Come June 1, 2021, the UAE will be allowing for full company ownership for non-Emirati investors and entrepreneurs.
The UAE government has amended its Commercial Companies Law to allow full company ownership of UAE businesses to foreign investors and entrepreneurs, according to a Ministry of Economy announcement reported by state news agency WAM.
The decision was “a new step that reflects the importance that the UAE government attaches to supporting the economy and enhancing its preparedness for the future,” the UAE government said in a tweet on May 19.
COMPANY OWNERSHIP CHANGES IN THE MAKING SINCE 2020
The amendment was first announced in November last year through a decree by UAE President Sheikh Khalifa bin Zayed Al Nahyan.
The government has since widened the scope of UAE businesses covered by the amendment to include 10 new strategic sectors, according to local papers. License requirements for these sectors will no longer call for Emirati sponsors to hold a 51% stake in onshore companies. Certain UAE businesses, such as oil and gas, telecom, and banking, will not be covered by the new amendment.
A committee of Department of Economic Development representatives is expected to share further information in the days to come, local papers suggest.
Minister of Economy Abdulla bin Touq Al Marri said that the amendment was aimed at bolstering the UAE’s “competitive edge” and facilitating business in the country. The minister added that the move would make the UAE a more attractive business destination for foreign investors, entrepreneurs and talent.
“It will further strengthen the country’s position as an international economic centre and encourage the flow of investments to the country’s vital economic sectors,” the minister also said.
SURGE IN FDI MORE GOOD NEWS FOR UAE BUSINESSES
The UAE’s FDI inflows grew 44.2% in 2020, reaching USD 19.88 billion, a recent Ministry of Economy report announced. FDIs in 2019 amounted to USD 13.4 billion.
Investment partnerships between ADNOC and foreign businesses contributed heavily to this development. The report further stated that FDIs inflows were directed towards several technologies, including artificial intelligence, Internet of Things, blockchain, augmented and virtual reality, robotics, autonomous automobiles, renewable energy, agritech, and healthtech.
Outflows touched $9.2 billion, covering aviation, transportation, mining, renewables, real estate, construction, communication, oil and gas, logistics, ports and infrastructure, tourism, leisure, banking, and agriculture.
Commenting on the FDI numbers, more measures to “strengthen the investment landscape and grow investor confidence in priority sectors,” could be expected, bin Touq Al Marri said.
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