What has changed?

The United Arab Emirates (UAE) government intends to further relax foreign ownership restrictions, allowing international investors to own 100% of companies operating in the UAE mainland and granting long-term residency permits for foreign investors for the first time.

In October 2017, the 2015 Federal Commercial Companies Law was amended by decree pursuant to Law No. 18 of 2017 exempting certain companies and sectors (not yet identified) from the 51% local ownership requirement applicable to UAE mainland companies. The government has now gone one step further.

On 20 May 2018, the UAE Council of Ministers passed, amongst other matters, a resolution allowing 100% ownership of mainland companies in the UAE, with His Highness Sheikh Mohammed Bin Rashid Al Maktoum, the Vice President and Prime Minister of the United Arab Emirates, and Ruler of the Emirate of Dubai, instructing the relevant authorities to implement the resolution by the end of 2018.

The Council also announced that the UAE will grant long-term residency permits (up to 10 years) for foreign investors and professionals with certain specializations as well as outstanding graduates.

What does this mean?

This resolution will provide greater certainty and stability for investors and professionals, which are crucial for economic success. This latest key development highlights the UAE’s commitment to widening the scope of foreign investment legislation, coming immediately after the UAE’s introduction of a new Federal Arbitration Law, and reinforces the country’s commitment to becoming the primary destination for international investment, innovation and entrepreneurship in the Middle East.

The relaxation of foreign ownership restrictions, once implemented, will attract significant new interest from international investors and likely lead to the restructuring of many existing investment structures.

What do you need to do?

As no further details have been announced to date on the criteria that will apply to define global investors and on the specific sectors that will benefit from the relaxation of foreign ownership restrictions, there are no immediate steps that companies need to take. However, once the resolution is implemented (expected by end 2018), companies may wish to review their current commercial arrangements and local shareholding structures on the UAE mainland, and foreign investors will be able to consider a new and more business-friendly array of options open to them for structuring their investments in the UAE.

Next steps

The formal resolution from the Council of Ministers is not yet available for consultation. However, we will monitor the implementation of this resolution and update you on the scope of the new legislation as and when developments arise.

To speak to us in relation to any commercial issues in the Middle East, please feel free to contact one of the lawyers below.


Borys Dackiw is the Head of Compliance practice in the Gulf based in the Firm's Abu Dhabi office. A partner of Baker McKenzie since 1995, Borys regularly advises clients across various industries on their compliance and anti-bribery policies and programs and has participated in whistleblower interviews relating to allegations of bribery and other bribery-related investigations. He also advises on mergers & acquisitions (including privatizations), private equity and general corporate and commercial law.


Pietro de Libero is a partner in the Corporate/M&A practice of Baker McKenzie Habib Al Mulla, based in Dubai, and leads the UAE competition law practice. For the past 17 years he has been advising on cross-border and domestic private M&A transactions, including acquisitions, disposals, joint ventures, reorganizations, and private equity investments and disinvestments. Pietro is also seasoned in exercising corporate rights, resolving shareholder conflicts, and drafting and negotiating commercial agreements.


Omar Momany is the Head of the UAE Corporate/M&A practice of Baker McKenzie Habib Al Mulla, based in Dubai. With over 15 years' experience in the Middle East, Omar focuses on public and private mergers and acquisitions, corporate restructurings, corporate governance, joint ventures, commercial matters and corporate/shareholders' disputes in the UAE and throughout the region.


Will Seivewright is a Corporate Partner in the Firm's Dubai office, focusing on public and private mergers and acquisitions in the UAE, wider Middle East and many of the world's leading financial services markets including New York, London and Hong Kong. With over eight years' experience in the UAE, Will advises on corporate restructurings, public takeovers, joint ventures, private equity and venture capital transactions as well as all other general corporate transactions.


Ghada El Ehwany is a partner in Baker McKenzie's Corporate Practice Group in Cairo. She has nearly 20 years’ experience in the Middle East, particularly in Egypt, Saudi Arabia and the UAE, focusing on corporate and commercial transactions. Ghada also advises on healthcare regulatory, structuring, insolvency, employment and compliance matters.


Laya Aoun-Hani is a senior associate in the Corporate & Commercial practice of Baker McKenzie Habib Al Mulla, based in Dubai. She specialises in corporate and commercial transactions, including joint ventures, distribution agreements, company structuring and restructuring, mergers and acquisitions, employment and all related matters. Laya also has particular experience in all compliance and VAT matters.


Rony Eid is a counsel in Baker McKenzie Habib Al Mulla, based in Dubai. With over 18 years' experience in the Middle East (including nine years in the UAE), he specializes in corporate and commercial transactions, foreign direct investments, mergers and acquisitions, reorganization of companies and regulatory matters. Rony also advises on the incorporation and structuring of companies in the UAE including within Dubai's free zones.


Melissa Forbes-Miranda is a counsel in Baker McKenzie's UAE Corporate practice. Based in Dubai since 2008, Melissa has significant experience in advising on a broad range of cross-border and domestic corporate transactions including mergers and acquisitions, joint ventures, corporate reorganisations and shareholder disputes. Melissa also regularly advises clients on various other types of corporate and commercial issues.


Hani Naja is a partner in the Corporate & Commercial practice of Baker McKenzie Habib Al Mulla. He has been practicing since 2007 with a focus on M&A, reorganizations and post-acquisition integration as well as corporate structuring in the Middle East, particularly in the UAE and Qatar. Hani also advises on general commercial, corporate governance and compliance matters, and has gained substantive experience in the technology, retail, defense and government sectors.


Marcos Spanos is a senior associate of Baker McKenzie Habib Al Mulla, based in Dubai. He is a corporate lawyer with a focus on mergers and acquisitions, private equity and joint ventures. Marcos has advised financial institutions, conglomerates, private equity firms and funds in connection with cross-border transactions.

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