It has been a norm for most foreign businesses in the UAE apart from those established in free zone areas, if not a partner but a local service agent has to be named in the license to allow a foreign business to branch out or operate in the Emirates.
It was last June 1st that the new amended company law took effect, this means that it revoked Article 329 of the Commercial law; there is no longer a need of 51% UAE national ownership for a foreign company who desire to establish a branch or an office in the region.
With all things being considered, all businesses in the UAE are open to full foreign ownership. As a positive result, there’s an option for businesses to not establish in free zone areas for them to owned 100% of the company. However, there are still exceptions in which the Cabinet may enforce for a local UAE participation and though it is not yet clear, there might be a law requirements and restrictions to be enforced by individual emirates.
There are other key changes as follows:
- No requirement of a UAE national to be on board of directors of joint stock companies.
- Enhanced directors’ liabilities provisions to include the senior management of joint stock companies.
- Allow shareholders to sue a company in civil court over any failure of duty by its directors that results in loss or damage
- Allows companies wanting to go public to sell up to 70 per cent of their shares after assessment through an initial public offering, as opposed to the current 30 per cent.
- Allows private joint stock companies to be owned by a single corporate shareholder.
“The amended Commercial Companies Law aims at boosting the country’s competitive edge and is a part of UAE government efforts to facilitate doing business,” Abdulla bin Touq Al Marri, Minister of Economy, said.
(Source: Gulf News)