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 trade 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.
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
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