermine the UAE's quest for liberalization and modernization. Foreign investors must now develop future-proofing actions to take advantage of the new law. Ultimately, foreign investors will have the final word after the full implementation of the FDI Decree.
Oxford University Press (OUP)
Business | Law
Na'el Al-Tawil, Tareq; Prabhakar Gantasala, Venugopal; and Ibraheem, Walaaeldeen, "The Potential Impact Of The 2020 Uae Fdi Decree And Side Agreements" (2022). All Works. 5148.
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