The Cabinet of Ministers of the United Arab Emirates (UAE) recently issued Federal Law No. 18 of 2017, which amended certain provisions of the UAE commercial companies law (Federal Law No. 2 of 2015) (the CCL). The new law came into force on 28 October 2017.
Under the CCL all onshore UAE limited liability companies are required to have at least 51 per cent of their shares owned by a UAE national. The new law gives the UAE government express powers to relax this requirement with respect to certain companies and sectors. It remains to be seen which sectors will be impacted by the new law, but based on previous government statements we expect it to cover a limited number of strategically important sectors such as technology and the environment.
This is a significant development which is likely to lead to increased levels of foreign investment in the UAE, in line with the government's intention to attract more foreign investment into the UAE and the region. In addition, it is likely to result in the restructuring of existing investments in the relevant sectors. It is not yet clear when a resolution will be issued to determine which companies and sectors will be affected by the new law, but we will be monitoring this and will issue a further alert as and when there are any developments.