Foreign investment opportunities expand in the United Arab Emirates

Shares in companies incorporated in the United Arab Emirates (“UAE”) may now be owned by foreign investors with no limit on the percentage of a company’s share capital that they may hold, subject to Federal restrictions protecting strategic sectors and applicable Emirate-level requirements. 

The long-standing foreign ownership restriction which required a UAE company to have not less than 51 per cent. of its share capital owned by UAE nationals, set out in Article 10 of Federal Law No. 2 of 2015 on Commercial Companies, has been repealed by Federal Decree-Law No. 26 of 2020. This law also repeals Federal Law No. 19 of 2018 regarding foreign direct investment, which had allowed foreign investors to own up to 100 per cent. of the share capital in UAE companies operating in certain sectors (set out in the “Positive List” issued in March 2020), subject to licensing requirements. 

The new foreign investment regime came into force on 1 June 2021, as per an announcement of the UAE Minister of Economy.