New UAE Investment Law to Allow 100% Foreign Ownership

By Ana Maricic, 22.05.18

The United Arab Emirates (UAE) are in the process of passing new regulations which will allow foreign investors to hold 100% ownership in some specific onshore business sectors. The Minister of Economy announced that the final draft of the law is awaiting the UAE Federal National Council approval and is expected to become law by the last quarter of 2018.

The business community now eagerly awaits this landmark law that is expected to change the country’s investment landscape by promoting foreign direct investment (FDI) opportunities in the non-oil sectors. Economists and analysts expect a 15-20% boost in private and FDI when the law is finally introduced.

The UAE is a federation of seven emirates who’s current laws generally allow foreigners to hold only 49% of ownership and require an Emirati sponsor. However, there are exceptions in regions such as Ras Al Khaimah and Dubai which are considered ‘offshore’ or ‘free zones’ that allow 100% foreign ownership of International Business Companies (IBCs).

In 2017, the UAE remained the main destination of FDI bringing in $11 billion and accounted for 22% of total FDI investment within the Middle East and North Africa 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.

With a friendly business environment, political stability, and excellent infrastructure the UAE is well positioned 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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