Sharjah, UAE
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Own Dubai Mainland Company with 100% Ownership
A recent development in the UAE has brought joy among business entrepreneurs around the world. Effective from First June 2021, the UAE has allowed 100 % foreign ownership in commercial LLC companies in Dubai mainland. This amendment in existing Government laws does away with the mandatory requirement of an Emirati national as a shareholder or an agent depending on the kind of business one has.
With 100 % ownership of a mainland business in the UAE, what does it mean for the entrepreneur and their business? Earlier Emirati nationals were the majority shareholders of 51% even though they did not participate in the day-to-day operations.
The new rule, in short, means that any entrepreneur, irrespective of nationality, can now gain full ownership of their company in the UAE. Earlier, to qualify for 100 % foreign ownership, one had to choose only from the Government's positive list of allowed businesses. In addition to that, there were several requirements such as bringing insufficient capital, use of technology, and mandatory employment of UAE nationals in the company.
There will still be restrictions on total ownership in certain sensitive sectors like oil and gas, telecommunications, and utilities. The local licensing authority in each Emirate can take decisions in respect of the new laws which were earlier vested with the Ministry of Economy or the Economic Departments of each Emirate.
Impact of 100% foreign ownership
The UAE government, by removing the shareholding cap, has opened up the economy. Though UAE is still the most appealing and preferred market for foreign investors, start-ups, foreign Multinationals Companies, and destinations for top talents globally, the idea is to rebuild post-Covid and plan a growth road map for the future.
Advantages for existing companies, investors, entrepreneurs
While the full effect of this new law will take some time, there is no doubt that 100% ownership will attract overseas investors, especially those who were hesitant to enter the UAE because of minority ownership laws. Even foreign companies that had offices in UAE witty local participation will benefit from the new rules. The development will help many companies in Dubai Free zones to establish themselves in the mainland. The existing business in the UAE can also amend their status, buy out the local shareholding, and take control of 100% of the company.
How to start a 100% owned company in Dubai?
Nearly 80 % of Dubai's population comprises expatriates. Many of the expatriates are running their own business along with a local sponsor. Now under new rules, foreign investors and existing expatriates can have 100 % ownership. There will be no need for a local shareholder with a 51% stake. They can at best be an agent of the company in the service and consultancy sector.
All said and done, the 100% ownership of the business in Dubai mainland will be a game-changer for both the Government, business consultants, and foreign investors.
