UAE Opens Up Further - 3 Things to Know

Following a raft of liberalizing legal reforms earlier this month, the UAE has now eased restrictions in its corporate sector.  51 amendments have been made to the Commercial Companies Law and related legislation.  

With the lifting of the 51% local ownership requirement, onshore companies can now be wholly owned by non-Emiratis, a significant step towards opening the economy to foreign direct investment in mainland UAE.  

In a sign of changing times, the amendments also provide for electronic voting enabling the holding of AGMs in cyberspace. While it may be argued that online meetings tend to tilt proceedings in favour of management and dampen shareholder dissent, they do present a cheaper, greener and less-time consuming alternative. Extraordinary times such as these have led to similar amendments in other jurisdictions.   

Lastly, in a move that will boost liquidity in capital markets, private companies wishing to go public shall now be allowed to offer up to 70% of their shareholding on local bourses up from the previous limit of 30%.

The implementing regulations should shed further light on the procedures through which these changes will come into effect - watch this space!