Did you know Dubai offers 100% foreign ownership to expatriates wanting to fully own their businesses in Dubai? Yes, that’s right. According to the new amendment to the Commercial Companies Law ( CCL ) dated June 1, 2021; Dubai now allows budding entrepreneurs to have complete ownership of their businesses, therefore making a significant contribution to Dubai’s bolstering economy. Sounds like a win-win?

This amendment made by the government of UAE, has made a significant impact to the overall economy of the country therefore positioning UAE as a global epicenter and one of the biggest destinations in the world for employees looking for a change.

In this blog, we will help you understand the benefits of having 100% foreign ownership in Dubai along with the steps required to be followed if you want to establish your own business in the bustling city of towering skyscrapers and vibrant cultures.

UAE’s Legislation on Foreign Direct Divestment

The previous norm within the UAE’s mainland stipulated that foreign nationals seeking to establish a business in Dubai or elsewhere in the UAE, outside of free zones, were obligated to hold a minimum of 51% ownership by UAE nationals, as per the UAE Companies Law. Despite the perception that arrangements could be made to adjust economic interests between foreign and local shareholders to some extent, uncertainties lingered regarding the efficacy of such agreements in terms of economic control and decision-making within the business.

However, a significant shift occurred with the enactment of the Foreign Direct Investment Law (FDI Law) in 2018, supplemented by Cabinet Resolution No. 16 of 2020. This legislation ushered in a relaxation of foreign ownership restrictions, particularly in specified sectors identified as the Positive List, allowing for up to 100% foreign ownership in UAE-based enterprises listed therein. To qualify for this exemption from foreign ownership limitations, applicants were required to fulfill a series of demanding criteria, including substantial capital investment, the integration of advanced technologies, and the engagement of UAE nationals in the workforce. Moreover, the final approval authority rested with the relevant licensing body.

What is 100% Foreign Ownership in Dubai?

100% business ownership in Dubai grants you exclusive authority over your enterprise, positioning you as the solitary proprietor with unparalleled autonomy over its functioning. Within the dynamic economic landscape of Dubai, there exist no constraints on foreign ownership, paving the way for individuals to assume complete ownership without the necessity of local UAE partnerships. This unique setup offers myriad advantages:

Absolute Control: As the solitary proprietor, you wield full control over all facets of your business operations, from strategic decision-making to day-to-day management, enabling swift and efficient implementation of your vision.

Freedom from Local Partnerships: Unlike in many other jurisdictions, Dubai’s business environment liberates entrepreneurs from the requirement of having UAE nationals as partners, facilitating streamlined operations and minimizing potential conflicts of interest.

Potential Tax Incentives: Depending on the specific structure and nature of your enterprise, you may avail yourself of various tax incentives and benefits that are often exclusive to businesses with 100% foreign ownership, enhancing profitability and long-term sustainability.

For aspiring entrepreneurs contemplating the establishment of a new venture or seeking expansion opportunities in Dubai’s burgeoning market, the prospect of 100% ownership presents an enticing avenue worth exploring. By embracing this model, individuals can capitalize on the city’s vibrant commercial ecosystem while retaining full autonomy and control over their entrepreneurial endeavors.

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Benefits of 100% Foreign Ownership in Dubai

1. Elimination of Local Service Agent Requirement:

With the implementation of the new policy, foreign investors are no longer mandated to engage a UAE National Service Agent (NSA) when establishing their businesses. Effective from March 30, 2021, this amendment streamlines the setup process, eliminating an additional bureaucratic step and enhancing operational efficiency.

The Ministry of Economy and the Department of Economic Development (DED) in each Emirate have seamlessly updated their systems to facilitate the NSA transfer process, ensuring comprehensive record-keeping and client awareness through notarized transfer documents.

2. Transition Opportunities for Free Zone Businesses:

The government has extended unprecedented opportunities for free zone businesses seeking to transition to the mainland UAE. Under the revised policy, investors enjoy enhanced flexibility in selecting commercial space locations and allocating staff visas.

