100% Foreign ownership for businesses in UAE

UAE Allows 100% Foreign Ownership of Businesses to boost economy – Commercial companies law key amendment

100% Foreign ownership for businesses in UAE: The UAE has repealed the need to have UAE nationals as sponsors, thus allowing expatriate investors 100 per cent ownership with effect from December 1, 2020.

The long-awaited 100 per cent ownership by foreign nationals of companies licensed and registered in the UAE is allowed as per Cabinet Resolution No. 16 of 2020.

The new law amended 51 articles and added new ones, exempt expatriate investors from the minimum percentage ownership of UAE nationals.

As per the Commercial Companies Law, Law No. 2 of 2015, foreign shareholders were limited to owning a maximum 49 per cent in a ‘limited liability company’ (LLC) operating as an onshore UAE business. This requires an Emirati individual or 100 per cent Emirati-owned company to hold the balance 51 per cent share as a local sponsor.

The amended law allows natural and legal persons to establish companies without the need for a specific nationality. The law, however, will not apply to some companies that are excluded based on decisions by the Cabinet and those that are either wholly-owned by federal or local governments or their subsidiaries.