Free ownership of some companies for Non-nationals according to the amendment of the Companies Law in the United Arab Emirates:
The government of the United Arab Emirates issued a Federal Decree-Law No. 26 of 2020 amending some provisions of the applicable Companies Law No. 2 of 2015, so that this amendment cancels the Emiratisation percentage of owning companies stipulated in Law No. 2 of 2015 and hence allows 100% freehold. For non-citizens for some activities in accordance with the powers of the competent authorities.
The new amendment included the reorganization of the provisions relating to limited liability and joint stock companies, as the Federal Decree of the Foreign Direct Investment Law for the year 2018 No. (19) was cancelled.
Activities excluded from the application of the Companies Law:
The amendments included a set of activities that will be excluded under the provisions of Federal Decree-Law No. 26 of 2020 regarding amendments to the Commercial Companies Law. The following are companies to which the provisions of this law do not apply:
– Companies exempted by a Cabinet decision.
– Companies wholly owned by the federal government.
– Companies in which the federal or local government or one of the affiliated institutions contribute.
– Companies that were exempted from the provisions of Federal Law No. (8) of 1984.
With regard to the participation of citizens in the companies’ boards of directors:
The law grants local authorities the power to determine a percentage of citizens’ contribution to companies’ boards of directors and their capital, to approve applications for establishing companies, and to set fees in accordance with the regulations of the Council of Ministers. It also stipulates the reorganization of governance for boards of directors and the general assembly in joint stock companies, and to allow others to engage in fund investment activities for the account of others.
The mechanism of setting controls:
The Securities and Commodities Authority has been granted this authority to evaluate in-kind shares, record the names of shareholders to attend the company’s general assembly meeting, and permit the appointment of experienced board members who are not shareholders without specific percentages, in addition to dismissing the chairman of the board of directors or any member from his position, if issued A judgment proving misuse of authority, fraud, or concluding deals that conflict with the interests of the company, in violation of the provisions of this law or the decisions implementing it.
With regard to lawsuits:
The amendment of the Foreign Ownership Law permits one or more shareholders to file a lawsuit before the competent court in their name and on behalf of the company against any party related to the company for the damages caused to it, resulting from violating the duties towards the company in accordance with this law or any other law.
Granting the right to electronic voting:
The amendment of the law permitted the right to electronic voting in the meetings of the general assembly, if they adhered to the controls and conditions of the authority. The law also allowed the issuance, signature and electronic retention of share certificates, in accordance with the authority’s controls.
The law granted the Council of Ministers the formation of a committee whose membership is composed of representatives of the competent authorities, to propose activities with a strategic impact and the controls for licensing companies that engage in activities. It was also recognized that it is not permissible to amend the articles of association or articles of incorporation of any of the existing companies (since its expiration date) in a way that affects the percentage of the shareholding. Citizens in those companies or their boards of directors, as soon as the company carries out an activity of strategic impact, except after the approval of the competent authority.
Companies Reconciliation Deadline:
The new law allowed existing companies to adjust their positions in accordance with its provisions within a period not exceeding one year from the date of its implementation, with the possibility of extending the period for another similar period by a decision of the Council of Ministers, based on the proposal of the Minister of Economy.
International Auditing & Consulting Center provides the service of modifying the ownership of companies for the benefit of non-nationals (100% freehold) and assisting investors and entrepreneurs in establishing companies and owning them fully in economic activities.