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Delays over expected UAE expat business ownership ruling disappoints
| Published: | 18 Feb at 6 PM |
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Following the UAE’s Federal National Council (FNC) decision last Wednesday to reject the new draft of its companies laws, lawyers are voicing their concern.
Members of the advisory body decided that the long-awaited change in law to allow expats to own a majority of a foreign company operating in the UAE should now be part of the new rules for investors. Discussions on changes to the investor rules are not due to take place until early autumn.
At present, foreigners in the emirate are not allowed to own more than 49 per cent of a company, with Emiratis owning 51 per cent. In its current form, the law at least offers protection to investors, one reason why it is to be moved to the investor legislation sector.
The members of the FMC felt the companies law should primarily relate to Emirati businesses, but local lawyers are stating that easing of foreign ownership regulations would encourage new start-ups which would benefit the local environment. Lawyer Faraj Ahnish believes that the move is a setback for the UAE economy as changing the law would attract new investment.
Managing partner at Clyde and Co’s Dubai office Niall O’Toole states that the change is damaging for the business environment as well as disappointing. He adds that markets will hate the uncertainty caused by the move, and believes that the foreign ownership component should stay in the company legislation sector.
Members of the advisory body decided that the long-awaited change in law to allow expats to own a majority of a foreign company operating in the UAE should now be part of the new rules for investors. Discussions on changes to the investor rules are not due to take place until early autumn.
At present, foreigners in the emirate are not allowed to own more than 49 per cent of a company, with Emiratis owning 51 per cent. In its current form, the law at least offers protection to investors, one reason why it is to be moved to the investor legislation sector.
The members of the FMC felt the companies law should primarily relate to Emirati businesses, but local lawyers are stating that easing of foreign ownership regulations would encourage new start-ups which would benefit the local environment. Lawyer Faraj Ahnish believes that the move is a setback for the UAE economy as changing the law would attract new investment.
Managing partner at Clyde and Co’s Dubai office Niall O’Toole states that the change is damaging for the business environment as well as disappointing. He adds that markets will hate the uncertainty caused by the move, and believes that the foreign ownership component should stay in the company legislation sector.
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