A visitor uses her iPad to photograph aircraft during the 13th Dubai Airshow at the Dubai World Central (DWC) in this file photo dated November 18, 2013. Apple will open its first Middle East store in Dubai this year and then Abu Dhabi after securing the privileges, according to sources.
Bloomberg/Dubai
Apple Inc has been granted an exemption from foreign ownership laws in the UAE that will allow it 100% control of operations in the country, according to two people with knowledge of the matter.
The dispensation was a condition for the world’s largest listed company to set up in the UAE, the people said, asking not to be identified as the plans are private. Apple will open its first Middle East store in Dubai this year and then Abu Dhabi after securing the privileges, according to the people.
Under local regulations, all businesses operating in the UAE must be 51% owned by Emiratis or a company wholly owned by them unless they are based in free-zones. The government is working on a new foreign investment law that would allow 100% foreign ownership in some industries, Minister of Economy Sultan al-Mansoori said in March.
“Apple was licensed in the UAE through the Ministry of Economy according to the requirements of, and in compliance with the Commercial Companies Law, as well as the ministerial resolution on foreign company branches,” Ahmad al-Hosani, director of trade registration at the Ministry of Economy, said in an e-mailed statement.
The UAE is an attractive market for Apple, whose iPhone business makes up 63% of its revenue in the most recent quarter. There are about 17mn active mobile subscriptions in the UAE and 61% of them are smartphones, according to the Telecommunications Regulatory Authority. The iPhone 5s was the most popular handset in the country in the fourth quarter of 2014, the latest figures from the regulator show.
A spokeswoman for Apple in Dubai didn’t respond to calls and e-mails requesting comment.
No voting rights for foreign shareholders, says Etisalat
Etisalat will not extend voting rights to foreign investors when the UAE’s former telecom monopoly opens up its shares to non-UAE investors, it said yesterday. Government-run Etisalat is worth nearly twice as much as the second biggest listed UAE company, but its publicly-traded shares can only be owned by UAE nationals and all institutions are excluded.
In June, Etisalat said it would loosen these rules to permit foreign and institutional investors to buy shares, and yesterday it provided further details after reforms were approved by the cabinet.
Non-UAE investors will be allowed to own up to 20% of Etisalat’s shares, the company reiterated, but will not be granted voting rights, a statement to Abu Dhabi’s bourse said.
Given other attractions of the stock, that restriction should not deter foreign buyers, one analyst said. “Even if they were allowed to vote the government owns a majority stake and so will be in charge,” said Shrouk Diab, an Assistant Vice President at NBK Capital in Dubai. “Etisalat’s stable dividend policy is attractive to investors and the company is also a play on the UAE economy.”
Etisalat will likely be included in MSCI’s emerging market index after foreign share ownership is permitted, and its weighting on the MSCI will also probably be too big for funds tracking the index to ignore.