- UAE scrapped the need to have UAE nationals as sponsors, thus allowing expatriate (a person residing in a country other than their native country) investors 100% ownership with effect from December 1, 2020.
- The new law amended 51 articles and added new ones, mostly focusing on the regulation of provisions of establishing companies with limited liability shareholding.
- The move was in line with a federal law issued by President His Highness Sheikh Khalifa Bin Zayed Al Nahyan and which amended Law No. 2 of 2015 on companies and their shareholding.
- The long-awaited 100% ownership by foreign nationals of companies licensed and registered in the UAE was allowed by Cabinet Resolution No. 16 of 2020.
- The decree, in addition, supersedes the UAE Federal Law No. 19 of 2018 on Foreign Direct Investment (FDI Law).
- It also includes certain provisions and regulations related to limited liability and joint stock companies aimed at attracting foreign capital and further boosting the local economy.
- The decree grants relevant local authorities a set of powers, including setting a specific percentage of Emiratis in the capital allocation and boards of directors of companies, approving requests to establish companies -except for joint stock companies- and identifying fees & charges according to the policies adopted by the UAE Cabinet.
- The new amendments allow non-joint stock companies to engage in investment activities on behalf of third-parties if laws governing these activities allow it.
- The amendments included some provisions for organising the business of a company with limited liability and also one-person entities.
Minister of Economy welcomed the new move
- Abdullah bin Touq Al Marri, UAE Minister of Economy, said the new decree is an additional step in a series of efforts that the UAE is taking to raise the readiness of the national economy and prepare for the future by developing commercial and investment opportunities and increasing the competitiveness of the business environment, in line with the rapid economic changes and developments taking place in the global economy.
- His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, announced the amendments to the law, noting that the UAE now enjoys a fertile legislative environment for the establishment of businesses in order to enhance the UAE’s competitiveness. The amended law allows natural and legal persons to establish companies without the need for a specific nationality. The law, however, will not apply to some companies that are excluded based on decisions by the Cabinet and those that are either wholly-owned by federal or local governments or their subsidiaries.