UAE Industry Sectors With 100% Foreign Ownership

UAE Cabinet Decision approving 100% foreign ownership 

Prior to Federal Decree Law No. 19 of 2018 (the “FDI Law”) coming into force at the end of last year (2018), there was a 51 percent requirement- only allowing foreigners to own 49% of a Company incorporated in mainland UAE with the majority of the shares owned by a UAE National (51%) as per Federal Law No. 2 of 2015 (“UAE Commercial Companies Law”). The FDI Law introduced a new framework for the UAE Cabinet that would allow for 100% foreign ownership. The Law further in the next phase of development set out a “Negative List” which included the sectors that would not be approved for 100% ownership and indicated for a “Positive List” of sectors to be further be announcement by  by the Foreign Direct Investment Committee.

Accordingly, this Tuesday, July 2nd 2019, the UAE Cabinet announced the approval of 100% foreign ownership in 122 economic activities across 13 different sectors. This long-awaited development signals significant change as well as the UAE Government’s continued efforts to increase economic growth and encourage investment. Further, the Cabinet announced that the local governments of the seven Emirates shall determine how much foreign investors can own across these approved economic activities. 

The 13 sectors that have been approved for 100% foreign ownership are as below:

1.    Renewable Energy;
2.    Space;
3.    Agriculture;
4.    Manufacturing;
5.    Transportation & Storage;
6.    Hospitality & Food Services;
7.    Information & Telecommunications;
8.    Scientific, Technical & Professional activities;
9.    Administrative & Support Services;
10.    Educational Activities;
11.    Healthcare;
12.    Art & Entertainment; and
13.    Construction. 

This development will enable foreign investors to incorporate companies and conduct business in mainland UAE without being subject to the Free-zones’ regulations as well as provide and ensure increased protection of the investor and mitigate of the risk of being the minority shareholder in the Company. 

How Can TLG Help?

The Legal Group’s Corporate & Commercial Division would be pleased to advise you on the possibility of FDI in your respective case and assess if your economic activity falls within the approved sectors for FDI; guide you through the procedure for FDI incorporation as well as the procedure for change of 49% ownership to 100% ownership for FDI approved activities. 

Stay Updated 

To receive key legal updates in the UAE and the region, subscribe to TLG’s legal updates and newsletter by visiting: www.tlg.ae.