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UAE Forbids Americans From Controlling Companies

Some advocates of the deal that would allow a company controlled by the government of the United Arab Emirates to manage port operations in the United States argue that opponents of the deal are protectionists who want to restrict free trade.
Leave aside the question of whether a government-owned company can ever engage in "free trade."

If reciprocity — i.e., equal treatment under the law — is any measure of free trade, the U.S. does not have anything remotely approaching free trade with the UAE. The UAE blatantly discriminates against U.S. capitalists and U.S.-controlled corporations.

U.S. citizens are prohibited by law from controlling businesses in the UAE.

The website of the UAE embassy has a page on "Setting Up Business" in the country. It links to a number of other websites that explain the applicable UAE law.

MiddleEastLaw.com advises: "Foreign investors are permitted to hold an equity ownership in U.A.E. companies as long as 51% of the equity is held at all times by U.A.E. nationals."

Gulf-Law.com says: "While the establishment of industrial projects is being encouraged in the UAE, ownership of such projects is restricted to national companies incorporated in accordance with applicable laws with a national participation of at least 51% of the capital. Management of the company should be by nationals."

The UAE, it is true, has established a complex of "free trade zones" near its major port. But these are for duty-free "re-export and transshipment” of goods, not for doing business in UAE itself. "More than 200 factories operate at the Jebel Ali complex in Dubai, which includes a deep-water port and a free trade zone for manufacturing and distribution in which all goods for re-export or transshipment enjoy a 100% duty exemption," says the U.S. State Department’s "Background Note” on the UAE. "… Except in the free trade zone, the U.A.E. requires at least 51% local citizen ownership in all businesses operating in the country as part of its attempt to place Emiratis into leadership positions."

MiddleEastLaw notes: "The primary benefit of establishing a branch office in a Free Trade Zone is 100% foreign ownership; however, conducting business in the U.A.E. market itself is prohibited."

The UAE itself, in other words, is not a "free trade zone."

Their government can control businesses here. Our private citizens cannot control businesses there. When will our government demand that our private citizens get the same access to their market that their government-owned enterprises get here?

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