The United Arab Emirates’ government has announced that foreign investors will be permitted to establish and fully own onshore companies – lifting restrictions preventing overseas entities from owning controlling stakes in the country’s lucrative education sector.
On 19 May, the UAE Ministry of Economy announced that the amended Commercial Companies Law will take effect on 1 June 2021, paving the way for foreign entities, for the first time, to own 100% stakes in domestic companies.
The change in law will enable overseas entities – including operators and investors – to take majority control of UAE-based education companies, in which they are at present permitted to own only minority stakes. Foreign private equity firms, for instance, will be able to take control of education providers and overseas education companies could pursue takeovers of UAE-based operators.
Shaun Robison, chief executive of Dubai-based consultancy BBD Education, told this publication: “The recent announcement from the Ministry of Economy regarding foreign ownership of onshore companies is welcome news and a huge step the right direction for the economy as a whole.
“In the past 12 months, the UAE has seen a marked increase in foreign direct investment, and this additional security will naturally attract traditional investors and businesses that were previously turned away with this legislation.
“The education sector will naturally see the benefits of this in more ways than one, and the knock-on effect for schools means that student enrolment will see a bounce, and investment in the education sector will become more diversified.”
Abdulla bin Touq Al Marri, Minister of Economy, said: “The amended Commercial Companies Law aims at boosting the country’s competitive edge and is a part of UAE government efforts to facilitate doing business.”
Bin Touq added that the amendments will boost the UAE’s appeal as a destination for both foreign investors and entrepreneurs. It will further strengthen the country’s position as an international economic centre and encourage the flow of investments to the country’s vital economic sectors.
A previous foreign investment law in 2018 allowed foreigners to own up to 100% of some businesses, and foreigners could already own up to 100% of those registered in designated business parks known as ‘free zones’.
Date published: 26 May 2021