The UAE has no plans to raise the 49 per cent foreign ownership cap for companies, a senior economy ministry official has said. Economy Ministry Undersecretary Mohammed Al Shihhi’s statement has dashed hopes of a company law that would allow overseas investors to fully own firms outside of the country’s free zones. “The companies law, the new one, will maintain the same percentage in terms of ownership. We have the free zones that give 100 per cent ownership and at the moment, there are no plans to change that. We will continue with the current incentives, such as no tax,” Al Shihhi was quoted by Arabian Business as saying.
Existing laws in the UAE bar foreigners from owning more than 49 per cent of a company, with an Emirati sponsor holding the remaining 51 per cent. The exceptions are the free zones, which allow 100 per cent foreign ownership, but can require significant start-up costs.
UAE Economy Minister Sultan bin Saeed Al Mansouri said in February that a new UAE companies law could be introduced before the end of 2011. The law was expected to relax ownership caps in some corporate sectors.
Al Shihhi also said the UAE would launch an investment map to attract investment, boost growth and reduce dependency on the oil sector across the emirates.