The Abu Dhabi Department of Economic Development (DED) has published a list of 1105 commercial and industrial activities that will allow 100% foreign ownership in the UAE. However, existing business owners can change their status as long as they “comply with the regulations on activities or other applicable restrictions.”
Investors can look up whether their operations fall under the exempt category on the website ‘adbc.gov.ae’.
Abu Dhabi draws up a List of Commercial and Industrial Business Activities for 100% Foreign Ownership in UAE
- Each Emirate’s Department of Economic Development (“DED”) will list the commercial activities available to 100% foreign ownership. The Abu Dhabi Department of Economic Development (DED) has published a list of more than 1,105 license operations that a foreign-owned Onshore Company can carry out across various sectors. While “trading” is not now on the list, the Abu Dhabi DED may expand the list of license activities to include it in the future.
- The Dubai Department of Economic Development (DED) has revealed that the list will comprise over 1,000 commercial and industrial license activities. The discretion of each DED in determining what operations a foreign-owned onshore company may carry out could result in distinct regimes of foreign ownership applicable to enterprises in the same industry depending on which one of the Emirates is an entity.
- As approved by the UAE Council of Ministers, foreign ownership restrictions continue to apply to enterprises engaged in strategic operations. Companies involved in such activities will be subject to UAE Council of Ministers-determined local ownership and board membership requirements.
Also read this: Hundred Percent Ownership for Foreign Investors
Announcement as of 19 May 2021
On 19 May, the UAE confirmed that it would grant 100% foreign ownership to non-strategic areas. The list of such business activities would be compiled by the Departments of Economic Development (DED) in each of the emirates. The revised Commercial Companies Law (CCL) goes into effect 1 June.
Mohamed Ali Al Shorafa, The Chairman of Abu Dhabi DED, said:
“This announcement of the list of economic activities available for foreign ownership reflects the keenness of the Abu Dhabi Government to attract further foreign direct investments and to promote an open and resilient competitive business environment. The decision is one of many decisions and initiatives to provide incentives for the private sector in Abu Dhabi and to enhance the status of Abu Dhabi on the global investment map.”
Mr. Mohamed Ali Al Shorafa emphasized the Department’s commitment to improving the business environment by increasing the ease of doing business in the Emirate and eliminating all obstacles to investments by reducing the burden for business facilities.
NOT HAVING 100% FOREIGN OWNERSHIP
Banking and finance, including the fast-emerging fintech industry and remittances, will continue to be activities that require a UAE national as the majority partner.
Other strategic categories would be services in utilities and telecom and those businesses operating under the Commercial Agency Law.
How will it BENEFIT Business Owners and the Government from 100% Foreign Ownership in Business?
Many foreign investors and business owners are already taking advantage of the amendment. But how does it benefit investors and the country as a whole? The following is a list of advantages that explains:
- 100% foreign ownership will encourage more investment in the UAE and contribute to the Emirate’s local economy.
- This decision will also strengthen the UAE’s position on the global investment map, where industrial activities can be carried out with full ownership by a foreign and legal non-citizen.
- This strategy will strengthen and expand the UAE’s status as a desirable investment destination around the world.
- While the COVID-19 pandemic wreaked havoc in the rest of the world, causing major economies to plummet, the UAE’s announcement provided a light of optimism for foreign investors looking to expand their horizons in the GCC region.
- This strategy will assist the UAE in attracting more foreign investment in industries other than oil and gas.
- As Expo 2020 is around the corner, the strategy is expected to enroll more businesses within this year itself
- It will boost investor confidence in the Middle East market while also lowering the cost of business operations.
- This will also have a big impact on the country’s commerce activities, as it helps increase imports in the UAE.
While foreign investors are waiting for additional information, numerous companies have already begun registering for 100% foreign ownership status.
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Final Thoughts
We anticipate that the amended CCL will strengthen the UAE’s position as an international investment destination. However, it remains to be seen if the free zones of the UAE would thereby decrease in popularity with foreign investors.
We would be pleased to assist clients in evaluating and reviewing their current ownership and governance arrangements to assess the impact of the modified CCL on their business, as well as discussing investment prospects.
