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UAE Federal Companies Law amended to allow 100% foreign ownership

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Mubaydeen Ibrahim
Ibrahim Mubaydeen

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Abu Dhabi

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Garousha Khalid
Khalid Garousha

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Abu Dhabi

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30 November 2020

Federal Decree-Law No. 26 of 2020 (the Decree) has been issued, introducing significant amendments to Federal Law No. 2 of 2015 on Commercial Companies (the CCL).

The Decree amends 51 articles of the CCL and introduces three new articles, with a view to encouraging further foreign direct investment into the UAE. The majority of the amendments apply to limited liability companies (LLCs) and joint stock companies (JSCs) and represent the most substantial changes to the UAE companies law regime since 2015. The Decree comes against the background of the UAE’s introduction over recent years of a range of legislation aimed at aligning the country with international practices.

The most notable development is the removal of the general requirement for a UAE “onshore” company to have 51% UAE national ownership and replacing this with a regime allowing foreign investors to own 100% of certain UAE businesses, subject to certain conditions discussed below. This alert sets out certain of the most significant changes resulting from the Decree.

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