The UAE government decided to offer 100% foreign ownership to onshore (mainland) companies on June 1st. The UAE’s Ministry of Economy announced this news related to New Amendments to Commercial Companies Law. This law will be applied to all commercial companies in UAE which are owned by foreign investors.
What policy changed?
The Federal Commercial Companies law previously allowed foreign firms to get only 49 percent share in their UAE companies and 51 percent will be acquired by a local agent or Emirati-owned company. The rule stated about local sponsors (Emirati National) have a legal part in the new company set up the agreement if no shares were offered.
The amended law changed this policy and from June 1 the entrepreneurs and legal foreign business investors to own full ownership of their start-up in the UAE. The 100 percent possession of legal setup was only applied in some major Free Zone districts but soon it will be applied within UAE mainland boundaries.
Now, starting from June 1 Ministry of Economy will support international investors to attain complete control of their start-up. The business process will be directly controlled by the company owners and there will be no interference from Emirati agents (shareholders) or UAE local legal corporations.
The existing and newly registered companies in UAE need to update their license status according to New Amendments to the Commercial Companies Law.
This will Promote the UAE Business Market:
According to UAE Minister of Economy, Abdulla Bin Touq Al Marri stated:
“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”.
The foreign ownership restrictions under Commercial Companies Law will be decreased for entrepreneurs and foreign investors in UAE. The mainland companies can operate their business with ease and it will open new gates for global enterprises to capitalize on the growing potential of the commercial market in the UAE.
It will boost the confidence of entrepreneurs and will support the economy of major states of UAE (Abu Dhabi/UAE). The new ordinance can bring more investment freely and will fetch billions of foreign currencies into UAE.
Abdulla Bin Touq Al Marri said:
“The law comes in line with the UAE’s comprehensive vision to strengthen its position as a global investment destination,”. The Dubai government recently revealed a virtual company license for offshore companies.
The change in UAE mainland commercial company’s ownership constitution allows intercontinental investors to do business in UAE without dealing with local agent’s terms and conditions. The UAE population consists of around 80 percent of foreign investors which are large numbers and this law can be extremely helpful for the business community.
The demand for office space will increase in Dubai and Abu Dhabi which will help local office construction companies who had a rough experience due to the global pandemic. The existing mainland companies and fresh start-ups can avail maximum benefit out of this new bill.
“The amended law is a new step that reflects the importance of the UAE government attaches to supporting national economy in its various sectors and enhances its readiness for the future”; said Abdulla Bin Touq Al Marri, Minister of Economy.
The UAE government officials not planning for a limited business strategy but they are preparing for the next two or three decades. The Department of Economic Development’s goal is to create a flexible economic climate and encourage foreign traders to experience a friendly environment.
The UAE business structure is evolving to eliminate issues that form hurdles for local and international companies to invest in the Dubai market. This 100% foreign ownership rule will assure international company owners to start their business activities in UAE mainland by earning maximum profit and no extra rules applied to their startup.
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