Foreign Investors Benefit From 100% Business Ownership in the UAE
The UAE government has been involved in economic diversification for quite some time now. Without a doubt, regular amendments to legislation have helped the country’s economy grow stronger, increase foreign investment, and move away from its dependence on oil wealth. Setting up a business in the UAE has become easier and more hassle-free over the years, due to the nation’s evolving Foreign Direct Investment (FDI) rules that are becoming increasingly foreigner-friendly.
A number of types of business ownership in the UAE are available. The country has historically had a number of free zones - 45 at the time of writing - which are not subject to foreign ownership restrictions. More recently, however, the amendment to the Commercial Companies Law (CCL), which came into force on 1 June 2021, has facilitated onshore company ownership among expat investors in the UAE. Specifically, it offers 100% ownership for foreign investors in the UAE.
The UAE Now Allows 100% Foreign Ownership
Prior to the 1 June 2021, foreign investors were prevented from 100% business ownership in the UAE as a majority - 51% - of onshore businesses needed to be held by a UAE national, known as an Emirati sponsor or partner.
Legislation regarding FDI ownership has changed considerably over the years, and has been moving towards the present-day picture, which can be summarised as follows: foreign company directors can have 100% ownership in the UAE. Beyond this headline, however, the amendment comes with the following additional benefits for foreign investors:
- No UAE shareholder is required
- Foreign parent companies are no longer required to appoint an onshore UAE agent
- No additional fees or capital for foreign owners
Benefits of 100% Business Ownership in the UAE
The 2021 amendment to the CCL has further revolutionised the UAE’s business potential, facilitating incorporations and enhancing the country’s reputation as an investment-friendly jurisdiction. Among the many benefits are:
- New foreign investors from around the globe will be attracted to the UAE and are increasingly likely to set up their businesses in the jurisdiction.
- The Emirates economic sectors will develop. To take just one example, environmentally-friendly activities like hybrid power plants, solar panels and other eco technologies will grow with the aid of overseas investment and talent.
- As a result of the new business incorporations and a rise in investment and talent, the UAE will see its global competitiveness skyrocket.
The new Dubai company ownership legislation reaffirms the UAE’s global position as an emerging market and global hub for foreign investment. Along with it, the country is looking forward to building positive commercial diplomacy with other nations. As for expat investors interested in incorporating their companies in the UAE, there is no better time to go ahead with your investment plans. Consult with our experts today for more information.
Written by
Adrian Oton
CEO, Europe Emirates Group