Open Mainland Company with 100 Foreign Ownership in UAE

The new rule now allows foreign investors of any nationality to have 100 % ownership of a company in the UAE.

Open Mainland Company with 100% Foreign Ownership in UAE

The UAE government has opened the economy further for foreign investors by allowing 100 % ownership in specific industries from June 2021. Entrepreneurs and foreign investors can be sole owners in commercial LLC setups in Mainland Dubai. It will do away with the requirement of compulsorily having local national of the UAE as a partner having a majority shareholder stake. 

Local sponsor earlier despite having 51 percent or more stake in the company, did not participate in the company's day-to-day affairs. Some also entered into an arrangement to get a fixed fee yearly with no interference from their side in business operations. The new rule now allows foreign investors of any nationality to have 100 % ownership of a company in the UAE. 

Approved business activities with 100% Foreign Ownership

In Dubai, the new laws will apply to 1061 business activities, out of the total 2300 economic activities provided in the detailed list by the Department of Economic Development (DED). It means that about half of the manufacturing and trading activities are eligible for 100% ownership by foreign nationals. To be eligible, one has to bring in technology, capital, and mandatory employments of the UAE nationals as the new have conditions. 

However, in Abu Dhabi, the 51% - 49% shareholding with a UAE Local Sponsor will continue even now. The laws were revised to push the UAE economy, improve ease of doing business and raise the competitiveness of the UAE business community. While Dubai and Abu Dhabi have started their new positions, other emirates are in the process of doing so. 

Why is the role of business consultants becoming more crucial now?

The new laws interpretation and implementation mean existing businesses will need the assistance of the consultants to amend the business structures, documentation, licenses, and tax liabilities. New investors will look to them for providing their expertise in setting up the business under the new laws.      

An existing LLC business in the mainland have to get the amendments done in the following process:

  • Application to the authorities for license amendment.
  • Amendment of Memorandum of Articles (MOA) of the company.
  • Fees for an amendment to be paid to the Department of Economic Development (DED).
  • Approval is required for the new ownership in Mainland Business Setup in Dubai from the Department of Economic Development.

For starting a new 100% ownership business in a Dubai Mainland Company, one needs to choose from the approved list of 1061 business activities. However, if those approved activities fall under the service and professional consultancy sectors, a local national will be required. They will not be shareholders in the company but only be associated as service agents to carry out specific administrative work. 

Starting a new 100% foreign-owned company on the mainland is simple in 6 steps.

  1. Choose the type of business.
  2. Decide the company name.
  3. Complete the documentation for company formation.
  4. Apply for the licenses and get approval from the authorities, including business licenses.
  5. Open a business bank account, allowing 100 % repatriation in foreign currency.
  6. Apply for business Visas and overseas employees Visa

The overall cost of Setting Up Business in Dubai with 100 % foreign-owned business in Mainland Dubai depends on the nature of the business activity, location, and the number of visas required. For service and professional license in mainland company registration, the minimum cost will be approximately 8000 Dirhams while for commercial license it will come to a minimum cost of 14000 dirhams. There will also be additional expenses towards business consultancy fees, visa expenses, office rent, and miscellaneous expenses.  

Conclusion 

Business Consultancy like Absher business Consultancy can play a significant role in setting up a 1005 foreign company in mainland Dubai. Their role will be crucial in the new environment where UAE Allows 100% Foreign Ownership. The 100% ownership of the business in Dubai mainland will benefit all concerned, including government, business consultants, foreign investors, and the local business economy.