November 29 2020

UAE Allows Full Foreign Ownership of Firms to Boost Economy

Source: Gulf News; Bloomberg

 

UAE allows 100% ownership of businesses for foreign nationals from December 1, 2020. The new presidential decree announced on Monday 23 November amends the Federal Law No. 2 of 2015 on Commercial Companies (“Companies Law”), superseding the Decree Law No. 19 of 2018 on Foreign Direct Investment. It annuls the requirement for commercial companies to have a major Emirati shareholder (or agent), and thus providing full foreign ownership of onshore companies.

Under the new rules:

  • Local authorities can set specific targets for Emiratis in capital allocation and boards of directors of companies. They can also approve requests to establish companies, except for joint stock companies.
  • Firms wishing to become joint stock companies can now sell as much as 70% through initial public offerings, instead of the current 30%.

The legal changes come on the heels of reforms to personal status and family laws announced earlier this month that decriminalized cohabitation among unmarried couples and removed a requirement to obtain a license to consume alcohol as part of an effort to remain attractive to foreign expertise and investment.

Abolishing the need for local partners in onshore companies will ultimately pressure the business model of dozens of free zones across the UAE to help satisfy foreign companies unable to work onshore.

Further official updates detailing the implementation phase of new law will come up soon.

You can read more, here:

https://gulfnews.com/business/uae-allows-100-ownership-of-businesses-for-foreign-nationals-from-december-1-2020-1.1606134333609

https://www.bloomberg.com/news/articles/2020-11-23/uae-abolishes-requirement-for-local-partners-in-firms-national