Space, AI, renewable energy to get priority in 2019 - law firm
Dubai, UAE, 20 January, 2019: Space, artificial intelligence and renewable energy pointed out as priority sectors in the UAE, and is expected they will be amongst those to be opened up to higher levels of foreign investment in 2019, according to legal experts.
Legislation recognising ICOs as securities, as well as, new laws on netting, dispute resolution and giving more flexibility to public joint stock companies are among the other significant legal reforms that will happen this year, says STA Law Firm.
Among the most significant developments expected in 2019 is the issuance of the Cabinet resolution which determines the sectors and activities that are open to higher levels of foreign investment, says STA senior partner, Sunil Thacker.
It is likely that sectors such as space, artificial intelligence, renewable energy and technology will be among the sectors permitted to hold 100% foreign ownership. This list is expected to be released by the Government within the first quarter of the year.
This follows the issuance of the new Federal Law in 2018 which introduced several major changes in 2018 and Thacker believes it will be matched this year by another wave of new laws and frameworks combining to generate a fresh surge in foreign investment and economic development. In further signs of how the UAE is creating a legal system for the 21st century, Thacker says the expected legislation coming in this year to recognize ICOs as securities will have multiple benefits.
The primary advantage of ICOs is that no equity is typically given away, helping secure the future value of the business with the founders and the equity investors, he said. Classifying ICOs as securities will provide legal certainty, lower risk, strengthen buyer protection, and bring in better returns.
STA believes along with the expected 2019 reforms, the Cabinet resolution permitting public joint stock companies to issue preference shares will provide more incentives for foreign investment within the UAE.
Investors from overseas and existing companies will equally benefit from the new legislation due to the fact that company shareholders will be permitted to share the risks with other investors, and overcome legal limitations with regard to foreign ownership, explained Thacker.
He said the arrival of a new netting law later this year will foster clarity for parties to manage and minimize credit or settlement risks. In circumstances involving bankruptcy and insolvency, it will also assist financial institutions to facilitate transactions involving parties to a netting agreement.
STA says 2019 will also see the introduction of a new dispute resolution law to resolve party conflicts arising within the commercial sectors.
The new laws coming in 2019 will act as a beacon for new investment which will lead to significant economic, political, and regional development, said Thacker.
Additionally, Thacker says, the fast-growing Abu Dhabi Global Market is expected to introduce a new regime for bank recovery and resolution this year, enabling ADGM financial institutions facing financial difficulties a fresh alternative to the current insolvency regulations. Meanwhile, talks are now underway at the Dubai International Financial Centre to modernize and streamline its current procedures.
