UAE to Allow 100% Foreign Ownership of Companies in June

 In Industry News

On Wednesday 19 May, the UAE’s Ministry of Economy announced on the government’s Twitter account that non-Emirati investors and entrepreneurs will be permitted to fully own a business based in the UAE starting from 1 June 2021. The UAE announced the law allowing 100% foreign ownership of companies in November last year and it anticipated to come into effect in April 2021, however, it is not clear what has caused the delay.


The amendment allows non-Emirati natural and legal persons to establish and own 100% shares in their companies. However, the law will not apply to some companies that will be excluded based on the UAE cabinet’s decision and also companies either wholly-owned by federal or local governments or their subsidiaries will fall outside the scope of the changes.


Currently, as per the Commercial Companies Law 2015, companies are required to have a local majority shareholder who owns at least 51% or 100% UAE-owned company to act as local sponsor in a limited liability company operating as an onshore UAE business.

A previous foreign investment law in 2018 allowed foreigners to own up to 100% of some businesses however requires having a local service agent (Emirati national) who would not have any shares but would be remunerated as part of the business setup agreement. Foreigners could already own up to 100% of those registered in designated business parks known as “free zones”.

Abdulla bin Touq Al Marri, the Minister of Economy, said: “The amended Commercial Companies Law aims at boosting the country’s competitive edge and is a part of UAE government’s efforts to facilitate doing business.”


In light of the above, all companies are advised to seek legal advice to review their constitutional documents, existing structures and whether their contractual arrangements with local nominee shareholders may be terminated to ensure they are able to smoothly transition to 100% ownership.


THINC is at the forefront of these important developments and continues to monitor regulatory updates as they arise. Please contact us if you have any questions or concerns regarding the amendment, its practical implications or you have any questions with respect to structuring your business in the UAE going forward.

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