From December 1, 2020, the UAE will let foreign nationals to own 100% of their businesses.

Dubai: As of December 1, 2020, foreign investors will be able to own 100% of their investments without the necessity for UAE citizens to serve as sponsors. The action is federal legislation amended by Law No. 2 of 2015 on corporations and their holdings and issued by President His Highness Sheikh Khalifa Bin Zayed Al Nahyan.

According to Cabinet Resolution No. 16 of 2020, foreign nationals can now own 100% of enterprises licensed and registered in the UAE. In recent years, individual emirates occasionally permitted foreign-owned businesses to purchase the remaining stakes. Thus, the most recent revision dramatically broadens the scope of that.
The new law mainly focused on regulating provisions for establishing businesses with limited liability shareholders, revised 51 articles, and added new ones. The changes exempt foreign investors from the UAE nationals’ required minimum ownership share.
His Majesty, The changes to the law were announced by Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the United Arab Emirates and Ruler of Dubai. He noted that the UAE now has a favorable legal environment for establishing businesses, which will increase the UAE’s competitiveness.

CONSTITUTION OF A COMMITTEE

A Cabinet decision will establish a committee and comprise representatives from pertinent agencies, according to article No. 10 of the modified law. It will discuss plans to monitor businesses involved in crucial strategic endeavors.

The Cabinet will then decide whether to adopt regulations licensing such businesses based on the committee’s recommendations.

A crucial update:

According to Law No. 2 of 2015’s Commercial Companies Law, foreign shareholders were only permitted to own a maximum of 49% of a “limited liability company” (LLC) engaged in onshore UAE commerce. In order to do this, a local sponsor must be an Emirati citizen or a corporation with 100% Emirati ownership.

The modified law eliminates the requirement for a specific nationality when forming firms for natural and legal persons. However, the law will not cover certain businesses that fall under the Cabinet’s exclusionary rulings and those entirely owned by the federal, state, or local governments or their subsidiaries.

ESSENTIAL ACTIONS

If applicable laws permit such activities, the new amendments permit non-joint stock corporations to participate in investment operations on behalf of other parties. A few measures for setting up the operations of a limited liability company and also one-person entities were included in the modifications.