29 November, 2020
UAE Allows Full Foreign Ownership of Firms as Economic Impetus
The UAE Government allowed full ownership of firms by foreign expats, in a bid to provide a shot in the arm to the economic prospects of the country.
As part of the recent structural and regulatory amendments made to the 2015 commercial companies’ law, the requirement for a local Emirati entity (or individual) to be a 51% local business partner will be scrapped. This amendment is expected to come in force from December 1st, 2020.
Past history shows that when radical changes are brought in, there would be some conditional requirements that may be put in force along with the regulatory change. The full transition on the implementation level is likely to take close to 6 – 12 months.
With foreigners accounting for over 80% of the population, the change in commercial companies’ law is expected to liberalize the economy and make the economy much better in the ease of doing business. For expats who are used to handing over 51% of their onshore entity ownership to a local business partner, this amendment is expected to bring in a surge in FDI influx.
Along with presidential decree bringing changes in civil law, business inheritance and penal codes, the amendment to commercial companies’ law will serve as a strong base for strengthening the position of Dubai as a business and residential destination for all nationalities.