Month: September 2019

The UAE legislators have initiated the fundamental step for implementing UAE Federal Law Number 19 of 2018 on Foreign Direct Investment (FDI Law). The FDI Law introduces a framework for the UAE Cabinet to permit foreign shareholders to own up to 100 percent of onshore UAE companies in certain designated sectors. On July 2, 2019, the UAE Cabinet met and subsequently approved the sectors and economic activities eligible for up to 100 percent foreign ownership.

This represents a significant milestone in the UAE’s efforts to attract and retain more foreign direct investment (FDI) and diversify its economy by permitting foreign investors to incorporate and hold more than 49 percent of the shares in the capital of companies operating in certain sectors of the economy, without needing to partner with a UAE national.

A timely but measured response to demand
The World Investment Report 2018 issued by the United Nations Conference on Trade and Development (UNCTAD) highlighted the UAE’s competitive advantage as an attractive hub for investors from across the globe. This report showcased the UAE’s leading ability to attract FDI. FDI in the UAE reached a total of $10.4bn in 2018, in part due to rising cross-border M&A, ranking the UAE first amongst Arab countries and 27th globally (up from 30th in 2017). Also, the UAE’s share of FDI in 2018 accounted for 36 percent of the total FDIs flowing to the group of Arab countries as a bloc.

The UAE’s Foreign Direct Investment Committee (FDIC) is the sole governmental body which can legally propose to the UAE Cabinet the list of eligible commercial activities and the economic sectors in which greater levels (i.e. over 49 percent) of FDI will be permitted (Positive List).

Following the FDIC’s second meeting after the implementation of the FDI Law which took effect on September 24, 2018, the UAE Cabinet has now subsequently issued the hugely anticipated Positive List.

The Positive List
The Positive List covers a total of 122 economic activity groups, encompassing over 900 activities across 13 sectors, including, but not limited to, the agricultural, manufacturing, renewable energy and space sectors, which would be eligible for up to 100 percent foreign ownership. Further, the FDI Law provides the FDIC with powers to regularly update the Positive List and so the Positive List may be amended to encompass additional activities in due course.

An in-depth examination of the initial declared sectors and activities reflects the UAE’s focus on attracting investments in specific areas that are considered key to the realisation of its vision and strategic plans, in light of the ongoing governmental efforts to position the UAE as the regional hub in such sectors.

By excluding, at least to date, sectors that might be considered as saturated such as real estate and retail, the UAE Cabinet’s choice of sectors appears to be driven by industries that can support the UAE’s plans to promote innovation and knowledge transfer, attract international expertise, create new job opportunities and training for national cadres and strengthen and sustain the economy in accordance with international best practices.

Minimum capital requirements
The Positive List specifies certain requirements for entities which are the subject of an application for an increased level of foreign ownership, including minimum capital requirements ranging from AED7.5m ($2.04m) to AED10m ($2.72m) for the majority of the agriculture-related activities and between AED2m ($544,000) to AED100m ($27.22m) for manufacturing related activities included in the Positive List.

The UAE Cabinet’s resolution provides each emirate with the authority to determine the cap on an increase in the ownership percentage of foreign investors above 49 percent for activities included in the Positive List. This flexibility provides each emirate with a degree of discretion in deciding the appropriate level of foreign ownership in accordance with its respective needs and local economic interests.

What does this mean for FDI in the UAE going forward?
This may theoretically result in varying foreign ownership thresholds for the same sectors across different emirates in the absence of a uniform requirement to harmonise foreign ownership levels across the UAE.

Could this have an impact on the flow of FDI across the UAE and potentially result in the various emirates competing in order to attract investments, reflecting the needs and economic interests of each of the seven emirates? Also, how will this impact the existing free zones currently operating in the UAE as foreign investors become drawn into the appeal of establishing a majority or wholly owned onshore entity, notwithstanding the other benefits of operating in a free zone (i.e. duty free imports).

Whilst the answer to these questions will unfold over the coming months, it is widely acknowledged that the relaxation of the UAE’s foreign ownership restrictions is likely to incentivise foreign businesses through (i) establishing a presence onshore and, in turn, attracting new players into the mainland market or (ii) restructuring their existing shareholding arrangements to own a controlling majority, or even the entire issued share capital, in an onshore entity.

At Dentons, some of our clients are already exploring the implications of these developments which marks a significant milestone towards the UAE achieving its economic vision.

