Minister of Economy says new law will remove requirement to have local partner who holds at least 51% of company set up in the UAE
A new law that exempts foreign firms from giving local partners 51 percent of companies set up in the UAE is set to come into force next year, according to Sultan bin Saeed al Mansoori, the country's Minister of Economy.
The UAE Commercial Companies Law requires that each company established in the UAE have one or more UAE national partner who hold at least 51 percent of the company’s capital.
But new rules aimed at liberalising the UAE's investment environment are set to go through the Federal National Council soon, he told the India-UAE Partnership Summit in Dubai on Monday.
"We do have our challenges wih the laws and regulations governing investments here in the UAE. The 51-49 percent is always a challenge for many of the investors who would like to own 100 percent of the investments as they put here in the UAE.
"We have come up now with a law which is almost finalised and needs to go through our FNC very soon."
He added that the new law will identify certain sectors in which the 51 percent ownership rules will be relaxed, without giving further details.
Currently, companies that undertake certain activities are exempt from the 51 percent requirement, including oil companies with concession agreements, companies involved in the oil and gas industry, companies that produce electricity and gas, companies involved in treatment of water and transmission and distribution.
Foreign banks are also exempt from having to appoint a sponsor while companies established in free zones are exempt from the 51 percent requirement, if the relevant free zone has special provisions regulating the company.
Al Mansoori said the new law would support the diversification of the economy of the UAE.
global economy is stagnating, and uncertainty about its future is rising. Prices of the minerals and other basic commodities that dominate the exports of many poor countries have also declined sharply. All of this points up the need for diversification strategies that can deliver sustained, job intensive and inclusive growth. this law will help the economy of UAE to grow up faster