Amending Commercial Companies Law
23 Nov 2020
On 23 November 2020, UAE issued a decree making significant amendments to the UAE Federal Law No. 2 of 2015 on Commercial Companies, which may effectively allow for 100% ownership of onshore companies by foreign nationals.
The key points include among others:
- The decree annuls the requirement for commercial companies to have a major Emirati shareholder or agent, providing full foreign ownership of onshore companies. In addition, there is no longer a requirement to have a UAE national or local company as registered agent.
- Under the 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 supersedes the current Foreign Direct Investment Law (Federal Law No. 19/2018) that permits foreign nationals to own up to 100% of 'onshore' companies doing business in certain sectors that are listed in the 'positive list'.
- The decree 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 and charges according to the policies adopted by the UAE Cabinet.
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Type:
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Entry and establishment (Ownership and control, Approval and admission)
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Industry:
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