Source:https://www.arabianbusiness.com/comment/428504-from-legislation-to-implementation

Dubai will host a number of fireworks events and concerts for Saudi Arabia’s 89th National Day, officials have announced.

At the Point on the Palm Jumeirah, a three-minute fireworks show will begin at 8:30 PM on September 23, with dining deals and children’s activities available until the end of the day.

Other fireworks events will take place at 8:30 PM at Bluewaters Island and at 9 PM at The Beach, JBR.

Additionally, Dubai Mall will host two concerts showcasing emerging talent the kingdom. The first concert, featuring artists Ismail Mubarak and Ramy Abdallah, will take place on Sunday (September 22) between 7 Pm and 10 PM.

The second concert, featuring Fouad Abdelwahad, will take place on Monday (September 23) between 7 PM and 10 PM.

Saudi visitors at Dubai International Airport will also be met with decorations, messages and Saudi national songs upon their arrival, as well as Arabic coffee, chocolates, scarves and children’s badges.

Source:https://www.arabianbusiness.com/travel-hospitality/428506-dubai-plans-fireworks-concerts-for-saudi-national-day

Visitors to the UAE will now have the option of choosing to carry out dynamic currency conversion of their cash withdrawals when using their Visa card at any Emirates NBD ATM across the country.

The initiative follows a successful pilot by Emirates NBD in partnership with Network International, Visa and technology provider Planet.

Non-UAE Visa cardholders will now be able to view the exact conversion amount and fees in their home currency before making a cash withdrawal.

The service will be rolled out to over 1,000 ATMs, a statement said.

This will be powered by Planet’s currency conversion solution, covering over 130 foreign currencies and integrated by Network International across Emirates NBD’s ATM network country-wide.

Suvo Sarkar, group head – Retail Banking & Wealth Management at Emirates NBD, said: “Emirates NBD is committed to making banking easy, accessible and more convenient for UAE residents and visitors alike. We are pleased to launch this service in partnership with Network International, Visa and Planet with the aim to better facilitate cash withdrawals for visitors to the UAE through our extensive ATM network.”

Samer Soliman, managing director – Middle East, Network International, added: “We are pleased to offer seamless and transparent currency conversion to our clients with coverage of over 130 currencies. This initiative will add value to our clients and we look forward to future collaborations that support our commitment to enhance the UAE’s banking and payment ecosystems.”

Source:https://www.arabianbusiness.com/banking-finance/428236-currency-conversion-now-available-at-emirates-nbd-atms

Sidi Kerir Petrochemicals Co. (SIDPEC) has chosen Honeywell UOP’s C3 Oleflex technology to produce 500,000 metric tons per year of on-purpose propylene at SIDPEC’s refinery in Amerya, near Alexandria, Egypt. With this, Honeywell UOP’s Oleflex technology has been selected for 52 out of 64 propane and isobutane dehydrogenation projects globally since 2011.
Honeywell will also provide the process design package, proprietary and non-proprietary equipment, on-site operator training, technical services for startup and continuing operation, and catalysts and adsorbents for the project.

When completed, the SIDPEC unit will be the first Oleflex unit operating in Egypt.

“This plant will allow SIDPEC to expand its portfolio and take advantage of domestically produced propane to make products such as polypropylene,” said John Gugel, president of Honeywell UOP. “The Oleflex technology converts propane into high-quality propylene, which is rising in demand, particularly in growing economies.”

According to IHS Markit, annual demand for polypropylene in Africa was 1.9 million metric tons in 2016. But due to rapid population growth and urbanisation, this demand is expected to rise by an additional 1 million metric tons in the next decade. Egypt is the top consumer of polypropylene in Africa, consuming about 4.4 kg per capita, and demand there is projected to grow by more than 5 per cent annually through 2022.

Honeywell UOP’s C3 Oleflex technology uses catalytic dehydrogenation to convert propane to propylene and is designed to have a lower cash cost of production and higher return on investment among competing technologies. Its low energy consumption, low emissions and fully recyclable, platinum-alumina-based catalyst system minimises its impact on the environment. The independent reaction and regeneration sections enable steady-state operations, improved operating flexibility, and a high on-stream factor and reliability.

SIDPEC is a joint stock company established in 1997 and represents Egypt’s initial development of a domestic petrochemicals industry. The company’s production assets are based on the latest available technologies and designs to ensure competitiveness and compliance with Egyptian environmental regulations.

