UAE allows 100% company ownership for foreign nationals

  • Better Informed
  • 24 Nov, 2020
UAE allows 100% company ownership for foreign nationals

What are these new laws? 

The UAE government has just announced that foreign investors can now own 100% of a business on the mainland as of December 1st 2020. These new laws and amendments, which were brought about by President His Highness Khalifa Bin Zayed Al Nahyan, focused on the regulations of limited liability shareholding, meaning that expatriates looking to set up or own a business in the country, will no longer need an Emirati sponsor nor minimum percentage ownership from them. There are, however, certain exemptions to these new laws. The changes will not apply to particular companies that have been specifically excluded by the government, those that are owned by either federal or local governments and their subsidiaries, as well as companies in sectors that are deemed strategic, such as oil and gas, utility, and transport. 


What has changed?

Until now, foreign investors in the UAE could only have a maximum of 49% ownership in a mainland company, although the government has, in recent years, been making moves towards these changes, with individual emirates allowing foreign national owned companies to take over the remaining shares on a case by case basis. Foreigners have also been able to obtain 100% company ownership within designated business areas, known as free zones. Whilst it may be thought that these new laws will have a negative impact on free-zones, as previously, these were the only areas that allowed 100% foreign ownership, these economic areas still have many other advantages, such as no duty on imports or exports. 


How will this affect the market? 

These reforms demonstrate the strides the country is making in retaining its position as a leading business hub, both regionally and globally, as well as showing its willingness to diversify its economy by embracing the contributions that foreign investors can make. The new changes will not only help reduce operating costs for companies but will help facilitate business dealings in the region considerably. This will surely attract new foreign investment, allowing for greater revenue streams into the country. Richard Waind, Managing Director of Betterhomes, said “This is another very welcome step taken by the leadership of the UAE to bolster inward investment and growth of the economy. 100% ownership gives foreign business owners the confidence to invest their time and money into growing businesses in the UAE.”

These changes have come after a succession of new laws which have granted greater freedoms to expatriates, with Richard further saying that “while some countries have responded to the current pandemic by turning inwards, the UAE is leading the way with an outward-looking and tolerant approach to welcome business and residents to the Emirates”. This year already, the government has introduced new retirement visas for foreigners, as well as new work-from-home visas, allowing workers from abroad to live and work temporarily in the country. Richard also said that “this approach will ensure the UAE benefits fully from the global recovery post-pandemic”. The reforms just further show how the country is moving forward in truly creating a thriving multi-cultural centre. 

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