UAE’s Gulf Investor Law: A Trap of Corruption and Legal Gaps

The UAE’s new Gulf Investors Law, which offers GCC nationals the same rights as Emirati citizens for economic activities, has faced criticism due to corruption, lack of protection, and weak rule of law, undermining the law’s appeal and effectiveness.

Despite its economic potential, the law, passed in September 2024, has done little to address growing concerns among Gulf and foreign investors, who have long reported issues with corruption and the misuse of the judiciary.

UAE71, a local opposition media platform, highlighted that the law’s aim to attract more investment may be overshadowed by persistent allegations of financial and administrative corruption, with the judiciary often seen as favoring politically connected entities. Such practices are creating a challenging environment for both local and foreign investors.

The law is part of a wider competition for investment between the UAE and Saudi Arabia, which has made significant strides with its ambitious economic plans. However, many investors express doubts about the UAE’s ability to provide a stable and transparent environment.

A Saudi businesswoman’s recent experience illustrates these concerns. She opened an account with Emirates NBD in 2018, only to have more than 6 million dirhams stolen from her by a bank employee using forged documents. Despite a court ruling, the bank has not returned her funds. Her case, which went viral on social media, has sparked widespread concern about the UAE’s financial system.

The UAE’s judiciary has also been criticized in other high-profile cases. In 2018, Canadian businessman Jamal Ayash won a court case against his Saudi business partners. The court ordered compensation, but the decision was never enforced, further damaging investor confidence.

Many believe that powerful networks of influential business and political figures protect corrupt practices in the UAE, making it harder for investors to seek justice.

For the Gulf Investors Law to succeed, the UAE needs to implement reforms that create a transparent, fair environment for business. Without these changes, the country risks losing its reputation as a prime investment destination.