The UAE Ministry of Economy made a significant statement on Wednesday, indicating that the new Commercial Company Law allowing for 100% foreign ownership would go into implementation on June 1, 2021.

The new rule would allow corporations to apply for business licenses without the need for a UAE national as a partner.

“The modified Commercial Companies Law intends to strengthen the country's competitive advantage and also is part of the UAE government's efforts to facilitate conducting business,” said Abdulla Bin Touq Al Marri, Minister of Economy.

Bin Touq went on to say that the changes brought about by the new Commercial Companies Law will increase the UAE's attractiveness as a destination for international investors, entrepreneurs, and expertise. It will boost the country's standing as an international economic hub and encourage investment in the country's important economic sectors.

The revisions are part of a slew of initiatives aimed at making the UAE a more appealing investment center, including the provision of 10-year visas for investors and citizenship for investors and skilled professionals.

As per the notification, all current businesses on the mainland will be able to alter their licenses following the new Commercial Companies Law.

On November 23, 2020, the President of the UAE, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, issued a long-awaited ground-breaking proclamation, “Federal Decree-Law No. 26 of 2020,” modifying the limits on foreign ownership under the UAE Companies Law. The recently released decree changes and overrides the relevant section of UAE Federal Law No. 2 of 2015 and The UAE Federal Law No. 19 of 2018 on Foreign Direct Investment is repealed (FDI Law).

From such a point forward, the Ministry of Economy worked on expanding the scope of sectors from three to four and finalizing the sectors to be included in the scope. The Ministry of Economy announced last month that they are working on the new legislation to include ten more company areas in the commercial Company statute.

As per the new law, certain types of business licenses would no longer need a UAE national to be a 51% stakeholder of the company. As per the new Commercial Company Law, the statutory necessity of having a Local Service Agent will no longer be relevant.

There are some exceptions for a few enterprises functioning in vital industries for the UAE. The new judgment does not apply to firms that are entirely controlled by the federal or municipal governments, or their affiliates.

In an interview with Gulf Today, Paras Shahdadpuri, Chairman of the Nikai Group of Companies, stated, "I must thank the progressive leadership of the UAE that have come up with the most crucial approach in making amendments to the Company Commercial Law."

Allowing 100% ownership for firms is the ultimate brilliant strategy I have witnessed in my three decades of doing business in the UAE. As is popularly known, foreigners have been spending 100% of their earnings in their enterprises, but have had to declare in their licenses that they have 51% of their assets in the name of our Emirati brethren. The investors were always threatened by the Sword of Damocles and could never freely introduce new investments.

“As the previous Chairperson of the Indian Business Council and other economic fora, we have been meeting with various senior UAE officials for almost 15 years, and I am personally extremely glad that my suggestions have now paid off.”

“Having 100% ownership boosts the trust of investing into SME enterprises and will draw more capital for new startups, and also boost investment from foreign funds into purchasing interest inside existing foreign family firms that have established UAE as their base of operations,” said Dr. Sanjay Tolani, MD, and CEO of Goodwill World.

“With the loosening of these ownership regulations, one of the most incredible growth stories will be observed, boosting higher confidence into the UAE's business world.”

“It is an excellent moment to begin exploring further commercial potential inside the region, with the UAE serving as the hub for all investment,” Tolani concluded.

Axiory Global CEO Roberto d'Ambrosio stated, "I strongly think that the modifications to the Commercial Company Law are unquestionably a move in the right path in boosting the UAE's position as a Global commercial center, confirming the UAE leadership's remarkable strategic savviness."

“In a varied and multicultural setting like the UAE, which is already drawing some of the top minds from all around the globe, such a step may present the jurisdiction as one of the most appetizing for global investors, who will now be able to fully enjoy continuing on their company inside a familiar legal structure while still having the assurance of having full control of their company. I believe that the effects of such adjustments will be immediately obvious, bolstering the excellent ongoing recovery from the Pandemic downturn.”