United Arab Emirates eases investment curbs
United Arab Emirates, Business, 7/21/1997

The United Arab Emirates has further relaxed rules for investment by foreigners in a measure that is expected to attract funds usually sent abroad, bankers said on July 17.

The United Arab Emirates has already departed from longstanding policies by allowing its large expatriate community to own up to 20 percent of an investment fund, and authorities this week gave approval for the level to be raised to 49 percent.

The Emirates equity fund was launched by Emirates Bank International (EBBI) in May with a capital of 8.2 million US dollars, the first investment facility open to foreigners in the Gulf state.

"From the rush by foreigners for that fund, there is no doubt the new move will bring the United Arab Emirates billions of dollars that used to be siphoned out by expatriates," one banker said.

Foreigners, who had been barred from owing shares in the United Arab Emirates, flooded subscription centers when the Emirates Equity Fund was launched.

With native investors also pouring in cash, the fund was heavily oversubscribed in three weeks, reaching 73 million US dollars.

Bankers said they expected other banks in the United Arab Emirates to create similar funds after approval by the central bank, which has been lobbying the federal government to allow foreigners to own shares in a bid to attract their funds.

They noted that the United Arab Emirates' foreign residents, around two-thirds of the 2.3 million population, were transferring home over half their earnings, mainly from salaries and small enterprises.

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