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The UAE Ministry of Economy announced on Wednesday that the Commercial Companies Law will come into force as of 1is June in the country.
With this law, major changes are planned on the governance of Emirati companies since one or more foreign persons will be able to hold 100% as of this date.
It is also important to clarify that all existing and previously licensed companies in the UAE can change their status in accordance with the new amendments foreseen by the Company Law.
As a reminder, and until now, foreign shareholders could only own a maximum of 49% of a “Limited Liability Company” (LLC) operating onshore in the UAE, thus forcing a native or a 100% Emirati company to hold the remaining 51% (as a local sponsor). For other types of companies and in certain categories of activities, a local agent had to be paid even if the latter had no shares in the company.
For the Minister of the Economy, this new law is in line with the overall vision of the country which wishes to consolidate its position as a global investment hub but also to propose open and flexible legislation, thus creating a favorable environment for businesses.
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