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UAE: full foreign ownership of companies now allowed

UAE: full foreign ownership of companies now allowed

The UAE has changed its rules to allow foreign investors and entrepreneurs full ownership of companies based in the Emirate.

 

Minister of Economy Abdullah bin Touq said the changes, which came into effect on 1 June, were “a new step that reflects the UAE government’s commitment to supporting the economy and enhancing its readiness for the future”.

The initiative was originally announced in November 2020, and was due to take effect from December 1, 2020. However, its implementation was delayed to enable the widening of the sectors eligible for full ownership by foreign investors.

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”.

Under the new foreign direct investment regime, several categories of business licences will no longer require Emiratis as sponsors with 51% shareholding rights.

In 2020, Dubai recorded a 44.2% hike year-on-year in foreign direct investment (FDI), to Dh73 billion (£14bn), on the back of a series of regional reforms, including the 100% business ownership law.

FDI flows during 2020 were mostly in the digital sector, including Artificial Intelligence, the Internet of Things, blockchain, virtual reality, robotics, self-drive cars, renewable energy, innovation, and agritech, among others. The oil and gas sector attracted the most foreign direct investment.