UAE allows 100% ownership of businesses by foreign nationals

Issac John /Abu Dhabi Filed on November 23, 2020 | Last updated on November 24, 2020 at 12.39 am


Several categories of business licences will no more require Emiratis as sponsors

The landmark UAE reform allowing foreign investors 100 per cent ownership of businesses will take effect from December 1, 2020.

The long-anticipated and widely discussed Foreign Direct Investment Law, which will have game-changing implications on the investment landscape of the nation, was approved by the President, His Highness Sheikh Khalifa bin Zayed Al Nahyan.

As per the new FDI regime, several categories of business licences will no more require Emiratis as sponsors with 51 per cent shareholding rights from December 1.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said the UAE now enjoys a fertile legislative environment for foreign direct investors in order to enhance the nation’s competitiveness.

The FDI law, which was adopted in September 2018 through Federal Legislative Decree No 19 of 2018 and an ensuing resolution by the UAE Council of Ministers No 16 of 2020 in March 2020, amends Commercial Companies Law (CCL) No 2 of 2015.

Under the existing CCL, foreign shareholders are restricted to own only up to a maximum of 49 per cent in a ‘limited liability company’ (LLC) operating as an onshore UAE business. The law, therefore, requires an Emirati individual or 100 per cent Emirati-owned company to hold the balance 51 per cent share as a local sponsor.

The new law has amended 51 articles of CCL and added new ones, mostly focusing on the regulation of provisions of establishing companies with limited liability shareholding.

The UAE Cabinet Resolution in March 2020 determined the ‘Positive List’ of sectors and economic activities in which the FDI law is permissible and the percentage of ownership is 100 per cent in companies outside free zones. However, this remained subject to certain criteria being satisfied.


Issac John

Editorial Director of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.

ERROR: Macro /ads/dfp-ad-article-new is missing!
MORE FROM Khaleej Times
CurrentRequestUnmodified: /apps/pbcs.dll/article?avis=KT&date=20191212&category=ARTICLE&lopenr=191219846&Ref=AR&profile=1010 macro_action: article, macro_profile: , macro_adspot:
KT App Download
khaleejtimes app

All new KT app
is available
for download:

khaleejtimes - android khaleejtimes - ios khaleejtimes - HUAWEI AppGallery