On Monday, November 23rd, HH Sheikh Khalifa bin Zayed Al Nahyan, UAE President, announced a proclamation stating that foreign nationals would be allowed 100 percent ownership of commercial companies in the country. All these years, foreign nationals have established their businesses in the UAE with the mandatory requirement of an Emirati sponsor.
Based on the new amendments, businesses can now be fully established by non-Emiratis with a one-year timeline given to comply with the modified law. The timeline may extend under the cabinet’s influence as suggested by the Minister of Economy, Mr Abdulla Bin Touq Al Marri.
The law grants local authorities a set of powers which include setting a set percentage of Emiratis in the capital distribution and company board of directors, approving company establishment requests, and identifying the charges based on the UAE Cabinet-adopted policy.
This, however, does not apply to joint-stock companies. Firms that wish to become a joint-stock company may sell over 70% of the company after authorization from appropriate authorities.
The decree also permits the cabinet to build a committee consisting of representatives for the authorities to suggest activities of strategic influence and the procedures required to license companies working in these areas.
Lastly, it is important to note that the law equips stakeholders to sue a company in civil court over any “failures of duty” that result in potential losses.