A legislative amendment that allows 100% foreign ownership of some onshore enterprises has been implemented by the United Arab Emirates (UAE). The amendments to the UAE Commercial Companies Law, which were published on 30 September 2020, removed the requirement for a UAE national to own at least 51 percent of the shares in the capital of a UAE company, subject to some restrictions. For most activities, the amendments also removed the requirement for foreign company branches in the UAE to appoint a UAE national agent.

“The changes to the UAE Companies Law and the publication of these positive lists represent a significant change in the UAE\’s foreign ownership restrictions,” said Mohammad Tbaishat of Pinsent Masons, the law firm behind Out-Law.

While these changes do not automatically entitle existing UAE companies to convert to 100 percent foreign ownership, it is anticipated that many of these businesses will give this careful thought. Whether or not an existing business can transition to 100 percent foreign ownership will be determined in large part by its relationship with its UAE shareholder and the existing written agreements in place between the parties to facilitate this.

There are some unanswered questions about the changes and how they will be implemented by the relevant authorities, which may take some time to resolve.