Manama: The UAE will allow full foreign ownership of business starting from December 1, 2020, as part of the government’s ongoing efforts to ensure a constructive legislative environment for business to further boost the national economy.
The UAE President Sheikh Khalifa bin Zayed Al Nahyan issued the decree on Monday, which allows foreign investors to fully own commercial companies without the need for an Emirati sponsor.
The new law replaces the Commercial Companies Law No. 2, passed in 2015.
Under existing law, all businesses were required to have a UAE citizen as sponsor and foreign nationals can own up 49% shares of a locally registered company, while the major shares, 51%, rest in a local partner.
In order to avoid the ceiling of 49%, some Emirates, including Dubai, have established free trade zones where foreigners can own 100% of their companies.
The latest decision opens up to 13 large commercial sectors in the UAE, and permits full ownership of foreign investors in 12 business sectors.
The UAE has the second largest economy in the Arab world and according to industry think tanks, the new decision will add fillip to the growth of the economy.
However, several sectors considered strategic are exempt from the new rules announced yesterday. These include energy and hydrocarbons, telecommunications and transport.
The decree, in addition, replaces the UAE Federal Law No. 19 of 2018 on Foreign Direct Investment (FDI Law). It also includes certain provisions and regulations related to limited liability and joint-stock companies aimed at attracting foreign investment.
