Emirati Participation One of the most significant changes introduced by the Decree Law is the abolishment of the general requirement for Emirati majority participation in companies and branches of foreign companies in the UAE (so-called 49-51- rule). The 49-51 rule was previously stipulated in Art. 10 of the CCL.

Art. 1 of the Decree Law amends Art. 10 of the CCL and the new Article 10 introduces a committee which shall decide on activities with strategic importance for the UAE as well as the licensing requirements for companies engaging in such activities. One of the requirements for a company engaged in an activity with strategic importance is the determination of a specific percentage of Emirati participation in either the capital or management of that company. The capacity to decide on the activities with strategic importance as well as the respective licensing and corporate requirements for companies has been levied on the local licensing authorities – the Departments of Economic Development in each respective Emirate.

This means that there is no general requirement for an Emirati shareholder in a limited liability company (“LLC(s)”) anymore. However, the respective Department of Economic Development may decide on activities of strategic importance which would then again require a certain percentage of Emirati participation – either in the share capital or the management of the LLC. Finally, the requirement of having a local service agent for a branch of a foreign company has been repealed by Art. 6 of the Decree Law by abolishing Art. 329 of the CCL.