The UAE has allowed foreign nationals to have 100% ownership of the business. This will start on December 1, 2020. This is the new law change under the authority of President His Highness Sheikh Khalifa Bin Zayed Al Nahyan. This amends the law number 2 of 2015 active on companies and shareholdings. It is a long-awaited wish of many foreign nationals who were only able to act as part-owners.
The 100% ownership is in line with cabinet Resolution No. 16 of 2020. In recent years the emirates permitted the foreign nationals to own the companies gradually. The latest amendment will allow them to take complete ownership.
Moreover, the latest law has also amended fifty-one articles and new ones have got added. This mainly focuses on management of provisions of the companies with fewer liability shareholdings.
Vice-President and Prime Minister of the UAE and Ruler of Dubai, His Highness Sheikh Mohammed Bin Rashid Al Maktoum shared about the amendments of the law. He said that now UAE has paved a way to enhance the competitiveness in business. The country is now able to enjoy the fertile legislative environment for the development of business.
Starting the committee
In the amended law of article No.10, a law committee will get formed as per the decision of the cabinet. It will consist of the representatives from good agencies. This will focus on the companies that take part in activities of great importance. The cabinet will them decide whether to license the companies. This is how the new rule will get put in action.
An important update
According to the Commercial Companies Law and under that Law No. 2 of 2015 the foreign shareholders only got limited ownership of the company. It got operated as the onshore UAE business. This led to the Emirati individual or an Emirati company to own half of the company as a local sponsor.
But this amended law will allow the foreign owners to get full ownership of the companies without the requirement of a specific nationality. However, this law does not apply to some companies as the cabinet will take a decision.
- The new amendment will permit the non-joint stock companies to take part in investment activities in the place of third parties if the rules allow it.
- The amendments contain some provisions for maintaining the business of a company with fewer liabilities.
The UAE Minister of Economy, Abdullah bin Touq Al-Marri told that the new rule is a step that will benefit the UAE commercial development. It will help in the competitiveness of the business environment of the country. This is in line with the developments in the economy and also the future changes. Moreover, it has opened the way for more opportunities in the business world.
Conclusion
The experts say that the new amendment is a momentous change in UAE. The whole world is talking about its new rules. This will certainly attract foreign investors as they do not require a local shareholder now.
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