#UAE Allows Full Foreign Ownership of Firms to Boost Economy - Bloomberg

UAE Allows Full Foreign Ownership of Firms to Boost Economy - Bloomberg

The United Arab Emirates abolished the need for companies to have Emirati shareholders, local media reported, in a major shake-up of foreign ownership laws aimed at attracting investment into an economy reeling from the coronavirus and a decline in oil prices.

The amendments to the 2015 commercial companies’ law remove key provisions requiring that a company be chaired by an Emirati national and for the board of directors to be majority Emirati, the Abu Dhabi-based newspaper said, citing changes issued by the country’s president. The government amended 51 articles and introduced three new ones in total. The rules come into effect on Dec. 1, according to Gulf News.

The changes are the latest in a series of measures aimed at liberalizing business activity in the UAE, where foreigners comprise more than 80% of the population. The amendments are designed to reduce costs for companies and attract foreign entrepreneurs often put off by regulations demanding they hand 51% of their business to locals in order to operate onshore. Economic free zones have been established across Dubai and other emirates over the years to help satisfy foreign companies unable to work onshore.

“This was always a sensitive topic given the easy ‘rents’ derived by locals for their passports,” said Tarek Fadlallah, the chief executive officer of Nomura Asset Management’s Middle Eastern unit. “Passing it is potentially a big moment but let’s see the extent of the implementation and the sectors impacted.”