United Arab Emirates

United Arab Emirates

Opens to 100 per cent foreign ownership in most sectors

02 Jan 2022

On 27 November 2021, the Government approved a wide-ranging reform of its legal system affecting more than 40 laws. The reforms come during the UAE’s “Year of the 50th” and are intended to keep pace with its developmental aspirations.

The amendments aim to develop the legal regime in various sectors, including investment, trade and industry, as well as company operation, regulation and protection of industrial property, copyright, trademarks, commercial register, electronic transactions, trust services, factoring, and residency.

In particular, through amendments to the Commercial Companies Law (coming into effect on January 2, 2022), the Government will allow investors and entrepreneurs to establish 100 per cent foreign-owned companies in almost all sectors, except activities deemed to be “strategic”. Historically, foreigner’s ownership was capped at only 49% while the remaining 51% would mandatorily belong to a UAE national according to Federal Law no. 2/2015 and the previous companies’ law, which regulated commercial companies.

The reform also allows branches of licensed foreign companies to transform into UAE commercial firms and eliminates nationality requirements for members of the companies’ boards of directors.