The UAE will allow foreign investors to own the entirety of a business with an amendment to the 2015 commercial company law issued by sheikh Khalifa Bin Zayed Al Nahyan.
The changes will be effective from 1 December 2020.
Up until now, foreign nationals looking to set up business in the UAE were required to have local individuals working as sponsors, and they were limited to holding a maximum of 49% shareholding in a “limited liability company”.
Those that wanted to acquire the remaining stakes had to apply to individual emirates, which decided on the matter on a case-by-case basis.
Under the amended law, not every business will be able to be fully owned by foreign nationals, as there are some companies that can be excluded according to decisions taken by the UAE cabinet, as well as those that are either wholly-owned by federal or local governments or their subsidiaries.
Nigel Green, founder and chief executive of the DeVere Group, said: “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.
“This is especially the case after the UAE government in September changed legislation so that expatriates are now legally able to remain in the country long after they retire.”