From June 1st, foreigners can hold all the capital of a company in the UAE, compared to 49% today.
Foreigners can incorporate and hold all the capital of a company in the United Arab Emirates from June 1, an unprecedented reform aimed at improving “the ease of doing business” in this Gulf state, the government announced on Wednesday. In a bid to spur investment, the wealthy Gulf state, which unites seven emirates including Abu Dhabi and Dubai, announced in 2019 that it would repeal a decades-old law that caps the share of capital that can be held by a foreigner’s 49%.
“Full ownership of companies by investors and entrepreneurs will be allowed from June 1, 2021,” the government tweeted. “The amended Law on Commercial Companies aims to strengthen the country’s competitive advantage and is part of the Emirati government’s efforts to facilitate doing business,” Economy Minister Abdallah bin Touq Al-Mari is quoted as saying by the official WAM news agency. Thirteen economic sectors are affected by this provision, including renewable energy, agriculture, transport and e-commerce.
“Attractive travel destination”
According to the minister, this reform will improve the country’s position as an “attractive destination for foreign investors, entrepreneurs and talents” and strengthen its status as an “international economic center”. The UAE is the second largest economy in the Arab world after Saudi Arabia and also has the most diversified economy in the region, thanks in particular to Dubai, whose income is 95% non-oil related. The country ranks 16th in the World Bank ranking for ease of doing business.
To circumvent restrictive laws, several of the seven emirates, notably Dubai, had set up free trade zones where foreigners could own 100% of a company. The Emirates — the top recipients of foreign direct investment in the Arab world — attracted nearly $13.8 billion in 2019, according to the United Nations Conference on Trade and Development (UNCTAD).