-
The move is geared to attract more foreign direct investment to the UAE
-
Cap on shares a company can float on one of the UAE’s stock markets increased from 30% to 70%
The United Arab Emirates has amended the Commercial Companies Law allowing foreign investors and entrepreneurs to establish and fully own onshore companies. The new law will come into effect on June 1.
The amendment, which was recently adopted by the UAE government, is geared to attract more foreign direct investment to the Gulf country.
“The amended Commercial Companies Law aims at boosting the country’s competitive edge and is a part of the UAE government’s efforts to facilitate doing business,” Minister of Economy Abdulla bin Touq Al Marri said.
He added that the amendment will boost the UAE’s appeal as an attractive destination for foreign investors and entrepreneurs.
The minister also hoped that the move will strengthen the country’s position as an international economic hub and encourage the flow of investments to the country’s vital economic sectors.
The amendment has also increased the cap on shares a company can float on one of the UAE’s stock markets from 30% up to 70%. Other changes include amending the scope and nature of directors duties, how to convene shareholder meetings, managing disputes with directors and shareholders, enabling recapitalisation of companies in financial distress.
Foreigners, however, will be barred from investment in “Activities of Strategic Effect” – sensitive activities which should be kept within some degree of local ownership protection.
A previous foreign investment law in 2018 allowed foreigners to own up to 100% of only some businesses. Foreigners could already own up to 100% of those registered in designated business parks known as “free zones”.
