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The Government of the United Arab Emirates has recently promulgated the Federal Law No. (32) of 2021 on Commercial Companies to replace Federal Law No. (2) of 2015 on the organization of commercial companies’ affairs inside the United Arab Emirates. This Law aims to develop and enhance the business environment and State capabilities and status. It regulates the companies pursuant to the international variables particularly those related to the rights of shareholders and partners. It also enhances the flow of foreign investment and corporate social responsibility.

The Emirati Legislator took into consideration all the difficulties and challenges that hindered the foreign investors in the light of acting according to Law No. (2) of 2015. Several material amendments were made to such law to attract foreign investors and encourage them to invest within the United Arab Emirates. As a result, this will help the national economy to flourish and will facilitate the investment process among the citizens and foreign investors. One of the amendments is that the new Commercial Companies Law allows the foreign investors to establish companies and own them at 100 % without requiring a specific nationality. This means that the foreign investor’s shareholding will not be limited to 49 % as it was under the Federal Law No. (2) of 2015 but the percentage will reach 100 %. In addition, the foreign company which wishes to open a branch inside the United Arab Emirates will not be required to have an agent of the State citizens.

The new Commercial Companies Law will serve several categories inside and outside the United Arab Emirates, including the commercial companies established in the State, the branches of companies, the representation offices of companies established outside the State, the international companies, investors, businessmen from inside the State, foreign investors from different countries of the world, entrepreneurs, owners of small and medium enterprises, family business companies and all the members of the society.