posted on January 19, 2022

Extract of “The Federal Decree- Law No (26) of 2020 amending some provisions of the Federal Law no (2) of 2015 on Commercial Companies”.

51 Articles replaced by the new “Federal Decree- Law No (26) of 2020”

    1. Earlier, any company except Free Zones Companies shall have one or more UAE partners holding at least 51% of the share capital of the company.
    2. Any of its foreign company, its branch, or office is required to have an agent that shall be a UAE national.

    Under the new Law

    1. The new law shall repeal the provisions of “Article 10” which requires the mandatory shareholding of at least 51% of an UAE national.
    2. A committee shall be formed for determining the activities with strategic impact and activities which will be covered under 100% shareholding for Non UAE citizens.
    3. The new law shall also repeal “Article 329” which requires the agent of a foreign company, its branch, or office to be an UAE national.
    4. Provisions pertaining to Foreign Direct investment shall also be repealed.


    The company’s ownership regime is significantly liberalized. Local partnership (so called sponsorship) requirement is axed generally save for businesses to be identified by the Committee. This will bring a lot of transparency in terms of identifying the actual owners of the businesses and thus boost confidence of various stakeholders in the companies, including their bankers, vendors, and customers. This is likely to be a huge stimulus to the economy of the UAE and will bring in a lot of Foreign Direct Investment.


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