With over 200,000 new migrants each year, Dubai fascinates expats from around the globe. Many people are drawn to Dubai by the abundance of stunning residential units, low taxes, and high salaries. The city lures highly qualified professionals, especially in the technology and trade industries.
Dubai is one of the most appealing cities to invest in real estate due to its tallest structures, record-breaking achievements, and inescapable grandeur. The city is poised for enormous economic growth in the coming years, drawing international talent, greater overseas investment, and even more remarkable developments.
Dubai’s economic department has issued guidelines, which started in early June 2021, detailing the process for foreign investors to obtain full ownership of commercial enterprises. The aim is to increase the UAE’s appeal as a desirable location for entrepreneurs, foreign investors, and talent, as well as to reinforce the emirate’s position as an international economic center and stimulate investment in key areas.
Amended guidelines for full ownership
Dubai Economy published guidelines for full ownership for foreign investors in an effort to enhance the UAE’s investment attractiveness. The UAE’s economic recovery will be accelerated by Federal Decree-Law No. (26) of 2020, this amends some sections of Federal Law No. (2) of 2015 addressing commercial company ownership. It will also contribute to Dubai’s already impressive performance in leading global indices and international investment indicators linked to the comfort of doing business. The decision will hasten the UAE’s economic recovery and build on the country’s achievements so far.
Full ownership makes no changes to present legal frameworks or criteria, except that having an Emirati partner or specifying a preset quota ratio for him/her is no longer required. The regulations also specify that complete foreign ownership requires no additional capital, fees, or guarantees.
According to Dubai Economy’s website, complete foreign ownership is permissible for over 1,000 industrial and commercial activities, with the exception of economic operations with a strategic influence, which is limited to seven sectors.
General trade, jewellery, pearls, gold, contracting, foods, luxury watches, as well as vehicle and truck trading, were among the commercial activities for which full ownership was pursued. Metals and construction, building materials, water production, flooring, foods, and paints were among the industrial sectors. A kindergarten, a primary and middle school, and a hotel also requested complete ownership.
A lot of investors in Dubai already have benefited from the new policy empowering them to incorporate and wholly operate onshore firms. Click on the below link to view the full list of activities open for 100% foreign ownership:
How does it affect the present business licenses?
As per the memorandum of association and the partners’ agreement, the legality of current business licenses with full ownership of the operations and an Emirati partner remain unaltered. The Emirati partner’s percentage share can be reduced from 51 percent or the partnership can be terminated as per the legal proceedings.
It was also explained by the Dubai economic department that under existing legislation it is not possible to alter a firm’s legal form from a limited liability company (LLC) to a sole proprietorship under a foreign name, however, the permit can be shifted to a one-person firm with limited liability. Commercial agencies are exempt from full ownership since they are governed by the Commercial Agencies Law. An Emirati agent is not required for foreign company branches.
How to obtain a license?
As Dubai has established itself as a worldwide and regional economic centre, numerous investors are drawn to the emirate to establish enterprises and companies.
Investors interested in full ownership can complete the necessary requirements through Dubai Economy’s service channels or the Invest in Dubai digital platform that provides the most efficient way of establishing a business in the city.
The portal offers a one-of-a-kind experience, allowing consumers to complete licensing requirements quickly and easily, permitting them to start their business in just a few minutes without visiting a service center. Initial authorization, trade name reservations, and license renewal services are all available through the site.
Even though the guidelines are easy to follow, it is best to take advice from a local law firm in such matters to avoid any discrepancy. We have extensive experience with company incorporation procedures and the drafting of all necessary paperwork. Connect with us to discuss your requirements in detail.
The UAE’s decision of 100% foreign ownership across the board is being hailed as a game-changer and a masterstroke. For years, this has been the most pressing demand from various corporate associations. Being a service-based economy and the world’s largest tourist attraction, the UAE can surely benefit from attracting more FDI in a variety of sectors, which is precisely what this change is aimed at.
A corporate reform like full foreign ownership will boost investor confidence while simultaneously lowering operational costs, which is a critical business requirement. The new rule would allow businesses to register for a business license without the need to have a UAE national as a partner. This will make the UAE an attractive investment choice for the majority of multinational corporations, boosting the country’s competitiveness.