Foreign direct investments (FDI) from Chinese companies in Abu Dhabi’s industrial free zone has touched $1 billion in less than a year.
The investment is expected to rise when the UAE’s new investment law takes effect, according to a statement by officials Thursday, Reuters reported, adding that Chinese companies are seizing opportunities in the Gulf as the world's second-biggest economy seeks to expand its influence overseas with its ambition to rebuild Silk Road trade routes.
Last year, five Chinese companies from Jiangsu province set up base in the Khalifa Industrial Zone Abu Dhabi (Kizad) to build various industries with an initial investment of $300 million. A further 10 Chinese companies have invested in Kizad, taking the total number of companies to 15 and value of investments to $1 billion, Mohamed Juma Al Shamsi, chief executive of Abu Dhabi Ports told a business forum, Reuters said.
A new investment law that will allow 100 per cent ownership to foreign companies outside of free zones in the UAE is expected before the end of this year, encouraging more Chinese firms to invest, according to He Song, Economic & Commercial Counsellor, Embassy of China in the UAE. As the UAE is China’s largest non-oil trading partner and an important gateway to Europe and Africa, Song added that many Chinese companies were awaiting the UAE’s new investment law.
Foreign companies can own only up to a 49 per cent stake in a company in the UAE but are allowed 100 per cent ownership in free zones.