UAE opens up the economy, allows 100% foreign ownership of firms: Report

In a major shake-up of foreign ownership laws aimed at attracting investment into an economy reeling from the coronavirus and a decline in oil prices, the government of the United Arab Emirates announced by decree today that foreign investors can fully own local companies without the need for an Emirati sponsor.

Sheikh Khalifa bin Zayed Al Nahyan, president of the UAE, issued the decree, which replaces the Commercial Companies Law No. 2, passed in 2015.

Until now, companies in the UAE had needed a certain shareholding to be held by Emirati nationals, or an Emirati agent, depending on what type of company it was.

“The amendments allow foreign entrepreneurs and investors to fully establish (own 100 per cent) and own companies without any nationality requirements,” state news agency WAM said.

“The condition requiring a foreign company wishing to open a branch in the country to have an agent from among the country’s citizens has also been cancelled,” it added.

The UAE approved a new foreign investment law in 2018 that would allow foreigners to own up to 100% of some businesses and foreigners could already own up to 100% of those registered in designated business parks known as "free zones".

As an oil and gas producer, the UAE economy has been hit by the coronavirus pandemic and low oil prices, prompting the International Monetary Fund to forecast in October that the Gulf`s second-largest economy could shrink by 6.6% this year.

(With inputs from agencies)