Legal Updates


New UAE FDI Law Allows 100% Foreign Ownership


Federal Decree-Law No. (19) of 2018: 
Issued by his Highness Sheikh Khalifa bin Zayed Al Nahyan, the new Foreign Direct Investment (“FDI”) law, Federal Decree-Law No. (19) of 2018 (“FDI Law of 2018”), is now in force. The new law is anticipated and expected to by attract and encourage a greater number of foreign investments into the United Arab Emirates (“UAE”). 

100% Foreign Ownership in UAE Mainland: 
Prior to this law, in order to incorporate and establish an entity onshore and in the UAE mainland and per the UAE Commercial Companies Law (“CCL”), it is mandatory for foreign companies and individuals to have a local Emirati Partner or Service Agent owning fifty-one (51%) of the shares of the respective company. 

Pursuant to the FDI Law of 2018, foreigners may now wholly own (100%) onshore and mainland companies within the country. Further, the law also details the requirements for currently present and established onshore foreign companies to apply to own more than forty-nine (49%) of shares in selected industries of the economy. The FDI Law of 2018 also establishes two (2) new governmental bodies, namely, the Foreign Direct Investement Unit and the Foreign Direct Investement Committee. 

Negative List: 
It is of importance to note that the Cabinet has restricted this law from applying within certain sectors, referred to as the Negative List (“NL”). The law does not yet list the sectors in which the law will apply, however, grants the Cabinet the authority to add sectors to the NL and in the awaited and anticipated Positive List (“PL”).

For convenience, the restricted sectors within the NL are listed as follows: 

  • Oil exploration and production; 
  • Investigation, security and/or military; 
  • Banking and financing activities; 
  • Insurance; 
  • Pilgrimage and Umrah services; 
  • Certain recruitment activities; 
  • Water and electricity provision; 
  • Fishing and related services; 
  • Post, telecommunication and other audio-visual services; 
  • Road and air transport; 
  • Printing and publishing; 
  • Commercial agency; 
  • Medical retail (including but not limited to pharmacies); 
  • Blood banks, quarantines and venom/poison banks. 

How Can TLG Help? 
Our dedicated Corporate & Commercial Team retains due extensive expertise advising on corporate structuring, company incorporation and related issues within the UAE and across the Middle East region as whole. 
Should you have any questions on the above or require any services pertaining to Corporate & Commercial, please feel free to directly contact our Team.