New UAE Investment Law Allows 100% Foreign Ownership

UAE Investment Law

By Caitlyn Buchanan, 22.05.2018 (Updated on 21.01.2021)

The United Arab Emirates (UAE) have now finalised regulations which allow foreign investors to hold 100% ownership in a larger range of onshore business sectors. The new regulations were signed into force by the president on 1st December 2020 updating the 2015 Commercial Companies Law regarding companies and their shareholding.

This landmark law has changed the country’s investment landscape by increasing opportunities for Foreign Direct Investment (FDI). There is now only a small range of ‘strategically important’ business sectors that remain excluded from foreign ownership; they include oil and gas exploration, utilities and transport, and state-owned entities.

Previous Regulations

The UAE is a federation of seven emirates where the previous laws generally allowed foreigners to hold only 49% ownership of a company and required a UAE national sponsor or an Emirati-owned company as a partner. There were only two regions offering an exception to this rule; Ras Al Khaimah and Dubai which were considered the only ‘offshore’ or ‘free zones’ allowing 100% foreign ownership of International Business Companies (IBCs).

Foreign Investment in the UAE

The UAE consistently maintains its position as the main destination for FDI within the Middle East and North Africa region. In 2019 the UAE brought in $13.4 billion, accounting for 23.5% of total FDI investment in the region. The Emirate is said to be working on several other bold reform initiatives to improve investor confidence, including the newly incorporated UAE 2016 Bankruptcy Law which allows companies to restructure if they find themselves in financial trouble. The 2016 Bankruptcy Law, 2015 Commercial Companies Law, and the new Foreign Investment Law show the UAE is taking strides toward proving itself as an attractive global investment hub.

This landmark law has opened up business activities to foreign investors offering access to a friendly business environment, political stability, and excellent infrastructure. The UAE has positioned itself to become one of the foremost investment destinations in the world. If you would like to learn more about incorporating a company in the UAE, please contact the experts at Euro Company Formations on +353 (0) 16461627 or click here.

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