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Changes to the regulatory regime governing foreign ownership rules in the UAE

  • Middle East
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In a significant decision with potentially wide ranging and positive implications for the UAE, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has announced that the UAE Cabinet has approved important changes to the regulatory regime governing foreign ownership of companies in the UAE as well as the UAE residents’ visa system. The specific details of the proposed changes have not yet been made available to the public, but it is expected that:

  • The restrictions on foreign ownership of UAE companies will be lifted in certain circumstances to allow up to 100% foreign ownership of UAE companies. The Cabinet’s decision has been made pursuant to a decree issued in September 2017 by His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, which amended the UAE Commercial Companies Law No. 2 of 2015 to allow foreign ownership of UAE companies to exceed 49% where this is permitted by the UAE Cabinet based on the recommendations of the Minister of Economy.
  • Certain categories of individuals may be granted the right to apply for long-term UAE residency visas (for up to 10 years). This is expected to be made available to certain foreign investors and their families, as well as professionals in the fields of medicine, science, research and technology. Foreign students are also expected to be granted the right to apply for a five-year residency visa.

The decision potentially represents an important milestone in further enhancing the UAE’s position as a key centre for foreign investment in the region. However, its specific impact will in large part depend on how it will be implemented in practice and what regulations are put in place around such implementation. The UAE Ministry of Economy and other regulatory bodies have been tasked with implementing the relevant regulatory changes by the end of 2018.

Eversheds Sutherland is closely monitoring these important developments and we will issue a further update as soon as additional information is made available.