Know Everything About 100% Foreign Ownership Options in the UAE Mainland
Know everything about 100% Foreign ownership new rules for business in the UAE. The recent relaxation by the UAE government has opened doors for more foreign investment. With the overall goal economy facing headwinds, investors were looking for opportunities to get a decent ROI since UAE, particularly Dubai, is considered a gateway city. Dubai is the gateway to Africa, the Middle East, and Asia. It is known for its low taxes, and it has set up the International Financial Centre, where the laws encourage foreign investment.
Dubai’s commitment to free trade and an investor-friendly environment has made it the ultimate destination of many Entrepreneurs and overseas companies. No wonder the growth rate of Dubai is better than many developed countries in the world.
100% ownership law
From the first of June 2021, the UAE government has allowed 100 % foreign ownership in Dubai mainland commercial LLC companies. The new amendments in the Emirates’ existing laws do away with the mandatory requirement of UAE locals as compulsory shareholders or service agents depending on the kind of business one has.
With 100 % ownership of a mainland business in the UAE, what does it mean for the entrepreneur and their business? Earlier locals were ropes in as sponsors with a majority shareholding of 51%. Earlier, to qualify for 100 % foreign ownership, one had to choose only from the Government’s positive list of allowed businesses.
Exempted sectors under the new relaxation
Specific sectors like telecommunications, utilities, and Oil & Gas still restrict total foreign ownership. Even as UAE allows 100 ownership now and the new laws are operational, the local licensing authority uses its discretionary power to take decisions. Earlier, the economic Department of the Ministry of the economy had the sole power in this respect.
The only category of business that has been exempted from having a local shareholder so far is the professionals. A professional license in Dubai allows expatriates to have 100 % ownership of the business. The categories of business that come under Professional license are Accountants, lawyers, business consultants, teachers, architects, technical services, and others. There was only one condition here that required an Emirati Citizen to act as Service Agent known as Wakeel e Khidmat. The service agent has no interference in the day-to-day running of the business.
Impact of 100% foreign ownership
By removing the cap on foreign shareholding, the UAE government has boosted the economy. The plan to rebuild the economy and boost growth after the pandemic has led to UAE opening its economy despite being the most preferred and attractive market for foreign investors, start-ups, foreign MNC’s and destinations for top talents globally.
Advantages for existing companies, investors, entrepreneurs
While the full effect of this new law will take some time, there is no doubt that 100% ownership will attract overseas investors, especially those who were hesitant to enter the UAE because of minority ownership laws. Even foreign companies with offices in UAE witty local participation will benefit from the new rules. The new development will help many companies in the free Zones of Dubai to establish themselves in the mainland. The existing business in the UAE can also amend their status, buy out the local shareholding, and take control of 100% of the company.
The process for getting amendments for an existing owner of an LLC company under the new law is as follows. It can be handled by a business consultancy offering pro services for business setup in dubai.
- Application for amendment of license
- Prepare Memorandum of Articles (MOA) amendment.
- Apply to the Department of Economic Development by paying the relevant fees.
- Obtain approval from the DED (Department of Economic Development).
How to start a 100% owned company in Dubai?
Nearly 80% of Dubai’s population is of expatriates. Many expatriates run their businesses with a local sponsor. Under new rules, foreign investors and existing expatriates can have 100 % ownership. There will be no need for a local shareholder with a 51% stake. The local Emirate can be a Service Agent consultancy, healthcare, and other service industry.
Starting a new company is simple
- Select the type of business
- Choose a company name
- Complete the paperwork
- receive the license notification
- open business bank account
- Process Visa
Business Link UAE is a Trusted Provider for Mainland Company Setup in Dubai. They will be well-versed with the new laws and know who the new registering authorities are. Their roles will be necessary for implementing the new rules for foreign investors. The 100% ownership of the business in Dubai mainland will be a game-changer for the Government, business consultants, and foreign investors.