Dubai: As on 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 in accordance with 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 are now permitted to own 100% of enterprises that are licensed and registered in the UAE. On occasion, individual emirates permitted foreign-owned businesses to purchase the remaining stakes in recent years. Thus, the most recent revision greatly broadens the scope of that.

The new law, which 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 the establishment of businesses, which will increase the UAE’s competitiveness.


A committee will be established in accordance with a Cabinet decision 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 certain nationality when forming firms for natural and legal persons. However, certain businesses that fall under the Cabinet’s exclusionary rulings and those entirely owned by the federal, state, or local governments or their subsidiaries will not be covered by the law.


If applicable laws governing such activities permit it, 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.