We previously reported on the announcement of amendments to the UAE Commercial Companies Law 2015 (as amended) (the "CCL"), which aimed to introduce 100% foreign ownership of companies in the UAE mainland subject to certain requirements.
Federal Decree-Law No. 26 of 2020 (the "CCL Amendment Law") introduced these amendments to the CCL, including the replacement of the requirement for a minimum of 51% of the shares in a UAE mainland company to be held by one or more UAE nationals. The law devolves power to local authorities to determine and implement foreign ownership requirements (i.e. allowing for 100% foreign ownership). The requirement for a UAE national to act as an agent for a branch or representative office of a foreign company in the UAE has also been removed by the CCL Amendment Law. The UAE Ministry of Economy has announced that these foreign ownership amendments are effective as of 1 June 2021.
The Emirates' Departments of Economic Development ("DED") have now released lists of licenced activities that are eligible for 100% foreign ownership under the CCL Amendment Law.
The Dubai DED list is limited to commercial and industrial activities, but with service-related activities excluded at present. The Dubai DED's list of activities is available here.
The Abu Dhabi DED list is limited to commercial and industrial activities, mainly relating to industrial, manufacturing and related service activities. The Abu Dhabi DED's list of activities is available here.
The DEDs have announced that no additional fees, guarantees, capital or similar criteria will be required to attain 100% foreign ownership.
Importantly, 100% foreign ownership is available for new incorporations and existing companies. Foreign investors wishing to amend their UAE company's current shareholding structure in light of the CCL Amendment Law will still need to consider their current shareholding arrangements. This includes the extent to which they are able to take 100% control of their local UAE business and termination of arrangements with their UAE silent partner(s) in accordance with any contractually agreed terms and the relevant legal procedures.
However, we expect that some foreign investors, who place intrinsic value on their UAE national partnership, will to seek to retain their current structure; with 100% ownership not being, but more importantly, their local partnership being, a key component of doing business in the UAE.
Read the original article on GowlingWLG.com
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
