UAE allows business setup with 100% ownership in UAE firms from June 1. The UAE has been attracting foreign investments with its business friendly policies and regulations. Many business houses and small scale businesses have expanded and set up respectively. They are hugely benefiting from the UAE governments policies for business development in the UAE.
The businessmen can set up Business with 100% Ownership the UAE in the mainland, free zones and offshore. In the free zones, 100% ownership was always possible. However, in the mainland, a foreign investor could only get 49% shares in the company and the rest 51% was with a local sponsor in the past. Now this rule has been abolished for commercial activities in Dubai. Professional activities still require a local service agent (Emirati national) who does not hold any shares, but we need to provide him/her remuneration annually.
Main points of Business Setup with 100% Ownership
This move from the UAE government allowing 100% foreign ownership thus aiming at strengthening its position in the international market. The flow of foreign investment is expected to increase substantially.
The UAE government has amended Article 10 of Commercial Companies Law. In December 2020, the UAE government had announced major changes to the Federal Commercial Companies Law No.2 of 2015. The law can into effect from June 1.
In the words of Minister of Economy, Abdulla bin Touq Al Marri, “The amended commercial law aims at boosting the country’s competitive edge and is a part of the UAE government’s efforts to facilitate doing business.”
The investors can invest in trading, commercial, and manufacturing activities. Each Emirate will specify the list of activities that have the option of 100% foreign ownership. Abu Dhabi has issued its list. DED has issued guidelines of the procedures of the commercial companies law. According to the law, DED permits 100% ownership to more than 1000 commercial, and industrial activities. However, it excludes activities in seven strategic sectors.
The full ownership is not applicable to commercial agencies that come under Commercial Agencies law. The existing business setups with 100% ownership and an Emirati partner remains the same. According to the law, a reduction in the share or withdrawal from partnership of Emirati partner is possible.
However, the amendments to the law does not change the procedures for licensing and no additional fee, guarantee or capital is required.
‘Invest in Dubai’ is the digital platform available to get license or amend the MoA. The platform helps in getting initial approvals, trade name reservations, getting instant license, etc.
The UAE government is bringing out new policies to move up in the international market. This amendment aims in creating 700000 companies by 2030. The move has already attracted more than 59 investors who timely advantage of the new law. Some of the activities mentioned in the list issued by DED for instance are building contracting, steel construction contracting, Electromechanical Works trading, Specialized Vehicle trading, trading crude oil abroad, Supermarket, Department store, and many more. Beyond View is happy to help you to set up the business under the new law, without any physical office, local sponsor, and hidden cost in just an hour. Contact us for more details.