100 % FOREIGN OWNERSHIP OF MAIN LAND COMPANIES IN UAE

December 2, 2020by Admin0

Traditionally, setting up a business in UAE mainland required a local partnership. Only Free Zone entities were allowed 100% foreign ownership. A recent announcement has radically changed the business landscape of UAE, allowing 100% foreign ownership in UAE mainland businesses. Investments in certain sectors and economic activities will benefit from this new
scheme.

Related Services: General Corporate and Commercial Advisory, UAE Startup Services, Company Formation
As per Commercial Companies Law No. 2 of 2015, a UAE national must own at least 51% in a mainland license. However, Federal Law No. 19 of 2018 on Foreign Direct Investment and Cabinet Resolution No. 16 of 2020, allows 100% foreign ownership without any local participation in a total of 122 sectors and economic activities across UAE mainland referred to
as the ‘Positive List’. Some of the major sectors which are open to 100% ownership through ‘Positive List’ are as
follows:

  • Agriculture Sector – 19 activities.
  • Industrial Sector – 51 activities
  • Service Sector – 52 activities.

You may download Cabinet Resolution No. 16 of 2020 by clicking the following link

https://www.economy.gov.ae/Documents/Cabinet%20Resolution%2016%20Concerning%20the%20

Determination%20of%20the%20Positive%20List.pdf for accessing the entire list of 122 sectors in

which 100% ownership is allowed.

Guarantees:

Following are the benefits and guarantees assured to Foreign Direct Investment (FDI)

Businesses:

  • 100% ownership
  • FDI business are treated just like national companies
  • Right to benefit from real estate allocated to the FDI Businesses
  • Easy repatriation of annual business profits, proceeds of liquidation of investment or sale of the business, proceeds derived as a result of settlement of disputes out of the Country
  • Easy procedures to add partners, transfer ownership, amend incorporation documents or company legal form or to go for mergers or acquisitions
  • No expropriation of FDI businesses without fair compensation;
  • No to seize, confiscate, freeze or restrict FDI business without a valid court order.
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It is worth noting that existing companies can also benefit from these changes.

There is also a negative list, specifying sectors restricted from 100% ownership, as below:

Oil exploration and production

  • Investigation, security and military related
  • Banking and financing
  • Insurance
  • Pilgrimage and Umrah services
  • Certain recruitment activities
  • Water and electricity provision
  • Fishing and related services
  • Post, telecommunication and other audio-visual services
  • Road and air transport
  • Printing and publishing
  • Commercial agency
  • Medical retail (including pharmacies)
  • Blood banks, quarantines and venom/poison banks

If you would like to find out more by contacting us, please feel free to write to office@atblegal.com or contact us at https://atblegal.com/contact-us.php Authors: Asha Bejoy & Jose Joseph

All rights reserved: https://atblegal.com/

About ATB Legal

ATB Legal is a full-service legal consultancy in the UAE providing services in dispute resolution (DIFC Courts, ADGM Courts, mainland litigation management and Arbitrations), corporate and commercial matters, IP, business set up and UAE taxation. We also have a personal law department providing advice on marriage, divorce and wills & estate planning for expats. Please feel free to reach out to us at office@atblegal.com for a non-obligatory initial consultation.

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