The United Arab Emirates announced Wednesday it will lift a cap on non-local ownership and allow full foreign control of business ventures from June 1, 

The reform, originally flagged in 2019, will make it easier to do business in the Gulf state and encourage investment, the economy ministry 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," said Economy Minister Abdulla bin Touq al-Marri.

The decision abolishes a longstanding law that limits foreign ownership to just 49 percent.

To dodge the limit, some of the seven emirates that make up the UAE -- including Dubai -- have for years established free trade zones where foreigners can own up to 100 percent of their business.

The UAE's economy is the second-largest in the Arab world, behind Saudi Arabia.

It counts as the most diversified, particularly thanks to Dubai which gains 95 percent of its income from outside the oil industry.

The capital Abu Dhabi sits on the majority of the UAE's vast oil reserves.

The country ranks 16th in the World Bank's index on the ease of doing business.

The decision opens up 13 major economic sectors to unrestricted foreign investment, including renewable energy, agriculture, transport and e-commerce.

In 2019, the UAE was the top destination for foreign direct investment in the Arab world, attracting nearly $13.8 billion, according to the United Nations Conference on Trade and Development (UNCTAD).