Source:https://www.fibre2fashion.com/news/textile-news/sidpec-chooses-honeywell-technology-for-egyptian-plant-243130-newsdetails.htm

The International Cotton Advisory Committee (ICAC) has announced that the World Cotton Research Conference (WCRC) will be held from October 3-7, 2020 in Sharm-el-Sheikh, Egypt. The WCRC is organised by the ICAC under the auspices of the International Cotton Researchers Association (ICRA). It brings together the top researchers and cotton specialists from across the globe.
The seventh event held since 1994, the WCRC will serve as a global platform for scientists and experts to share the latest updates in cotton research and development. Internationally recognised experts will be invited to deliver plenary and keynote presentations.

“Given the many challenges that cotton is facing around the world — including soil degradation, inefficient knowledge transfer and lack of access to modern technologies — it is the perfect time to convene many of the world’s top cotton scientists to find the path forward,” said ICAC head of technical information, Dr Keshav Kranthi. “The ability to meet face-to-face with colleagues from all over the world and learn from each other is an opportunity not to be missed.”

The WCRC is held once every four years in different cotton-growing countries. Previous conferences were held in Australia (1994), Greece (1998), South Africa (2003), USA (2007), India (2011) and Brazil (2016).

Formed in 1939, the ICAC is an association of cotton producing, consuming and trading countries. It acts as a catalyst for change by helping member countries maintain a healthy world cotton economy; provides transparency to the world cotton market by serving as a clearing house for technical information on cotton production; and serves as a forum for discussing cotton issues of international significance. (PC)

Source:https://www.fibre2fashion.com/news/textile-news/icac-to-host-cotton-research-conference-in-october-251812-newsdetails.htm

Agility Public Warehousing Co, a Kuwait-based logistics company operating in more than 100 countries, is stepping up plans to develop so-called warehouse parks across Africa at a cost of about $200 million each.

The company, which has annual revenue of about, $5.5 billion, has set up one at the Ghanaian port city of Tema, about 16 miles east of the capital, Accra, and will open three more, in Abidjan, Maputo and Lagos – the commercial hubs of Ivory Coast, Mozambique and Nigeria respectively – by the end of the second quarter of next year. Addis Ababa, Luanda, Nairobi, Dar es Salaam and Kinshasa may follow.

The idea is to “build it and they will come,” Geoffrey White, Agility’s chief executive officer for Africa, said in an interview in Cape Town last week.

The parks comprise tens of thousands of square meters of warehousing with reliable power, internet and security. Built on the outskirts of major commercial hubs, they offer multinational companies a quick way to set up distribution centres, White said. While there are some similar projects on the continent, none are of Agility’s scale, he said.

Cummins Inc, which makes generators and engines, is one of its initial customers, using the park in Ghana for its West African distribution.

Egypt, Morocco and Algeria are potential sites for parks in North Africa, White said.

Source:https://www.arabianbusiness.com/transport/427578-kuwait-warehousing-company-agility-plans-trans-africa-facilities

The Kuwait Capital Market Authority will start next month a public offering of its 50 percent stake in the local stock exchange.

Only Kuwaiti citizens will be eligible to buy the shares, according to a press release on Sunday. The subscription period will run from Oct. 1 to Dec. 1, with the offering price set at 100 fils per share, or one-tenth of a dinar.

The offering is the second and final stage of a privatisation process that started in February, when the markets regulator sold 44 percent of the company to a consortium of domestic and international investors.

Boursa Kuwait will be the second in the Gulf to be publicly traded after Dubai’s.
The consortium that bought the stake earlier this year comprised the Athens Stock Exchange, National Investments Company, First Investment Company and Arzan Financial Group.
After the offering is completed, Kuwait’s Public Institution for Social Security will retain the remaining 6% in the company.
Kuwait’s main equity index is up about 24% this year, the most within major peers in the region, amid bets of an upgrade from frontier to major emerging-markets gauges.

SOurce:https://www.arabianbusiness.com/equities/427480-kuwaits-apital-market-authority-to-start-stake-sale-of-bourse-to-local-investors

Kuwait-based JustClean has revealed expansion plans for the GCC and further afield.

