With an aim to attract investment into an economy reviving from the coronavirus and a decline in oil prices, major changes in foreign ownership laws has been made by the government of the United Arab Emirates. An order was announced today that foreign investors can fully own local companies without the need for an Emirati sponsor. The Commercial Companies Law No. 2, passed in 2015 will be replaced by the new law passed by the UAE President Sheikh Khalifa bin Zayed Al Nahyan.
As per the previous law, companies in the UAE mandated a certain shareholding to be held by Emirati nationals, or an Emirati agent, depending on the type of company. “The amendments allow foreign entrepreneurs and investors to fully establish (own 100 per cent) and own companies without any nationality requirements,” state news agency has said. The UAE approved a new foreign investment law in 2018 that would allow foreigners to own up to 100% of some businesses and foreigners could already own up to 100% of those registered in designated business parks known as "free zones", the report added.
Being one of the largest oil and gas producer, the UAE economy has been hit drastically by the coronavirus pandemic and low oil prices, induced the International Monetary Fund to forecast in October that the Gulf`s second-largest economy could shrink by 6.6% this year.
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