A general view of residential skyscrapers and a beach in Dubai. Reuters
Inayat-ur-Rahman, Gulf Today
Dubai Economy has issued guidelines clarifying the procedures for full ownership for foreign investors that started from the beginning of June, in accordance with the Federal Decree-Law No. (26) of 2020 that amended some provisions of Federal Law No. (2) of 2015 regarding ownership of commercial companies.
The strategic decision enhances the UAE’s investment attractiveness and its advanced position on the global business map, while also reinforcing the competitive advantages that Dubai enjoys as an ideal investment destination, Dubai Economy stated.
The decision will accelerate the UAE’s economic recovery and add to the gains the country has made so far. It will also help further enhance Dubai’s already high rankings in international investment indicators and leading global indices related to ease of doing business and business expansion.
Dubai Economy has started implementing the new decision on foreign ownership effective June 1, 2021. Investors seeking full ownership can complete the procedures as required through the service channels of Dubai Economy or the ‘Invest in Dubai’ digital platform.
A total of 59 investors in Dubai have already taken advantage of the new decision. The commercial activities in which full ownership was sought include general trade, contracting, jewellery, gold, pearls, luxury watches, foods, as well as cars and trucks trading. In the industrial category, full ownership was sought in the metals and construction, flooring, building materials, foods, water production and paints sectors. A kindergarten, an elementary and middle school, and a hotel also sought 100 percent ownership.
As per the guidelines published by Dubai Economy on its website, 100 percent foreign ownership is available for more than 1,000 commercial and industrial activities, excluding economic activities with a strategic impact, which are in seven sectors only.
The full list of activities open for 100 percent foreign ownership can be viewed on: https://ded.ae/DED_Files/ded_other/Full_Foreign_Ownership_Activities.pdf.
The status of existing business licenses, where full ownership of the activities is available, and that include an Emirati partner, remains unchanged as per the Memorandum of Association (MOA) and the partners’ decision. Dubai Economy clarified that a reduction of the percentage share of the Emirati partner from 51 percent or his /her withdrawal from the partnership is possible according to the legal procedures followed.
Full ownership does not bring any change to current procedures or requirements for licensing, except that it’s no longer mandatory to have an Emirati partner or specify a fixed quota ratio for him/her. The guidelines also state that no additional fees, guarantees or capital required for full foreign ownership.
Dubai Economy also explained that though it’s not possible to convert the legal form of a company from LLC (Limited Liability Company) to a Sole Proprietorship under a foreign name as per the existing law, the license can be transferred to a one-person company with limited liability. Full ownership does not apply to commercial agencies, as they are regulated by the Commercial Agencies Law. Branches of foreign companies do not require an Emirati agent.
To obtain a licence or amend the Memorandum of Association, investors can log in to ‘Invest in Dubai,’ the unified digital platform which offers the most competitive means to launching a business in Dubai. The platform provides a unique experience, enabling customers to complete licensing procedures fast and smooth and launch their business within a few minutes and without having to visit any service centre.
The platform can be used for initial approvals, trade name reservation, and issuance of instant licences, Dubai SME licences, Intelaq licences, and DED Trader licences, in addition to licence renewal.
Meanwhile, the Sharjah Economic Development Department (SEDD) yesterday announced that from this month it would be implementing the full foreign ownership policy, allowing investors of natural and legal persons to own 100 per cent of commercial and industrial companies and practice activities in the Emirate of Sharjah.
This decision includes no requirements such as a specific capital or any additional fees for foreign investors, while allowing branches of foreign companies to conduct their business in the Emirate without the need for an agent of a foreign company.
Meanwhile, last month the UAE Ministry of Economy has made a very important announcement on Wednesday stating that the new Commercial Company Law with regards to 100 per cent Foreign Ownership will be effective from June 1, 2021.
The new law will enable companies to apply for business license without the requirement of UAE National as the partner of the company. The new law will enable UAE as an investment destination for majority of international conglomerates and this will boost UAE’s competitive edge.
Abdulla Bin Touq Al Marri, Minister of Economy, said, “The amended Commercial Companies Law aims at boosting the country’s competitive edge and is a part of UAE government efforts to facilitate doing business.”