Established three years ago by Kuwaiti brothers Athbi and Nouri Al-Enezi, JustCean has signed up more than 100 laundry businesses in the UAE since its marketplace app was introduced to the country in 2018.

Athbi Al-Enezi said: “We’re looking to sign up at least ten more laundries in the UAE each month for the rest of the year and into 2020 as we expand our logistics operation in Dubai, Abu Dhabi, Al Ain, Sharjah, Ajman and Ras Al Khaimah.

“We’re going to be doubling the size of our fleet of delivery vans and drivers by the end of the year, and we’re following a similar pattern of growth in Kuwait, Bahrain and Saudi Arabia, as well as expanding to markets beyond the GCC.”

Currently operating in the UAE, Kuwait, Bahrain and the Eastern Province of Saudi Arabia, JustClean will open for business in Jeddah and Riyadh before the end of the year, with entry into other international markets to follow early next year.

Nouri Al-Enezi said: “The company is three businesses in one, namely a marketplace application, a logistics operation as well as a SaaS (software as a service) business. We’re upgrading what is basically a large and underdeveloped sector through the integration of technology into the daily lives of consumers.

“The laundry business in the GCC regionally is currently worth roughly $3 billion, with an annual growth of 9 percent, and it will develop substantially in the next five years. We feel the entire industry will eventually end up online.”

Just a year after its launch the company attracted investment by Faith Capital Holding, the Kuwait-based venture capital fund, whose deputy chairman and CEO, Mohammad Jaffar, was installed as CEO of the start-up.

In February 2019 Faith Capital announced it had closed an $8 million Series A round of financing in the company, enabling its growth across the GCC region, while also expanding the logistics and SaaS (software as a service) arms of the business.

Just a year after its launch the company attracted investment by Faith Capital Holding, the Kuwait-based venture capital fund, whose deputy chairman and CEO, Mohammad Jaffar, was installed as CEO of the start-up.

In February 2019 Faith Capital announced it had closed an $8 million Series A round of financing in the company, enabling its growth across the GCC region, while also expanding the logistics and SaaS arms of the business.

Source:https://www.arabianbusiness.com/retail/426955-kuwait-based-justclean-announces-expansion-plans-for-gcc-wider-region

Bahrain has lost its title as the world’s best destination for expats after falling six places in the latest Expat Insider survey.

After topping the InterNations list in 2018 and 2017, Bahrain fell to seventh out of 64 countries analysed, as concerns over working hours and job security weighed.

Kuwait was named the worst country in the survey while Oman ranked 32nd and the UAE 40th.

Bahrain slumped 17 places to 18th in the Working Abroad Index while remaining in the top 10 countries for career prospects and job satisfaction.

Expat parents are also slightly less happy, ranking Bahrain 13th out of 36 countries in the Family Life Index while expats still have no issues with settling into the country and find it easy to make friends without speaking the local language.

With the exception of 2017, when it ranked second to last, Kuwait has consistently been ranked by InterNations as the worst country for expats.

More than half the respondents (51 percent) said they do not feel at home in the local culture and 63 percent claim that making local friends is hard. What is more, the country is said to offer a low quality of life (63rd), with a majority of expats unhappy with the available leisure activities.

For Oman, expats ranked the country first for Safety and Security while it also topped the list for Friendliness, with 87 percent saying locals were welcoming.

However, Oman only comes in a mediocre 35th place out of 64 in terms of quality of life while only 42 percent are satisfied with both their career prospects and their job security and expats
raising children in Oman are particularly unhappy with the availability of leisure activities for kids.

Oman has also fallen 17 places in the Personal Finance Index with less than three in five expats still rating their financial situation positively.

The UAE was ranked one of the world’s worst countries for personal finance (61st), according to expats, 25 percent of whom said they are unhappy with their financial situation while 34 percent feel that their disposable household income is not enough to cover all living expenses.

Expats parents said they also struggle with the high costs in the UAE but the UAE is considered a very safe country for expats and their children, ranking 6th globally.

Taiwan, Vietnam and Portugal were ranked the top three expat destinations in the world.

InterNations, the world’s largest expat community with 3.6 million members, received more than 20,000 respondents for the survey which offers in-depth information about expats’ satisfaction with the quality of life, ease of settling in, working life, personal finance, cost of living, and family life in their respective country of residence.

Source:https://www.arabianbusiness.com/culture-society/427326-bahrain-loses-title-of-worlds-best-destination-for-expats