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About the 100% foreign ownership of the businesses in the UAE

The United Arab Emirates has repealed the need that enterprises have Emirati shareholders, according to the local media report, a major shake-up of foreign ownership law restrictions aimed at encouraging investment into an economy reeling from the coronavirus and a drop in oil prices.

According to the Abu Dhabi-based Native newspaper, the adjustments to the 2015 commercial companies law remove crucial criteria requiring that a firm be chaired by an Emirati national and that the board of directors be majority Emirati.

According to Gulf News, the new regulations are the latest in a series aimed at liberalizing commercial activities in the UAE, where foreigners account for more than 80% of the population. The changes are intended to lower company costs and attract international entrepreneurs who have been put off by restrictions requiring them to give up 51 per cent of their business to locals in order to operate onshore.

Local governments can set specific goals for Emiratis in capital allocation and company boards of directors. Except for joint-stock firms, they can also authorize proposals to form companies.

Firms that want to become joint-stock companies can now sell up to 70% of their capital in initial public offerings, rather than the current 30%.

The legal revisions follow earlier this month’s modifications to personal status and family regulations, which decriminalized unmarried couples’ cohabitation and removed the requirement for obtaining a license to consume alcohol as part of a drive to retain foreign talent and investment.

The elimination of the requirement for onshore enterprises to have local partners will put pressure on the business models of dozens of free zones across the UAE to satisfy foreign companies who are unable to work onshore.

100 % Foreign Ownership


The revised laws will apply to 1061 of the 2300 total economic activities listed in the Department of Economic Development’s list (DED). As a result, about half of all business activities, including trading and manufacturing, are eligible for 100 percent ownership.

However, 100% ownership of a business continues to benefit entrepreneurs in professional services activities. They do, however, necessitate the use of a local service agent and strictly adhere to the sole establishment legal structure rather than the LLC.

Abu Dhabi

Meanwhile, the majority of trading activities in Abu Dhabi still need investors to associate with an Emirati sponsor. As a result, they must adhere to the 51-49 shareholding rule.

Other Emirates

The application of 100 percent business ownership differs from Emirate to Emirate. While the amended restrictions have already been implemented in Dubai and Abu Dhabi, other governments are anticipated to follow suit.

Thank You, Aiswarya Pramod for your article.