There have been a few developments in the last week or so in the context of recent amendments to the UAE Commercial Companies Law (Companies Law) relating to foreign ownership restrictions. The amended Companies Law allows full or majority ownership of commercial companies by a foreign investor, unless a restriction applies. Those restrictions apply by way of:
- a Cabinet Resolution restricting foreign ownership in companies carrying on activities with a ‘strategic impact’ (Strategic Impact Resolution); and
- regulation at an Emirate level by the competent authorities (Departments of Economic Development).
Strategic Impact Resolution
The Strategic Impact Resolution, UAE Cabinet Resolution No. 55 of 2021, has now been issued, with effect from 1 June 2021. Those activities with a 'strategic impact' are:
- security, defence and military activities;
- banks, exchange houses and finance companies;
- currency printing;
- Haj and Omra services;
- Quran centres; and
- services related to fish traps.
The Strategic Impact Resolution also contains more information about foreign ownership in companies which carry on activities with a 'strategic impact'.
In late May, the Government of Abu Dhabi issued a list of activities which could, in principle, be carried on by a commercial company which was wholly owned by foreign investors with effect from 1 June. In the last week or so, that list has been expanded. Notably for many clients, it now includes a number of trading activities.
It is good to see further clarity continue to emerge regarding the circumstances in which foreign ownership will be permitted, which helps provide market certainty about the new regime.