The United Arab Emirates (UAE) has made a law reform that allows foreign ownership of some onshore enterprises to be 100%. A change to the Commercial Law (CCL) went into effect on June 1, 2021, allowing 100 percent foreign ownership of UAE mainland companies.

The modified CCL eliminates the requirement for a minimum of 51% UAE ownership in UAE mainland enterprises. As a result, mainland UAE enterprises (both current and new) can be 100 percent foreign-owned as of June 1, 2021, subject to receiving particular authorization from the relevant authorities in each emirate.

The requirement that one or more UAE citizens, whether natural or legal persons, control at least 51 percent of the shares in an Onshore Company has been removed from Article 10 of the CCL. Foreign ownership restrictions are a major source of concern for foreign investors, notably private equity and venture capital funds, and they make Onshore Company investments more complicated and difficult. Without the use of nominees or similar structures, foreign investors can now own and govern Onshore Companies, saving time, money, and legal risk.

Furthermore, formerly required to be entirely held by UAE nationals, single-shareholder entities can now be 100% owned by foreign investors.

\”Dubai Best Lawyers\” would be delighted to assist clients in considering and reviewing their current ownership and governance arrangements to assess the impact of the modified CCL on their firm, as well as discussing investment options.

If you have any questions, opinions, or comments about this update or anything else related to the law like Financial Law, Criminal Law, Corporate Law, Commercial Law, etc. please feel free to contact us.