News and developments
Is it possible for foreign investors to have a big loan?
The United Arab Emirates has consistently sought to develop the UAE into a pro-business region and to have the best of facilities and policies that encourage foreign direct investments. The UAE has progressed in leaps and bounds and has established itself on the global page. It no longer identifies itself as an economy that is dependent on oil and instead has developed a well-diversified economy. The establishment of the Dubai International Financial Centre Courts system (DIFC), Dubai International Arbitration Centre (DIAC) and the Abu Dhabi Commercial Conciliation & Arbitration Centre (ADDCCAC), allowing for adjudication in English, constitute an alternate legal mechanism other than the UAE local courts.
The UAE has also developed and offered almost 40 strategic economic zones or free trade zones that allow foreign investors to own and establish a company or branch of a foreign company. Recently, the UAE government issues a landmark law that now allows foreign investors to hold 100 % ownership in a mainland UAE company without mandatorily appointing a local sponsor with 51% shareholding. Certain strategic business sectors would still remain excluded depending on the decision of each emirate.
The UAE offers a robust banking infrastructure, and banks often provide loans for foreign investors. There are specific banks that cater to the requirements of small and medium enterprises and issue bank loans. The interest percentage, collateral and repayment term differ amongst each. Business entities with years of successful operations and good credit history to showcase, have a higher chance of securing bigger loan amounts. The banks also carefully vet and process the capabilities of the company, its management structure, its turnover and collateral as deciding factors.
Other critical elements vetted by banks could include:
The UAE is extremely focused on effecting changes in the legal regime and economy that ensures that foreign investors continue to profit from all that UAE has to offer.Alternate funding options can also be sought by foreign investors, especially by entrepreneurs, which include funding options in the form of venture capital and angel investors. These are slowly becoming extremely popular and viable financing options in the UAE.