New announcement: 100% foreign ownership of LLC companies – explained!

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The most consequential change in this new announcement is regarding the abolition of the mandatory requirement for an Emirati shareholder for a number of sectors.

by | Nov 25, 2020 | 0 comments



Everyone is talking about the news about 100% Foreign ownership of LLC in UAE.

foreign ownership of llc

The most consequential change in this new announcement is regarding the abolition of the mandatory requirement for an Emirati shareholder for a number of sectors.   foreign ownership of llc

As per existing commercial companies law No 2 of 2015, foreign shareholders were limited to owning a maximum of 49% in a mainland limited liability company LLC.  This means that an Emirati individual had to own majority shares (minimum 51%).  

The new laws will now allow 100% foreign ownership while still offering limited liability for onshore entities.  This is in addition to the UAE cabinet decision regarding FDI (cabinet resolution 16, 2020) adopted in March of this year.  foreign ownership of llc

This is fantastic news for entrepreneurs. Being said, the license is still not available for now. How the law will be implemented and applied is still under evaluation and to be confirmed by the relevant licensing authorities.   

Regulations such as which activities will be eligible, the cost implications of the license, implementation dates, capacity of the Emirati involvement and the requirements and conditions are still under evaluation and yet to be determined.  

Under article 10 of the amended laws, a committee shall be formed as per a cabinet decision and will include representatives from the relevant authorities.  It will deal with proposals to oversee companies engaged in ACTIVITIES OF STRATEGIC IMPORTANCE.  The cabinet will then issue a decision based on the recommendations of the committee to issue the regulations on licensing. 

In parallel to these changes, local authorities retain the power to determine the rules and regulations, foreign ownership of llc

The applicability of the new law does not entail that all new and existing mainland LLC companies will automatically be eligible for 100% foreign ownership.  

Full implementation will take time and may be delayed until the regulations are defined by the committee. This is expected to be rolled out across the Emirates within the next 6-12 months.  

Bizzmosis are closely monitoring the progression of this matter, in partnership with the authorities and will provide regular updates as decisions are made and details released.  

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