President His Highness Sheikh Khalifa Bin Zayed Al Nahyan has issued a decree overhauling foreign ownership rules of commercial companies, as part of the government’s ongoing efforts to ensure a conducive legislative environment and open up economy to all nationalities.
The decree, which introduces significant amendments to the UAE Federal Law No. 2 of 2015 on Commercial Companies, annuls the requirement for commercial companies to have a major Emirati shareholder or agent, providing full foreign ownership of onshore companies. Under the new amendments, businesses can now be fully established by non-Emiratis of all nationalities, with companies now having a maximum of one year to comply with the amended law from the time its articles become effective.
This can be extended under a decision by the cabinet as proposed by the Minister of Economy.
The decree, in addition, supersedes the UAE Federal Law No. 19 of 2018 on Foreign Direct Investment (FDI Law). It also includes certain provisions and regulations related to limited liability and joint stock companies aimed at attracting foreign capital and further boosting the local economy.
The decree grants relevant local authorities a set of powers, including setting a specific percentage of Emiratis in the capital allocation and boards of directors of companies, approving requests to establish companies -except for joint stock companies- and identifying fees & charges according to the policies adopted by the UAE Cabinet.
