UAE will allow foreigners to own 100% of a company

In its strategy to be more open-minded and become an attractive country for foreign investment, the United Arab Emirates will allow foreigners to set up and own the entire capital of a company in the Gulf country from 1 July 2021. Previously, foreigners wishing to set up a company in the UAE had to have an Emirati shareholder or agent.

Emirates already announced in 2019 the repeal of a decade-old law limiting the share of equity that can be owned by a foreigner to 49 per cent, the repeal of which will come into effect next month. "The amended law on commercial companies aims to strengthen the country's competitive edge and is part of the UAE government's efforts to make it easier to do business," explained Economy Minister Abdullah bin Touq A Marri, as quoted by the official WAM news agency.

These changes, as explained by the Emirati finance minister, are intended to boost the attractiveness of the UAE as a destination for foreign investors, entrepreneurs and talent, as well as to further strengthen the country's position as an international economic hub and encourage a flow of investment into vital economic sectors.

This revolutionary move for the UAE economy was announced in November last year. The UAE confirmed via social media the changes to its legislation on the ownership of commercial companies. For their part, industry experts applauded the changes as they made the Gulf state more attractive for foreign investment and the creation of new businesses.

Previous legislation requiring onshore companies to have a majority shareholder in the UAE had been described by investors as the "number one problem" for foreign companies. The changes are the latest in a series of measures aimed at liberalising business activity in the UAE, where foreigners account for more than 80 per cent of the population. In addition to opening up new forms of financing and making the economy less dependent on oil.

Thirteen economic sectors will be affected by this provision, including renewable energy, agriculture, transport and e-commerce. This reform, according to the minister, will improve the country's position as an "attractive destination for foreign investors, entrepreneurs and talent" and strengthen its status as an "international economic hub"

In the same vein, in October 2020, Dubai launched a virtual visa scheme, allowing professionals from around the world who work remotely to relocate to the emirate with their families with access to all services, including schooling, telecommunications and utilities. It was rolled out nationwide in March this year. "Any employee from anywhere in the world can reside in the UAE to work remotely even if the company is not present in the country," said Mohamed bin Rashid al-Maktoum, the UAE's vice president and prime minister.

The UAE's vice president and prime minister tweeted that "development is continuous and change will not stop". "Our teams continue day and night to consolidate our international economic and political position and establish a quality of life that is the best in the world for our people and all who reside here," he said.

Dubai has also recently launched the Virtual Enterprise License, which allows global businesses to access a regulated e-commerce platform populated by Dubai-based companies, while digitally exploring new markets and investment opportunities. The initiative, which allows investors from around the world to do business in Dubai digitally without having to live in the UAE, is expected to attract more than 100,000 companies.