We previously released a client alert (available here) outlining key amendments to the UAE’s Companies Law, which came into effect on June 1, 2021. Most importantly, these amendments eliminated a section of the Companies Law that required 51 percent minimum Emirati ownership of any onshore company. Since that update, there have been a number of developments, including:

1. The enactment of Cabinet Resolution No. (55) of 2021, which sets out a list of activities with ‘strategic impact’ (the “New Resolution”).
2. An expanded list of activities that may be carried out with 100 percent foreign ownership in the Emirate of Abu Dhabi.

Strategic Impact Resolution

The New Resolution applies federally and provides a list of activities that have a ‘strategic impact’, which require (a) foreign (natural and legal) persons wishing to invest in or form companies that undertake an activity with ‘strategic impact’ to first apply for approval; and (b) a certain minimum level of Emirati ownership. To gain approval, foreign persons must submit an application, depending on where the company is or will be formed, to the authority in such Emirate that is responsible for administrating company affairs (the “Competent Authority”). In Abu Dhabi and Dubai, for example, such authority would be their respective Departments of Economic Development. Once the Competent Authority receives an application, it will forward the application, within five business days, to the federal authority responsible for regulating the ‘strategic impact’ activity referenced therein (the “Regulatory Authority”). The New Resolution grants each Regulatory Authority the power, upon receipt of an application, to (a) approve or reject the application; (b) determine the minimum level of Emirati ownership required in the new or existing company; (c) determine whether, and how many members of, the board of directors the foreign person may appoint; and (d) subject the investment to any other conditions or controls. Once an application is approved, it is sent back to the Competent Authority, who will oversee the investment in, or formation of, the company in accordance with the conditions set by the Regulatory Authority.

The list of activities with a ‘strategic impact’ and their respective Regulatory Authorities are set forth below. Activities related to fisheries (No. 7 below) require 100 percent Emirati ownership and therefore prohibit foreign investment in such activities.

Expanded List of Activities in Abu Dhabi

The Abu Dhabi Department of Economic Development recently issued an updated list of 1105 activities (available here) that may be carried out by 100 percent foreign ownership, which include a number of amendments to the initial list. The amendments align with the Abu Dhabi government’s efforts to attract more foreign direct investment, promote an open and flexible business environment and enhance the position of Abu Dhabi on the stage of global investments.

Below are only some examples of the new activities added to the list:

1. Private Funds Investment;
2. Investing in Oil & Natural Gas Projects;
3. Investing in technology projects, establishing and managing them;
4. Management Services for Investment Funds;
5. Commercial Enterprises Investment, Institution and Management;
6. Real Estate Enterprises Investment, Development, Institution and Management; and
7. A large number of changes and additions centered on agriculture, manufacturing and the trade of various goods.