UAE to implement 100% foreign ownership of companies on June 1
The amended Commercial Companies Law, allowing foreign investors and entrepreneurs to establish and fully own onshore companies, will come into effect on June 1 this year, the UAE’s Ministry of Economy has announced.
The UAE Government had recently adopted an amendment to the law allowing 100 percent foreign ownership of companies.
"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.
The amendments will boost the UAE’s appeal as an attractive destination for both foreign investors, entrepreneurs and talent, added Bin Touq, and will further strengthen the country's standing as an international economic centre and encourage an investment flow to vital economic sectors.
“This represents a significant shift from the existing default position where mainland companies have been subject to foreign ownership restrictions under the Commercial Companies Law (“CCL”), and it has typically been mandatory for them to have a local sponsor holding a majority share in the mainland company,” said Yousif Ahmed, Esq. founder, Richmond Sterling Law LLC.
“We’re now at the point where these reforms are being actively rolled out and implemented. Its significance cannot be understated in the context of the country’s business and commercial landscape. It is exciting news for the business community, and it will no doubt be of interest to both existing mainland companies and to those thinking of starting a business in the UAE,” he added.
Back in November last year, the UAE confirmed the changes to its commercial company ownership laws in a tweet and was seen by industry experts back then as the latest move to make the country more expat-friendly. The previous rule that onshore companies had to have a major UAE shareholder had been described by one investor as the "number one issue" for foreign companies.
The amendments are the latest in a series of measures aimed at liberalising business activity in the UAE, where foreigners comprise more than 80 percent of the population.
In October 2020, Dubai launched a virtual visa scheme, which allows remote working professionals from all over the world to relocate to the emirate with their families with access to all services, including schooling, telecom, and services.
Last September, the emirate launched a retirement programme for resident expatriates and foreigners over the age of 55 which was the first of its kind in the region and is being spearheaded by Dubai Tourism in collaboration with the General Directorate of Residency and Foreigners Affairs.
Dubai has also recently launched the Virtual Company Licence, which allows global businesses to access a regulated e-commerce platform populated by Dubai-based companies, while also exploring new markets and investment opportunities digitally.
The initiative, which allows investors worldwide to do business in Dubai digitally without having to live in the emirate, is expected to attract more than 100,000 companies.