Full ownership grants access to UAE companies and government, augmenting ICV scores for tendering processes, thereby facilitating smoother business operations and fostering success in the country’s vibrant market.

3. Streamlined Corporate Governance:

Legislative amendments have ushered in enhanced corporate governance regulations applicable to all companies operating in the UAE. These regulations include provisions such as:

• Mandating a 21-day notice period for general meetings.

• Granting stakeholders with a minimum 10% share capital the right to demand meetings.

• Authorizing virtual meetings and calls, harnessing modern technology to facilitate communication and decision-making processes.

These updated regulations signify a crucial stride toward elevating corporate governance standards in the UAE, promoting transparency and accountability across sectors.

4. Introduction of Joint Stock Company Status:

A significant paradigm shift in the foreign ownership landscape is the introduction of provisions allowing companies to transition into joint stock firms. Subject to approval from relevant authorities, companies can now raise capital through Initial Public Offerings (IPOs), divesting up to 70% of their shares—a substantial increase from the previous 30% limit.

This transformative opportunity presents a gateway to financial prosperity, equipping investors with a diversified array of avenues to secure investments and drive profits.

These sweeping reforms underscore the UAE’s commitment to fostering a conducive business environment, attracting foreign investment, and nurturing sustainable economic growth.

Businesses that are eligible for 100% foreign ownership in Dubai

In a landmark move, the UAE government has extended its policy framework to facilitate 100% foreign ownership in various sectors, marking a significant shift in the nation’s economic landscape. This strategic initiative not only fosters a more investor-friendly environment but also aligns with the UAE’s vision of becoming a global business destination.

Dubai: Pioneering Opportunities for Foreign Entrepreneurs

Dubai, renowned as the pulsating heart of business in the UAE, stands at the forefront of this groundbreaking policy shift. A remarkable 1,061 out of 2,300 economic activities listed by the Department of Economic Development (DED) are now open to full foreign ownership, eliminating the requirement for local partnerships or sponsors. Whether you aspire to launch a startup or establish a trading or manufacturing enterprise, Dubai’s inclusive approach paves the way for entrepreneurial endeavors to flourish.

Moreover, the recent amendments extend to professional services, offering entrepreneurs the freedom to establish ventures with complete foreign ownership. However, adherence to the sole establishment legal form and engagement of a local service agent remain essential prerequisites.

Key sectors in Dubai eligible for 100% foreign ownership include manufacturing, trading, consultancy, professional services, and IT and telecommunications, among others.

Abu Dhabi: A Beacon of Investor-Friendly Policies

In tandem with Dubai’s progressive stance, Abu Dhabi boasts 1,105 registered commercial and industrial activities eligible for full foreign ownership. This concerted effort by Abu Dhabi underscores its commitment to fostering an open and conducive business environment, aimed at attracting Foreign Direct Investment (FDI) and positioning the emirate as a global investment hub.

Sharjah: Embracing Full Foreign Ownership

Similarly, Sharjah has embraced a policy of full foreign ownership since June 2021, signaling a pivotal step towards economic diversification and international integration. This forward-looking approach eliminates capital requirements and additional fees for foreign investors, while also allowing branches of foreign companies to operate autonomously without the need for local agents.

At Arnifi, we believe in maintaining complete transparency. Hence, if you are seeking opportunities as a budding entrepreneur, we can help. Check out www.arnifi.com for more information.

About Arnifi

Arnifi is digital first Corporate service provider helping companies enter the Middle East region, starting with UAE and Saudi Arabia markets. Founded and backed by professionals from Amazon, Souq and other large companies operating in KSA – the team understands what it takes to succeed as a startup in both UAE and Saudi Arabian markets, apart from going through the setup process multiple times. Arnifi will provide a truly digital experience to entry and scale up of companies both UAE and Saudi Arabia. The Arnifi promise is simple, yet revolutionary, use technology and a great team to provide transparency, efficiency and great customer experience in the whole process. Check out at – www.Arnifi.com for more details.

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