UAE is known for its pro-business culture and conducive infrastructure for foreign investment. Therefore, it is great news that we are another step closer to 100% foreign ownership of companies on the UAE's mainland, but there are still a number of questions and details which need to be clearly outlined.
With effect from June 1, the UAE allows 100% foreign ownership on commercial LLC companies of mainland companies. How did this come about? In November 2020, a Presidential Decree was issued announcing major changes to the foreign ownership rule in the UAE's Commercial Companies Law 2015. Much to the joy of entrepreneurs from all over the world, the United Arab Emirates did away with the need of an Emirati shareholder or agent for UAE companies. Until then, companies in the UAE needed a certain amount of shareholding by Emirati nationals or by an Emirati agent, depending on the type of company it was.
The initiative, which allows investors worldwide to do business in Dubai digitally without having to live in the UAE, is expected to attract more than 100,000 companies.
The latest changes will represent a sweeping reform to the UAE's foreign direct investment landscape and should significantly ease doing business in the UAE for many international companies. The changes come in the context of other recent liberalizing legal reforms and the government's stated intention to further open up the economy to foreign investment.
According to the earlier announcements, all current and previously licensed businesses in the UAE can amend their statuses according to the new amendments to the commercial companies law. The amended law allows natural and legal persons to establish and own 100 per cent stake in their companies, regardless of nationality. The law, however, will not apply to some companies that are excluded based on decisions by the Cabinet and those that are either wholly-owned by federal or local governments or their subsidiaries.
By setting up your company in Dubai, one can have the potential to reach over a billion people from neighbouring countries in the Middle-East, Eastern Europe, Africa, and West Asia. However, there is a lot of legal paperwork that needs to be turned in.
We believe that the most important phase of a business is at the beginning. Therefore, over the years, we helped several businesses to build their presence in the Emirates.
We want to get to know as much about your company and its plans for doing business in the UAE as possible so that we can determine the best company set up for your business.
The new foreign ownership rule will reaffirm the UAE`s global position as an emerging market for and a global hub for foreign investment. International companies with onshore UAE subsidiaries or branches should start reviewing their contractual arrangements with local partners now, in preparation for the opportunity to take advantage of the forthcoming changes.
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