The UAE government had announced in November 2020, that major amendments were being made to Federal Commercial Companies Law
Earlier, starting a mainland business in UAE had the mandatory requirement of having a UAE national as a 51% shareholder in the company. Starting 1 June 2021, the long-awaited amendments have been made under the New Commercial Companies Law and have opened its doors to investors throughout the world, who can now own 100% ownership of their mainland business and are free of requiring a UAE national as a shareholder.
What are the benefits?
Under the new law, this will eliminate the procedures of taking signatures of the local sponsor for government-related work and to provide KYC of the UAE National in the Bank. Also, these companies will be eligible to do business in the local market freely and will be free to take on government or semi-government projects. This rule is new rule is applicable for both existing as well as new business owners.
Advantages after the new amendment in law:
- Eliminates the need for a third party to hold a stake in your company
- It will cut the cost of operations and boost investor confidence
- It will attract the majority of big multi-national conglomerates and which will boost the UAE’s competitive edge
- Will cut down time on looking for an Emirati company or person to act as a sponsor
- Eliminate documentation requirements of the local sponsor due to the partnership
Which business activities are eligible for 100% ownership?
The Department of Economic Development has approved 1,000+ Economic activities. The list covers more of the Trading and Manufacturing activities. The listed activities are eligible for 100% ownership for foreign nationals. There will be no requirement to add a UAE National as a Local Agent or as a Shareholder.
If we have to talk in terms of numbers, we have divided the number of business activities into categories, falling under different sectors that are eligible for 100% ownership in Dubai.
Frequently Asked Questions:-
Can we make a license if it is a single shareholder?
Yes! you can be the single shareholder on the license. The license will mention Single Owner (LLC-SO) and 100% shares to one person.
Can we convert our Existing License to a 100% Ownership Company?
Yes! You can go through a license amendment, but only after approval of the local who states that they do not have any objection.
Do we need to show some minimum investment or share capital at the bank?
No, there is no such requirement to show any proof of minimum investment or Bank letter.
We have a Professional activity License can we remove the Local agent from the license?
In Dubai, few activities have been amended wherein, the local service agent is no longer required.