UAE to allow 100% foreign business ownership: Key points to note

UAE to allow 100% foreign business ownership: Key points to note

The UAE announced on Monday that foreign nationals will now be allowed to own 100 per cent of commercial companies within the country, eliminating the need for a UAE national to hold the majority share.

The changes made to federal law No. 2 of 2015 of the Commercial Companies Law are expected to take effect from December 1, 2020.

The move is anticipated to bring about a fundamental change in how business is conducted in the UAE and attract more foreign investors.

Read: Foreign nationals permitted 100% business ownership in the UAE

In a note, law firm BSA Ahmad bin Hezeem and Associates highlighted some of the key points relating to the development:

* There will no longer be a need to have an Emirati national as a majority shareholder (51 per cent) in onshore companies, nor will the company need to have a UAE national or local company as its registered agent.

* A major impact is expected on the liquidity of the local capital market, as companies wishing to go public can now sell up to 70 per cent of their shares in an IPO, instead of the previously applicable limit of 30 per cent.

* The changes will not be applicable to strategically