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100% Foreign Ownership of Companies

A long-awaited move, discussed for many, many years, the UAE has now abandoned the mandatory requirement of having a GCC national as a 51% shareholder in onshore companies. Formerly, only certain activities and professions were exempted from the rule of the need of a local shareholder. This has been hindering many foreign corporations to enter the UAE market, unless such entities chose a free zone as its domiciles, by that not being able to operate legally on the mainland.

The Changes at a Glance

  • 100% ownership by expatriate investors and company owners
  • 51 amended articles and new ones, mainly focusing on the regulation of provisions of establishing companies with limited liability shareholding
  • Law effective from 1 December 2020 as per amended Federal Law No. 2 of 2015 and Cabinet Resolution No. 16 of 2020


Alcohol consumption is no longer illegal in the UAE. Previously, residents as well as tourist were required to possess an alcohol license to legally drink alcohol, both at home and in licensed place, such as e.g. restaurants, bars, and clubs. From now on, anyone who drinks or is in possession of alcohol or sells alcoholic beverages in authorised areas without an alcohol license will not face penalties.

The Facts at a Glance

  • Alcohol can be consumed privately and in licensed places
  • Alcohol still cannot be consumed in public, such as e.g. open beaches or on the streets
  • The legal age to consume alcohol remains set to 21 years of age
  • Anyone caught selling alcohol to minors will be prosecuted and punished
  • This federal law will now apply to all emirates
  • Each emirate has “the right to issue legislation regulating this issue”
  • Law effective immediately

Unmarried Couples & Consensual Sex

Until now, it has been illegal for an unmarried couple, or even unrelated flatmates, to share a home in the Emirates. The law will now allow for the legal cohabitation of unmarried couples.

The changes in law also restrict the punishment in the sexual offenses under duress, threat, or force. Now, consensual sex will not be punished by the law. However, consensual sex will be punished by the law if the victim is under 14 years of age or if the victim is deprived of their will due to their young age, insanity or mentally challenged or if the culprit is a first degree relative of the victim or responsible for their upbringing or usual care or has an authority of the minor victim.

A person convicted of committing sexual intercourse with a minor or mentally challenged person by force would be punished by the death penalty.

  • Law effective immediately

Divorce & Inheritance

Previously, unless otherwise applied for and very costly, the Sharia had been applied for divorce and inheritance cases. From now on, if a couple were married in their home country, but get a divorce in the UAE, the laws of the country where the marriage took place will apply. The new law mentions joint assets and joint accounts, and that the court could be called on to mediate if there was no agreement between the two parties.

The changes also cover wills and inheritance.

The Changes at a Glance

  • Divorce: The law of the country of marriage does apply for divorces
  • Inheritance: A person's citizenship will dictate how their assets are divided among their next of kin, unless they have written a will
  • Exception for property purchased in the UAE, which will be managed according to UAE law
  • Law effective immediately

Suicide and 'Good Samaritans'

Suicide: Formerly, when someone attempted suicide and survived, such person could be prosecuted – this has now been decriminalised. However, assisting a person with an attempted suicide will be punished with an unspecified jail sentence.

"Good Samaritans": Until now, it was possible to be held accountable for an injury or death caused while helping of someone in need, to give CPR or other first aid.
cit. “any person who’s committing an act out of good intention, that may end up hurting that person, will not be punished”.

  • Law effective immediately

Harassment & Assault

Honour crimes will now be treated as murder.

There will no longer be a distinction of crimes known as "honour crimes", where a male relative can get a lighter sentence for assaulting a female relative under the guise of "protecting honour". Such incidents will be treated as crimes, like any other assault.

There will be tougher punishments for men who subject women to harassment of any kind, which is thought to cover street harassment or stalking. The law appears to be a reiteration of legislation brought in last year that brought tougher offences for harassment and recognises that men could be victims of harassment or stalking.

The punishment for the rape of a minor or someone with limited mental capacity will be the death penalty.

  • Law effective immediately

EXTRA – Saudi Arabia

Unmarried Couples now allowed to share Hotel Rooms

The Kingdom of Saudi Arabia has now announced changes for international travellers. Unmarried couples can now share rooms while visiting Saudi Arabia.

Until now, tourist couples had to provide proof of marriage, but this has now been relaxed for international tourists. Saudi nationals, however, will still have to provide marriage proof before sharing rooms.

The new law also permits foreign women traveling alone to Saudi Arabia to book rooms.
Previously, foreign female tourists under the age of 45 had to be accompanied by a man, when they travelled to the country during Hajj.
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