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MEDIA / Blog / UAE Commercial Company Law Revisited
Many countries in the Middle East limit company control to locals. Foreigners can only have up to 49 percent ownership. For nearly 30 years, the UAE has operated free zones where foreigners can own 100 percent of the company. However, the activities of those companies are restricted to the free zone or outside the UAE. In the last ten years, it was often announced that the limitation on ownership for mainland companies will be lifted or at least changed.

It was always expected that such a change will take place in the next six months. This time it was announced that an amended UAE Commercial Companies Law will be enacted before the summer of 2015. However, the change for foreigners is not substantial, as the 51/49 rule will continue. However, it is possible to apply for an exception to be granted by the Cabinet of Ministers. Full foreign ownership of companies outside free zones might be provided for sectors which have a strategic importance for the country. This should encourage innovation and technology transfer. Such companies must provide support or expertise to sectors identified by the government as strategically important. Those sectors have not been defined yet but it is to assume that it will include education and healthcare. The new law will allow limited liability companies (LLC) to be owned by one person. Currently a minimum of two persons are needed to own a LLC in the UAE. Single owners were restricted to sole establishments.

The Ministry of Economy also announced that the country aims to reduce its dependence on oil revenues to below 10 percent of the gross national product in the upcoming years. The UAE also wants to be among the top ten countries in the World Bank’s ease of doing business index. In the 2015 index it ranked 22nd globally.

Our director in Dubai, Mr Costas Ioannou would be happy to discuss and clarify any matters that you may have.

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