Middle East Focus – May 2019
- FDI surge in Dubai driven by high-tech and innovative businesses
- Abu Dhabi permits foreigners to own freehold properties in investment areas
- UAE/Saudi Arabia double tax treaty comes into force
FDI surge in Dubai driven by high-tech and innovative businesses
Dubai attracted 41% more foreign direct investment (FDI) in 2018 than in 2017 and emerged as the leading city globally in the ‘Top FDI Performers 2018′, survey published by the Financial Times’ fDi Intelligence magazine. fDi Intelligence said that Dubai dominated its rankings throughout 2018 with the most appearances in the league tables, followed by London, Paris, Dublin and Singapore.
According to the annual Dubai FDI Results & Rankings Report compiled by the Dubai Investment Development Agency (Dubai FDI), FDI capital flows into Dubai reached AED38.5 billion (USD10.48 billion) in 2018, a 41% increase on 2017, propelling the emirate to the top of the rankings among FDI destinations in the Middle East and North Africa region and improving its global country ranking from tenth place to sixth.
Abu Dhabi permits foreigners to own freehold properties in investment areas
The Abu Dhabi government issued a law on 17 April to amend its real estate law to permit all foreigners to own land and property in designated investment areas on a freehold basis. Previously, freehold ownership was restricted to Emiratis and citizens of Gulf Cooperation Council (GCC) states, while foreign investors were generally restricted to 99-year leases.
Law No. 19 of 2005 provided for the creation of investment areas as zones within Abu Dhabi in which GCC and non-UAE/GCC nationals were entitled to real property rights, but specifically excluded ownership rights to land for foreigners.
UAE/Saudi Arabia double tax treaty comes into force
The income and capital tax treaty between the United Arab Emirates (UAE) and Saudi Arabia (KSA) came into force on 1 April, following the completion of ratification by both treaty partners. It will apply from 1 January 2020.
Signed on 23 May 2018, it is the first double tax treaty between two members of the Gulf Cooperation Council (GCC) and is expected to facilitate further cross-border trade and investment between the two countries.
The treaty provides for the elimination of double taxation by way of a credit against tax payable in the UAE and KSA, except against Zakat payable in KSA). KSA and UAE resident individuals and companies have access to the treaty. Foreign national individuals who are resident in the UAE or KSA may also benefit under the treaty.
