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Foreign Direct Investment Law (FDI) in the UAE

The UAE has introduced an advancement in the Commercial Companies’ Law (CCL) that allows foreign investors to own 100% of companies in the country, without the need for a local partner. The change is expected to boost foreign investment in the country and create new job opportunities.

Under the previous law, foreign companies had to find a local partner to work with, who would own at least 51% of the business. This requirement was intended to encourage local investment and ensure that foreign companies operated in partnership with local businesses.

However, the new law removes this requirement, allowing foreign investors to set up businesses on their own. This is a significant change that is expected to make it easier for foreign companies to set up operations in the UAE.

The new law is part of the UAE's efforts to attract more foreign investment and diversify its economy. The country has been working hard to reduce its reliance on oil and develop other sectors, such as technology, tourism, and renewable energy.

By making it easier for foreign companies to set up businesses, the UAE is likely to attract more investment in these sectors. This, in turn, could create new job opportunities and help to drive economic growth.

“According to the World Investment Report 2022 issued by the United Nations Conference on Trade and Development (UNCTAD):

1. The value of foreign direct investment (FDI) to the UAE amounted to USD 20.667 billion (AED 76 billion), compared with USD 19.884 billion (AED 73.04 billion) in 2020.

2. The UAE was ranked 1st in the West Asia region to receive 37 per cent of the total FDI inflow to the region, amounting to USD 55.5 billion.

3. The UAE was ranked 1st in the MENA region to receive 31 per cent of the total FDI inflow to the region, amounting to USD 66.6 billion.”


One of the main benefits of the new CCL is that it will make it easier for foreign investors to set up businesses in the UAE. Previously, foreign companies had to find a local partner to work with, which could be a difficult and time-consuming process. The new law removes this requirement, allowing foreign investors to set up businesses on their own.

Another benefit of the new CCL is that it will help to boost foreign investment in the UAE. By making it easier for foreign companies to set up businesses, the country is likely to attract more investment in sectors such as technology, renewable energy, and tourism. This, in turn, could create new job opportunities and help to drive economic growth.

The new law is also expected to have a positive impact on the UAE's reputation as a business-friendly country. By removing the requirement for a local partner, the country is sending a message that it is open to foreign investment and is committed to making it easy for businesses to set up and operate in the UAE.

The change is likely to be particularly beneficial for small and medium-sized businesses, which may have struggled to find a suitable local partner in the past. By removing this requirement, the UAE is making it easier for these businesses to set up operations in the country.

The new CCL is also expected to encourage more foreign investment in the UAE's real estate sector. Previously, foreign investors were limited to owning a maximum of 49% of a property in certain areas. Under the new law, foreign investors can own 100% of properties in designated areas, which is expected to boost investment in the sector.

Overall, the new law that allows 100% foreign ownership of companies in the UAE is a significant step forward for the country. It is expected to attract more foreign investment, create new job opportunities, and help to diversify the UAE's economy. By removing the requirement for a local partner, UAE is sending a message that it is open to foreign investment and is committed to making it easy.

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