UAE permits 100% foreign business ownership attracting foreign investments into the country

June 3, 2021 – Kuwait City, Kuwait


The United Arab Emirates (UAE) announced that foreign nationals would be allowed to own 100 percent of commercial companies within the country, eliminating the need for a UAE national to hold the majority share of 51 percent. The UAE Minister of Economy, His Excellency Abdulla Al Marri, announced that the amendments to the Companies Law in respect of foreign ownership will be implemented from June 1, 2021. The amendments to the law allow foreign, non-UAE national, investors to wholly own companies ‘onshore’ in the UAE, unless a restriction exists, and the company carries on what is called a ‘strategic impact’ activity. The amendments contemplate that a Cabinet Decision will be issued outlining the scope of these ‘strategic impact’ activities: we have not yet seen that Cabinet Decision and look forward to it being issued.

The previous foreign investment law allowed foreign ownership in specific business sectors (Positive List) allowing up to 100 percent foreign ownership of certain Positive List businesses. However, the applicant needed to meet several challenging requirements to qualify for this exemption, such as significant share capital contributions, use of technology, and employment of UAE nationals. Additionally, foreigners were able to own up to 100 percent when registered in any of the designated free zones in the UAE. All other entities incorporated on the mainland (that is, outside of free zones) and outside of the Positive list, the law required UAE nationals (or entities wholly owned by UAE nationals) to hold a 51 percent shareholding.

The amendments introduced by the new Commercial Companies Law will boost the UAE’s appeal as a destination for both foreign investors, entrepreneurs, and talents. It will further strengthen the country’s position as an international economic center and encourage the flow of investments to the country’s vital economic sectors, the minister added.

UAE has always been successful in positioning itself as a global business hub and with this new foreign investment law, it will undoubtedly attract foreigners to invest in the country, as it improves investor confidence and reduces cost of operations.


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