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Foreign Direct Investment Industry Sectors confirmed in the UAE

09 July 2019
The United Arab Emirates ("UAE") has defined the industry sectors that are eligible for up to 100% foreign ownership after having passed the Foreign Direct Investment Law. With approval received from The Cabinet of the United Arab Emirates, more commonly referred to as the Council of Ministers (the "Cabinet"), investment from across various industries looks set to spark the accelerating UAE economy amidst Expo 2020.

Relaxation of Direct Investment

By introducing the Foreign Direct Investment Law (Federal Law No.19 of 2018) (the "FDI Law"), the UAE took an important step late last year by relaxing the rules restricting foreign ownership of UAE companies.

The FDI Law came into force on 30 October 2018 (the day it was gazetted) and follows much discussion and speculation in the market about the potential liberalisation of the UAE's foreign ownership restrictions under the UAE Commercial Companies Law (Federal Law No. 2 of 2015), which limit a foreign shareholder to holding a maximum of 49% of the shares in an onshore UAE company.

The new FDI Law provides a framework for the Cabinet to permit foreign shareholders to own up to 100% of companies in certain designated sectors.

The approved sectors were approved as of the 3 July 2019.


List of Approved Sectors

In a meeting chaired by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, the Cabinet announced that 122 economic activities across 13 sectors are to be eligible for up to 100% foreign ownership ("Positive List").

These sectors include:

  • Renewable energy;
  • Space;
  • Agriculture;
  • Manufacturing;
  • Transport and storage;
  • Hospitality and food;
  • Information and communications;
  • Administrative services;
  • Support services;
  • Educational activities;
  • Healthcare;
  • Art and entertainment; and
  • Construction.


The Cabinet's decision will support the investment environment which the UAE is encouraging, with competitiveness being a key element which the UAE considers essential to making the country a global investment hub, whilst also providing further growth for local vital sectors.

International investors will be provided with new economic opportunities to explore the UAE market. These opportunities can include hybrid power plants and green technology, logistics and supply chain, advancement in biotechnology, research laboratories and e-commerce.

The Cabinet will give local governments discretion to decide on the percentage of foreign ownership for each sector / activity.

"Our goal is to stimulate, facilitate and activate business, open and expand new economic sectors, attract new investors and talents, and enhance global competitiveness of our national economy" Sheikh Mohammed tweeted.

The positive list follows a period of sustained legislative development in the UAE. For example, the Ghadan 21 strategy earlier in the year has formed part of a wide-ranging AED 50 billion investment and reform programme. The programme runs from 2019 to 2021 with government-backed loans for SMEs, a licensing regime that can allow many sectors to begin trading immediately, and slashing energy bills for businesses of up to 40%, amongst others.

This follows the Gulf Corporation Council (the "GCC") opening up the doors to foreign investment across the region. The UAE is on course to demonstrate its initiatives to the world during Expo 2020 with a view to achieving the objectives of UAE Vision 2021. Globally, the UAE has established its role as a global business hub with coordination with its international allies by passing the Economic Substance Regulations, particularly at a time of global and political uncertainty.



While the UAE has provided a Positive List, there is also a list of economic activities that shall not be permitted any increased levels of foreign ownership ("Negative List"). The Negative List includes:

  • Oil exploration and production;
  • Investigation, security, military (including manufacturing of military weapons, explosives, dress, and equipment);
  • Banking and financing activities;
  • Insurance Pilgrimage and Umrah services;
  • Certain recruitment activities Water and electricity provision;
  • Fishing and related services;
  • Post, telecommunication and other audio visual services;
  • Road and air transport;
  • Printing and publishing;
  • Commercial agency;
  • Medical retail (including pharmacies); and
  • Blood banks, quarantines and venom/poison banks.

As investors and clients consider how best to manage their finances, the DWF (Middle East) LLP Corporate team is best placed to advise and assist on the changes and investment opportunities.


Please contact Kayaan Unwalla or the corporate team at DWF for further information.

Further Reading