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UAE company law: important changes in foreign ownership companies

News Fidinam DMCC

An important amendment of UAE company law is expected to allow 100% foreign ownership in UAE mainland companies, starting from June 1st, 2021.


In accordance with the previous text of the Commercial Companies Law - Federal Law No. 2 of 2015 (CCL) companies set-up on UAE mainland territory were required to have at least 51% UAE national shareholder (the so-called 49-51 rule).
On November 2020, the Government enacted the Federal Decree Law No. 26 of 2020, amending art. 10 of CCL.
On 19th May, press release from the official news agency of the United Arab Emirates (WAM confirmed that pre announced changes in CCL introduced by Federal Decree Law No. 26 of 2020, will come into effect on 1st June, 2021.

Amendment of Commercial Companies Law.

The Decree Law 26/2020, among others, amends Art.10 of the CCL removing the requirement of 51% UAE national shareholder for companies that do not carry out activities with strategic impact.
Activities of strategic impact have to be specified by Resolution of Department of Economic Development of each Emirate; this means that different foreign ownership restrictions could apply in different Emirates.
On 23rd May 2021 Department of Economic Development of Abu Dhabi published a list of 1.105 registered commercial and industrial activities, in which non-UAE citizens have the right to own economic license and establish commercial companies with full 100% ownership.
( https://www.added.gov.ae/Our-Initiatives/Foreign-Ownership )
As of today, the Department of Economic Development of Dubai has yet to define activities that allow 100% foreign ownership.

We will constantly monitor announcements from Department of Economic Development in order to understand when and how law amendments shall have practical effects.


The amendment of art. 10 of CCL is a huge change for UAE business environment and once fully implemented it will define a new framework for set-up business in UAE, with Free Zone Authorities that will be forced to improve efficiency and competitiveness since investors willing to keep 100% ownership shall have the freedom to set-up their business either in mainland territory or within any of the several Free Zones.

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