Ownership and Companies in UAE​

Ownership and Companies in UAE​

Before the most recent change to the UAE Commercial Companies Law, Federal Law No.2 of 2015, and its amendments, it was necessary for foreign nationals to have a local sponsor in order to be nominated in the firm. These regional sponsors would likewise own 51% of the company’s total stock. The local sponsor will also have extra responsibilities and rights, or in some cases, the parties will engage in a separate agreement to guarantee that the foreign expat has sole operational authority. There are several Lawyers in Dubai, who can certainly help out you to understand the new rules, company setups procedure, company setups rules, etc.    

 Recent Amendments:

The most recent amendments to the Commercial Companies Law have significantly reduced the previous restrictions placed on foreign firms. A foreign business or individual may now invest in and own up to 100% of the outstanding shares of a company in the United Arab Emirates, eliminating the requirement for a local sponsor under the prior law. A further provision of the proposed amendments allows the UAE authorities to designate certain activities as having a “strategic significance” and hence as being reserved for Emirati involvement on an emirate level. Thus, each emirate is obligated to publish a list of the types of businesses that can operate with 100% foreign ownership and don’t need a local sponsor. These modifications were made in accordance with Federal Decree-Law No. 26 of 2020, and they take effect on June 1st, 2021. Around 1000 commercial and industrial activities with 100% foreign ownership are listed by the Dubai Economy.

A process for implementing the changes:

The following actions may be conducted in order to bring about the modifications in an existing firm that wants to go from having 49% foreign ownership to 100% foreign ownership and if you still feel that there are certain things that need to be explained then advocates in Dubai will guide you accordingly. 

Existing businesses can convert to a 100% ownership structure by updating their Memorandum of Association (MOA), which has been filed with the economic department. This would necessitate taking the necessary legal actions in accordance with current protocols, which call for: – 
1. A Board resolution from current shareholders approving the proposed modifications;
2. Getting preliminary approval from the economic department;
3. Registering and paying the necessary costs for the modified MOA;
4. Modifying the business’s trade license to reflect the modifications made.
However, the license may be transferred to a solely owned limited liability company; under the current laws, it is not possible to convert an LLC firm with more than one shareholder into a sole proprietorship.
The adjustments for full foreign ownership can be implemented without the need for any additional fees, guarantees, or cash from the government.


UAE Government is much interested and dedicated to bringing change every year for the betterment of people and for the betterment of businesses in UAE. Therefore, before taking any practical decision or action please book a legal appointment with a Lawyer like Advocate Mohammad Ebrahim Hassan Al Shaiba or with Law Firm like Al Shaiba Advocates and Legal Consultants. Such Law Firms are updated and advanced in their working and operations. So better consult good lawyers first. They will advise you all about Economic Department, Immigration, LabourDepartment etc.

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