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.
Under current UAE law, foreign shareholders can own a up 49% of a locally registered company, with a local partner holding the 51% majority.
We can now expect an unprecedented explosion of foreign direct investment in Dubai and Abu Dhabi."
However, several sectos deemed strategic are exempt from the new rules announced today. These include energy and hydrocarbons, telecommunications and transport.
Nonetheless many welcomed the new rules as "landmark reforms." Nigel Green, the CEO and founder of Dubai-based deVere Group said the changes will prompt an "unprecedented explosion" of foreign direct investment.
Under the new legislation, the UAE will allow 100% ownership of businesses for foreign nationals from 1 December 2020. Previously, all businesses were required to have a UAE citizen sponsor.
Green notes: "Dubai and Abu Dhabi are already recognised as two of the most powerful business and financial hubs in the world by international investors who are lured by the incredible possibilities offered in terms of finance, trade and commerce, plus the famous 'can do' attitude and the low tax environment in these destinations.
"This appeal has just sky-rocketed further due to the reform of the business ownership law, which now permits businesses to be fully owned by foreign nationals."
"We can now expect an unprecedented explosion of foreign direct investment in Dubai and Abu Dhabi and they will further cement their growing status as major international financial centres," Green added.