30 Oct Establish your company now with 100% ownership in Dubai
Following the amendments to the UAE Companies Law (wholly owned by Mainland Dubai) which entered into force on June 1, It is no longer obligatory for foreign entrepreneurs to have local partners to set up a company in the UAE. Whereas, Minister of Economy Abdullah bin Tok Al-Marri stated that doubling the benefit from the competitive atmosphere that characterizes it is the main goal of the UAE government encouraging commercial activities. And in the past year, The UAE has announced a law allowing 100% foreign ownership of companies. This was one of many measures aimed at attracting investment and foreigners who have been hit hard by the coronavirus outbreak. Where foreigners can own up to 100 percent in “free zones,” Under previous laws that were first passed in 2018.
The prevailing law that foreigners wishing to set up a business in the UAE mainland had to follow was to find a partner who was an Emirati national and the UAE companies law had this requirement.
Despite the prevailing impression that the economic power of international and local shareholders can be modified to some extent when it comes to ownership and decision-making in the company, There are still many questions and inquiries regarding the feasibility of these arrangements.
Highlights of the new law
And in line with the newly issued laws, Which provides for the possibility of 100% ownership by foreigners in the mainland, some of the following major amendments have been introduced to the activities of investors and shareholders:
For commercial registration in Dubai, UAE companies no longer need to own majority shares of shareholders and local representatives in the Emirates.
– According to the policy of the United Arab Emirates formulated in the form of a decision of the Council of Ministers.
Allowing foreign capital to own commercial organizations affiliated with the Emirates. Any companies in the country.
Initial Public Offerings (IPO) allow listed companies to sell 70% of their shares. Previously, this percentage did not exceed 30%.
– If the company has taken, through its directors or a partner, actions that have caused loss of revenue, The owner of the company shall have the right to sue the company included in the list before the court.
Local governments are allowed to recognize the capitalization and percentage of ownership and the necessary approval for business on the land in accordance with the guidelines of the Cabinet decision. Previously, these powers were limited to the Ministry of Economy or the economic sector of each emirate.
Presiding over meetings is no longer confined to Emiratis. It may be headed by foreigners.
– Likewise, The ban on foreigners serving as members of the board of directors has also been lifted.
Because of the global pandemic, The general meeting of shareholders will also hold an automatic vote.
– The possibility of dismissing a board member or company president from his position due to abuse of power.
What is the reason why the UAE allows full ownership by foreigners?
The UAE is trying to enhance its popularity with global buyers, entrepreneurs, start-ups and the best talent markets around the world. It strives to facilitate business creation by removing existing barriers and opening up the economy, And push the country into a stronger position as it prepares for the next 50 years.
How full ownership law might affect startups
Speaking of flexibility in setting up a business, New investors in the UAE market have a strategic advantage. Non-Emiratis of all nationalities can now fully own their businesses under the new legislation. As long as they work in one of the permitted industries.
How property law will affect an existing business
The registration of an existing limited liability company can be renewed by selling the shares of UAE nationals to foreigners and making them the sole owner of the company.
According to the amendment, Existing companies must “relocate” by January 2, 2022. To bring the quorum, notice, and meeting specifications in line with the amendment, Local office liaison materials may need to be modified.
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