UAE foreign ownership plan hits the rocks

UAE foreign ownership plan hits the rocks
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Published February 14th, 2013 - 09:40 GMT via SyndiGate.info

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Plans to allow foreign ownership of businesses in the UAE has hit the rocks after a government plan was rejected
Plans to allow foreign ownership of businesses in the UAE has hit the rocks after a government plan was rejected
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Reuters
,
Sultan bin Saeed Al-Mansouri
,
Ahmed Al-Zaabi
,
Federal National Council

A government body in the UAE has rejected draft legislation that would have eased tight controls on foreign ownership of companies, with members citing security fears and threats to local businesses.

The Federal National Council (FNC) is reviewing the draft of a new companies law that would update legislation dating back to 1984.

At present, foreign firms can, generally, only operate in the UAE outside so-called "free zones" by partnering with a local entity in which they can only hold minority stakes.

The council rejected a clause in the draft law that would have given the UAE cabinet the power to let foreign parties own stakes of up to 100 percent in companies outside the free zones.

"This situation is very bad. These clauses are completely contradictory and could lead to foreign investments being outside the control of the state and its supervision, and this, in turn, could lead to destabilization of security," FNC deputy Ahmed Al-Zaabi told the assembly.

Economy Minister Sultan bin Saeed Al-Mansouri, who debated the law with deputies in yesterday session, said it had been agreed that the clause on foreign ownership would now be included in a draft foreign investment law being prepared.

"What we have decided is to move this clause to the foreign investment law because it is much more suitable, and to review some of the terms and conditions that will be applied," he said, according to Reuters. "They (FNC deputies) wanted more details," he said.

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Copyright: Arab News © 2013 All rights reserved.

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