100% Foreign Ownership Permitted in the UAE
The UAE Commercial Companies Law (CCL) has been amended to permit 100% foreign ownership of companies incorporated in the UAE under the CCL, commonly known as “onshore” companies.
The requirement of 51% of the shares in an Onshore Company be held by one or more UAE nationals, being natural or legal persons, has been removed from Article 10 of the CCL
UAE allows 100% ownership of businesses for foreign nationals from 1st Dec 2020 as per the Cabinet Resolution 16/2020.
The legal form of the businesses shall be a LLC or Private Joint Stock Companies (even single owned).
It may be noted that as per Commercial Companies Law, Law No.2 of 2015, foreign shareholding was limited to 49% in a Limited Liability Company (LLC) operating as an onshore UAE business. It required a UAE national or 100% owned UAE national owned company to hold the balance 51% shares.
The cabinet may stipulate activities to be considered of strategic importance and stipulate measures required for their licensing.
It will be interesting to see how the free trade zones (FTZ) position themselves going forward, as their main attraction was their offer of 100% foreign ownership.
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