The UAE may open healthcare and education to majority foreign ownership to encourage more competition, a top official said.

UAE Minister of Economy Lubna Al Qassimi said the country would open some of its service industries to majority foreign ownership before the end of the year. She was not more specific.

'For sure it could be healthcare, education and professional services,' the ministry official told Reuters in Abu Dhabi. He declined to be identified. 'The law should come out after summer, latest before year-end.'

Nationals from outside the six oil-producing Gulf Arab states need to take a local as a majority partner, except in specified areas called free zones.

The move to could attract more foreign investment to the UAE, said Giyas Gokkent, head of research at the National Bank of Abu Dhabi .

'When you relax foreign ownership rules, it stimulates foreign investment for economic growth,' Gokkent said.

The UAE economy surged by 9.3 per cent last year as record oil earnings spurred government and private investment, according to HSBC Holdings. Growth this year could ease to 6.2 per cent, according to the bank.

'The UAE already attracts a lot of foreign direct investment but most of it is in the free zones,' Gokkent said.

Driving the new policy may be free trade talks between the European Union and the six states, including the UAE, Saudi Arabia and Kuwait, said Raj Madha, a financial services analyst at Egyptian investment bank EFG-Hermes.

'It may be related to the free trade agreement between the European Union and the GCC, which is currently under discussion,' Madha said from his office Dubai.

'A key component of these discussions has been the issue of restrictions on foreign direct investment.'

Qassimi said:  'One hundred percent foreign equity participation could be allowed predominantly in the services sector and some partial equity in the financial services.'  Reuters