06 Sep Everything foreign companies need to know about the 100% ownership law in the UAE
With the entry into force of the new commercial law, Which provided the opportunity for foreign investors and entrepreneurs to set up companies in the mainland and own them entirely, This law came as an affirmation of the UAE government’s keenness to attract more foreign direct investment and establish an open and flexible business environment.
Now what should foreign investors know about this new law?
There are many aspects that we are keen in Etqan to shed light on to ensure that our customers reach a full understanding of the new law and all the variables and developments in the world of
Business, Read on to find out more..
What are the companies and activities that can be 100% owned?
Foreign ownership continues to apply to companies carrying out activities that have a “strategic impact”. It is expected that a list of limited activities that will remain restricted to local ownership will be issued. As well as a list of activities that will be open to 100% ownership.
The authority to make decisions regarding the contributions of UAE nationals to the capital of the company has been entrusted to the governments of several emirates.
So we should expect different regulations for Dubai, Abu Dhabi and the rest of the UAE for example.
What steps should companies take to achieve 100 percent ownership?
Companies already established in the UAE that are considering converting to 100% ownership should evaluate their existing local partner agreements to ensure a smooth path to 100% ownership if desired.
To obtain 100 percent ownership, The owner of the 51 percent shares must appear before a notary public and sign his share of the shares.
How can companies achieve 100% ownership?
Ownership of 100% of the shareholders with a stake of 51% requires the presence of the Notary Public and the execution of the Share Transfer Agreement in order to effect the change, The LLC will therefore have to enter into a commercial discussion with its local partner or agent regarding the matter and agree on the transfer between the shareholders.
Companies considering setting up a new LLC or foreign branch in the UAE but seeking more clarity on the situation are advised not to wait, she advises. Because the process for 100% ownership may take some time to be properly implemented and distributed to all relevant government departments in the UAE.
instead, Companies can continue to establish a local presence.
What are the conditions that must be met for 100 percent foreign ownership
In order for the existing foreign company to be 100% owned, it will need to change the share shares. In the case of converting limited liability companies, in which the shares are divided into 51/49, this will require drafting the shareholder’s resolution, concluding an agreement to transfer shares, and amending the memorandum of engagement, and this in turn requires approval Shareholders to transfer the shares from the party owning 51% to the other party to convert the company LLC into a 100% owned company, where they have to sign the shareholder resolution, the share transfer agreement and the memorandum of engagement in front of an Emirati notary public, in both Arabic and English .
Authentication can be done remotely via Webex , or it can be done using a power of attorney issued by one or more shareholders to act on their behalf.
Once the legal documents are documented, Companies can apply to the Ministry of Economic Development to complete the license.
The company must also update all other relevant licenses, such as licenses issued by the Department of Immigration, and the Ministry of Labor, and the Ministry of Economy, and modernizing other contractors like her bank, Telecommunications and other service providers in the Emirates.
How will the UAE market be affected by the new law ?
This law is expected to have a significant positive impact on the UAE market. While encouraging more companies to invest in the UAE
And the transition of companies in the various refrigerators to the structure of the continental companies now that 100% ownership is a viable option.
For more inquiries, contact us . We are pleased to assist you at any time
Contact us today and get a free consultation to implement all your business plans!