The UAE has scrapped the need to have UAE nationals as sponsors, thus allowing expatriate investors 100 per cent ownership with effect from December 1, 2020. The long-awaited 100 per cent ownership by foreign nationals of companies licensed and registered in the UAE is allowed as per Cabinet Resolution No. 16 of 2020.
The new law amended 51 articles and added new ones, mostly focusing on the regulation of provisions of establishing companies with limited liability shareholding. The amendments exempt expatriate investors from the minimum percentage ownership of UAE nationals. His Highness Sheikh Mohammed Bin Rashid Al Maktoum, announced the amendments to the law, noting that the UAE now enjoys a fertile legislative environment for the establishment of businesses in order to enhance the UAE’s competitiveness.
As per the Commercial Companies Law, Law No. 2 of 2015, foreign shareholders were limited to owning a maximum 49 per cent in a ‘limited liability company’ (LLC) operating as an onshore UAE business. This, it required an Emirati individual or 100 per cent Emirati-owned company to hold the balance 51 per cent share as a local sponsor. Full ownership law will have a positive multiplier effect in form of creation of jobs, an increase in productive capacity, resulting in less need to import because goods are produced in the domestic economy. Given the current economic effects of the Covid-19 crisis, the passing of Cabinet Resolution No. 16 of 2020 comes as a welcome move for new and existing investors, and reinforces UAE’s appeal as a regional investment hub.
Requirements and documents to apply for Freehold company
- Financial budget showing the size of assets for the previous year and audited by an accredited auditor (existing company)
- A written commitment to provide the Economic Department with the budget a year after the economic activity has been practiced (New Company)
- Three-year business plan
- A copy of the passports of the stakeholders
- Copies of stakeholders’ Iqama (if any)
- Trademark evidences (if any)
- Evidences of the current investments inside or outside the emirate (if any)
Please consult with us to know more details about it.