Helpxpat News: The UAE has scrapped the need to have UAE nationals as sponsors, thus allowing expatriate investors 100 per cent ownership with effect from December 1, 2020. The move is in line with a federal law issued by President His Highness Sheikh Khalifa Bin Zayed Al Nahyan and which amends Law No. 2 of 2015 on companies and their shareholding.
The long-awaited 100 per cent ownership by foreign nationals of companies licensed and registered in the UAE is allowed as per Cabinet Resolution No. 16 of 2020. In recent years, individual emirates allowed foreign national owned companies to acquire the remaining stakes on a case by case basis. The latest amendment thus extends the scope of that significantly.
Under the existing CCL, foreign shareholders are restricted to own only up to a maximum of 49 per cent in a ‘limited liability company’ (LLC) operating as an onshore UAE business. The law, therefore, requires an Emirati individual or 100 per cent Emirati-owned company to hold the balance 51 per cent share as a local sponsor.
The new law has amended 51 articles of CCL and added new ones, mostly focusing on the regulation of provisions of establishing companies with limited liability shareholding.
The UAE Cabinet Resolution in March 2020 determined the ‘Positive List’ of sectors and economic activities in which the FDI law is permissible and the percentage of ownership is 100 per cent in companies outside free zones. However, this remained subject to certain criteria being satisfied.