New legislation may ease curbs on foreign ownership in some sectors
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.
Whatever be the draft legislation, the UAE will have to do MORE to attract business investments to its business hubs. The 'artificial' factor of growth, the 'first' in everything (first tallest tower, first man-made Palm Jumeirah structure visible from outer space, etc), and much else has to be stopped. First and foremost is the fleecing by real estate agents who are now charging 2% from BOTH the buyer and seller, from BOTH the Landlord and the Tenant. Why? Who's in charge? What about the rising cost of everything. Just being efficient in drafting legislation will never attract people to set up business in the UAE.
I beleive this is related more to Corporate Governance Code than it is to Company Law...
This is indeed a great initiative . we would be looking forward for the full draft . what would be the new limit , would it be possible for 100% ownership for the LLC company ?
Do not expect more..... Same type of announcement was there before some months but unfortunately nothing happened. There was article of Chief of Dubai Chamber of commerce twice for changing visa rules of 3 years to workers & investors or partners for five years.... But still after one year nothing happened.....