One of the most significant developments is the abolishment of Article 10 of the old CCL. Previously, if you wanted to set up a company in the UAE, you were required to have, “one or more UAE partners holding at least 51% of the share capital of the company”. This provision effectively capped the level of foreign ownership at a a 49% shareholding of a limited liability or joint stock company established onshore in the UAE.
Following the CCL’s amendment there is no longer a general legal requirement for a UAE partner to hold a majority stake in an onshore company. On federal law level there is now a lot more scope and flexibility for a foreign investor to establish a company in the UAE. The new Article 10 of the CCL now only provides for a committee to be established (the Committee), which will decide on strategically important activities and then determine the controls for licensing the companies that undertake any of these activities.
Taking decisions of the Committee into account going forward the Departments of Economic Developments in each respective Emirate will be in charge for determining “a certain percentage for the contribution of nationals to the capital of a company, or the boards of directors of all companies”, and approving the applications for the incorporation of companies.
In other words, your onshore company will only require a UAE national partner to hold shares or to be a director if the Department of Economic Development in the Emirate where your company is registered includes the business of your company into the list of any restricted activities. With the previously mandatory minimum 51% local ownership requirement being abolished, any continued local ownership requirement determined by the authority in each Emirate could also be less than 51%, opening the option for a foreign investor to own the majority of the share capital in a company and a UAE partner being a minority shareholding partner.