The UAE Ministry of Economy has made a very important announcement on Wednesday stating that the new Commercial Company Law with regards to 100 per cent Foreign Ownership will be effective from June 1, 2021.
The new law will enable companies to apply for business licence without the requirement of UAE National as the partner of the company.
Abdulla Bin Touq Al Marri, Minister of Economy, said, “The amended Commercial Companies Law aims at boosting the country’s competitive edge and is a part of UAE government efforts to facilitate doing business.”
Bin Touq added that the amendments introduced by the new Commercial Companies Law will boost the UAE’s appeal as an attractive destination for both foreign investors, entrepreneurs and talents. It will further strengthen the country’s position as an international economic centre and encourage the flow of investments to the country’s vital economic sectors.
The changes are part of a series of measures introduced to make the UAE a more investment-friendly destination, which have also included the offer of 10-year visas for investors and citizenship for Investors and talented professionals.
According to the announcement, all the existing business in the mainland can amend their licence according to the new Commercial Companies law.
On 23rd November 2020, the President of the United Arab Emirates, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, issued a long-anticipated ground breaking decree “Federal Decree Law No. 26 of 2020”, amending the restrictions on foreign ownership within the Companies Law in the United Arab Emirates. The newly issued decree amended the pertinent provisions of the UAE Federal Law No. 2 of 2015 and supersedes the UAE Federal Law No. 19 of 2018 on Foreign Direct Investment (FDI Law). From that point onwards, Ministry of Economy was working on widening the scope of sectors from 3 and finalising the sectors to be included in the scope. Last month, Ministry of Economy made an announcement that they are working on a new legislation to add 10 more business sectors to the commercial Company law.
As per the new law, many categories of business licence will no longer require UAE National as a 51 per cent shareholder of the company. Moreover, the mandatory requirement of having the Local Service Agent will also be no longer applicable as per the new Commercial Company Law.
However, there are exceptions for a few businesses operating in sectors that are strategically important to the UAE. The new decision is not applicable for companies wholly owned by Federal or local Government or their subsidiaries.
Paras Shahdadpuri, Chairman, Nikai Group of Companies talking to Gulf Today said: I must congratulate the visionary leadership of the UAE who have come up with the most important initiative in making changes to the Company Commercial Law.
This is the biggest master stroke I have seen in my three decades of business in the UAE of allowing 100 per cent ownership for the businesses. As is widely known, expatriates have been investing 100 per cent amounts in their businesses but have had to write in their licence 51% investments in the name of our Emirati brothers. The investors always felt the threat of the Sword of Damocles and could never bring in more investment freely.
“Being the former Chairman of Indian Business Council and other economic fora, we have been talking with various top UAE authorities for about 15 years and I am personally extraordinarily happy that my representations have ultimately borne fruit.”
Dr Sanjay Tolani, MD and CEO of Goodwill World, said: “Having 100 per cent ownership increases the faith of investing into SME businesses and will attract more funding for innovative startups, as well as increase the investment from foreign funds into buying stake within old expat family businesses which have established UAE as their base of operations.
“One of the most amazing growth story will be witnessed with the relaxation of these ownership laws, driving further confidence into the business environment of the UAE.”
“It is the perfect time to start exploring more business opportunities within the region with keeping UAE as the base of all investment.” Tolani concluded.
Roberto d’Ambrosio, Chief Executive Officer, Axiory Global, said: I firmly believe that the amendments to the Commercial Company Law are definitely a step in the right direction in enhancing the UAE position as a Global business hub, confirming the outstanding strategic savviness of the UAE leadership.
“In a truly diverse and cosmopolitan environment such as the UAE, already attracting some of the best talents from all over the world, such move can really project the jurisdiction among the most palatable for global investors, which will now be able to enjoy carrying on their business within a familiar legal framework and having the comfort of the full control of their business. I believe that the impact of such changes will be well visible right in the short term, boosting the outstanding ongoing recovery from the Pandemic crisis.”
0 comments