The landmark UAE reform allowing foreign investors 100 per cent ownership of businesses has taken effect.
The long-anticipated and widely discussed Foreign Direct Investment Law, which will have game-changing implications on the investment landscape of the nation, was approved by the President of UAE.
As per the new FDI regime, several categories of business licences will no more require Emiratis as sponsors with 51 per cent shareholding rights.
The Vice-President and Prime Minister of the UAE and Ruler of Dubai, said the UAE now enjoys a fertile legislative environment for foreign direct investors in order to enhance the nation’s competitiveness.
Under the earlier companies law, foreign shareholders are restricted to own only up to a maximum of 49 per cent in a ‘limited liability company’ (LLC) operating as an onshore UAE business. The law, therefore, requires an Emirati individual or 100 per cent Emirati-owned company to hold the balance 51 per cent share as a local sponsor.
The new UAE Cabinet Resolution determined the ‘Positive List’ of sectors and economic activities in which the FDI law is permissible and the percentage of ownership is 100 percent in companies outside free zones. However, this remains subject to certain criteria being satisfied.
