UAE to implement 100% foreign ownership of companies from June 1
UAE Ministry of Economy has made a very important announcement stating that the new Commercial Company Law with regards to 100% Foreign Ownership will be effective from 1st of June, 2021. Foreign-owned firms no longer need a UAE national as an agent to operate businesses
“The amended Commercial Companies Law aims at boosting the country’s competitive edge and is a part of UAE government efforts to facilitate doing business,” said Abdulla bin Touq Al Marri, Minister of Economy.
This step will further boost investor’s confidence. This new initiative reflects the UAE government’s commitment to support the country’s economy and attract more foreign investment into the country and will further strengthen the country’s standing as an international economic center and encourage an investment flow to vital economic sectors.
According to the announcement, all the existing business in the mainland can amend their license according to the new Commercial Companies law.
Back in November last year, the UAE confirmed the changes to its commercial company ownership laws by amending the restrictions on foreign ownership in the United Arab Emirates. From that point onwards, Ministry of Economy was working on widening the scope of sectors and finalizing the sectors to be included in the scope. Last month, the UAE’s Ministry of Economy said it is working on a new legislation to include 10 new sectors to the Commercial Companies Law, which allows 100 per cent foreign ownership of onshore companies in the country.
As per the new foreign direct investment regime, several categories of business licenses will no longer require Emirates as sponsors with 51 per cent shareholding rights. Moreover, the mandatory requirement of having the Local Service Agent will also be no longer applicable as per the new Commercial Company Law.
However, there are exceptions for a few businesses operating in sectors that are strategically important to the UAE. The new decision is not applicable for companies wholly owned by Federal or local Government or their subsidiaries.