UAE allows private firms to have full international ownership
As part of the continuing efforts of the government to maintain a conducive regulatory atmosphere and open up the economy to all nationalities, President His Highness Sheikh Khalifa bin Zayed Al Nahyan has released a decree revising the regulations on international ownership of commercial firms.
International ownership will give a huge boost to the economy
The declaration, which makes extensive changes to UAE Federal Law No. 2 of 2015 on Commercial Companies, annuls the provision for commercial companies to have a major Emirati shareholder or representative, giving onshore companies maximum international control. Under the new amendments, undertakings of all nationalities will now be entirely formed by non-Emiratis. With undertakings now requiring a limit of one year to comply with the amended law from the time their articles become valid. As suggested by the Minister of Finance, which may be expanded under a cabinet resolution.
Furthermore, the declaration supersedes the UAE Federal Law No. 19 on Foreign Direct Investment (FDI Law) of 2018. It also contains some limited liability clauses and legislation and joint stock companies aimed at drawing international capital. It’s also going to improve the local economy further.
A better future for business in the UAE
The declaration grants a collection of powers to the relevant local authorities, including the creation of a certain percentage of Emiratis on the allocation of capital and on the boards of directors of companies, the approval of proposals for the setting up of companies, with the exception of joint stock companies, and the recognition of fees and charges in compliance with the policies introduced by the Cabinet of the UAE.
Important adjustments include the fact that businesses wanting to become joint stock companies can sell no more than 70% of the business. This is instead of the existing 30%, via IPOs, after the approval of the competent authorities.
The decree authorizes the cabinet to set up a committee containing members of the competent authority. With a view to recommending ‘strategic effects’ operations and the steps appropriate to license companies operating in those regions. The Cabinet shall, on the advice of the Commission, determine the strategic effect of the operations to be under review. Also the appropriate steps for the licensing of those firms.
Under the latest changes, electronic voting at general assembly sessions is also allowed.