UAE gives green light to draft companies law

New legislation may ease curbs on foreign ownership in some sectors
UAE gives green light to draft companies law
The UAE cabinet has approved a draft companies law. (Photo for illustrative purposes only)
By Reuters
Sun 04 Dec 2011 09:02 PM

The United Arab Emirates cabinet has
approved a draft companies law that may allow foreign ownership
above 49 percent, state news agency WAM reported on Sunday, as
the Gulf state seeks to attract more investment to help
diversify its economy.

The law allows the cabinet to specify the types of
businesses and sectors where a foreign partner may hold more
than 49 percent of a company's capital, WAM said.

Currently, there is a maximum 49 percent ownership limit
for listed companies, and foreigners need a UAE national or
partner to conduct business, although full foreign ownership is
permitted in free zones.

The legislation lays down a framework for the governance of
public companies, ensuring transparency and disclosure of
financial data as well as the efficiency and integrity of the
board of directors, WAM said.

The agency did not say when the legislation, which is also
expected to make it easier to set up businesses and strengthen
the protection of shareholders, was expected to take effect.

The UAE has been trying to diversify and modernise its
economy, developing areas including tourism, finance and
aerospace, to reduce its heavy dependence on oil exports.

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