Things You Need to Know About The New Decree on 100% Foreign Business Ownership in the UAE

The UAE government has finally issued the long-awaited law for expatriate investors to own their business 100% in the UAE. The law has been in effect since December 1, 2020. The issued law covers companies and their shareholding licensed and registered in the UAE.

 

Previously, the shareholders could allow their foreign counterparts or entrepreneurs to own 100% of their business on a case by case basis. The amendment to Law No. 2 of 2015 on companies and their shareholding thus significantly improves the scope of foreign investors’ ownership. This new amendment consists of 51 articles, mainly focusing on the regulations and provisions of establishing and ownership of the companies with limited liability shareholding. This amendment aims to provide a suitable environment for the establishment of businesses to enhance the UAE’s competitiveness in line with attracting more foreign investors. 

The new amendment will allow the foreign businessmen or entrepreneurs who had doubts about starting their business out of the UAE’s free zones because of the considerations caused by local partnership or sponsorship to own their business fully now. This will strengthen the UAE’s position as a leading international financial center by attracting more foreign direct investment. However, the relaxation does not apply to the ownership of state-owned entities and companies operating in strategically important sectors, e.g., oil and gas exploration, energy and hydrocarbons, utilities and transport, etc.  

Previously, based on Law No. 2 of 2015, foreign entrepreneurs could only own 49% of their business. In contrast, a local business partner owned the rest of the shares – in a ‘limited liability company’ (LLC). Thus, an Emirati individual or an Emirati-owned company sponsoring the business was required for establishing an LLC. The new amendment now permits natural and legal persons to establish companies heedless of their nationality. It has been recognized as one of the landmark reforms taking place in the UAE. Still, this rule does not apply to companies or businesses owned by federal or local governments or their subsidiaries. The effort has been announced to be one of the steps the government is taking to raise the national economy’s readiness, plus preparing for the future by developing commercial and investment opportunities. This involves preparing the infrastructure for increasing the competitiveness of the business environment, which is being influenced rapidly by the rapid economic changes and developments occurring in the global economy.

 

Categories
dubai mainland ded license renewal

How to Renew Dubai Mainland DED License Online

The Dubai Economic Development (DED) e-trader is an online platform that enables UAE nationals, GCC nationals, and foreigners (expats) to obtain a mainland license (with 100% foreign ownership) for offering services and professional activities only.

Read More »

Subscribe to our Newsletter

Get the latest business setup news and Government updates.

Explore More

dubai mainland ded license renewal

How to Renew Dubai Mainland DED License Online

The Dubai Economic Development (DED) e-trader is an online platform that enables UAE nationals, GCC nationals, and foreigners (expats) to obtain a mainland license (with 100% foreign ownership) for offering services and professional activities only.

Read More »
how to get Ejari in dubai

What is Ejari and How to Register Ejari in Dubai

The Dubai Economic Development (DED) e-trader is an online platform that enables UAE nationals, GCC nationals, and foreigners (expats) to obtain a mainland license (with 100% foreign ownership) for offering services and professional activities only.

Read More »