Traditionally, setting up a business in UAE mainland required a local partnership. Only Free Zone entities were allowed 100% foreign ownership. A recent announcement has radically changed the business landscape of UAE, allowing 100% foreign ownership in UAE mainland businesses. Investments in certain sectors and economic activities will benefit from this new
scheme.

Related Services: General Corporate and Commercial Advisory, UAE Startup Services, Company Formation
As per Commercial Companies Law No. 2 of 2015, a UAE national must own at least 51% in a mainland trade license. However, Federal Law No. 19 of 2018 on Foreign Direct Investment and Cabinet Resolution No. 16 of 2020, allows 100% foreign ownership without any local participation in a total of 122 sectors and economic activities across UAE mainland referred to
as the ‘Positive List’. Some of the major sectors which are open to 100% ownership through ‘Positive List’ are as
follows:

Agriculture Sector – 19 activities.
Industrial Sector – 51 activities
Service Sector – 52 activities.

You may download Cabinet Resolution No. 16 of 2020 by clicking the following link

https://www.economy.gov.ae/Documents/Cabinet%20Resolution%2016%20Concerning%20the%20

Determination%20of%20the%20Positive%20List.pdf for accessing the entire list of 122 sectors in

which 100% ownership is allowed.

Guarantees:

Following are the benefits and guarantees assured to Foreign Direct Investment (FDI)

Businesses:

100% ownership
FDI business are treated just like national companies
Right to benefit from real estate allocated to the FDI Businesses
Easy repatriation of annual business profits, proceeds of liquidation of investment or sale of the business, proceeds derived as a result of settlement of disputes out of the Country
Easy procedures to add partners, transfer ownership, amend incorporation documents or company legal form or to go for mergers or acquisitions
No expropriation of FDI businesses without fair compensation;
No to seize, confiscate, freeze or restrict FDI business without a valid court order.

It is worth noting that existing companies can also benefit from these changes.

There is also a negative list, specifying sectors restricted from 100% ownership, as below:

Oil exploration and production

Investigation, security and military related
Banking and financing
Insurance
Pilgrimage and Umrah services
Certain recruitment activities
Water and electricity provision
Fishing and related services
Post, telecommunication and other audio-visual services
Road and air transport
Printing and publishing
Commercial agency
Medical retail (including pharmacies)
Blood banks, quarantines and venom/poison banks

If you would like to find out more by contacting us, please feel free to write to office@atblegal.com or contact us at /contact-us.php Authors: Asha Bejoy & Jose Joseph

Part of ATB Legal’s Corporate & Commercial practice.