100% Ownership in Dubai Mainland
Written By Antima – 21st April’22
What is the 100% ownership in Dubai mainland?Benefits of 100% Ownership in Dubai Mainland: A Guide for Investors
As an Expat, you must think that you have to find a sponsor who belongs to the Emirates if you want to establish a mainland business setup in Dubai. But this is not the case anymore. Earlier, an Emirati had to own 51% of your company’s shares. However, now you can have 100% foreign ownership in Dubai for your mainland business even as an expat. This has been possible due to a law passed on 1st June 2021 by UAE’s Ministry of Economy allowing 100% ownership in Dubai mainland of your company even to the foreigners.
The new law allows international investors and entrepreneurs to have 100% ownership in Dubai mainland. This clears the path for the emerging businesses to now fully own their Dubai mainland business setup.
Additionally, there were extra procedures that applicants had to go through for the foreign ownership exemptions, including significant share capital donations and hiring UAE nationals.
Difference between freezone and mainlandFreezone vs Mainland: Choose the best option for your business in Dubai
If you are looking to start your own business you can choose your jurisdiction from Freezone, Mainland. Each jurisdiction has its own positive and negative points. The area you choose for your business decides what you can or cannot do as an entrepreneur.
If you have a freezone license, you cannot do your business activity outside the free zones however you can carry out your business anywhere in case you have a mainland license.100% ownership in UAE, 100% repatriation of capital & profits, 100% corporate & personal income tax exemptions but you cannot import into the mainland areas when you have a freezone license.
On the other hand, a mainland corporation requires an office space and official approval before it can start. As you are aware the UAE cabinet revised the CCL to allow you to create a company in Dubai with full ownership. This was done in order to improve the economy of the UAE, this also inculcates an expat friendly environment and make UAE the top preference of entrepreneurs for doing business.
Why should you get a mainland company formation license?With mainland business license, you get to have a broader business scope. Hence, you get access to a better chance of expanding firm internationally.
These changes may also stimulate the long-term advantages of a mainland business setup in Dubai.Unlike free zone firms, with mainland license one can freely trade with any company, located within and outside of the UAE.
- No limitation in business operations to a certain location or area.
- You can freely do business with any organization, inside or outside of the UAE – free zones, mainland or offshore.
- The prospects for growth and greater profitability increase
- No minimum capital requirement
- You can obtain a resident visa
- 100% ownership of the company
New mainland license law will amend the old companies law. As per new law, it will remove the general requirement for 51% UAE national ownership of UAE LLCs. Anyone regardless of nationality, can now fully own their mainland business setup in Dubai.
Key points to remember in the 100% foreign ownership law?Below is a summary of all the significant adjustments made in the most recent ownership law amendment:
- It is no longer necessary for UAE entities to have a majority of Emirati shareholders and local agents when forming a corporation in Dubai.
- The UAE government issued a cabinet resolution to permit 100% ownership in mainland Dubai.
- Currently, a joint stock company can sell 70% of its shares in an IPO (IPO). Earlier, this number had fallen as low as 30%.
- In the event that the corporation engages in an action that results in the firm suffering a loss, the shareholders have the right to file a lawsuit in court.
- According to cabinet resolution policies, it enables the local governments to recognize the necessary capitalization, shareholding ratios, and approval for mainland firm formation. These rights were previously held by the Ministry of Economy and its constituent departments.
- A foreigner can now supervise corporate meetings at the company.
- There is no longer a restriction on foreigners serving on the board of directors. As a result of the pandemic, electronic voting is now permitted at annual general meetings.
- In case, any top executives or business shareholders take negative advantage of their positions, the new rule permits remove them
What is the importance of 100% ownership for foreign investors in UAE?Maximize your business potential with 100% ownership in Dubai Mainland
The UAE government aims to put a positive spin on its already established appeal as a global market. The new rule has eliminated the existing obstacles and widened the economy for foreign investors.
- Building a favourable legal environment for business establishment in the UAE. So that it may aid in the ease of doing business and the overall economy of the country.
- Future of the economy is safe and secure by increasing investment and commercial opportunities for foreign investors.
- Fulfilling the business community’s needs in the UAE. The country’s attraction to foreign investors, companies, startups, and other entities has seen an exponential growth, due to this new law.
- It will be allowed for non-citizen foreigners to run companies under their complete authority.
- Investors no longer need to find a UAE national to have a company in the UAE mainland.
- Investors will have freedom when it comes to the operation and management of company
The expats who want to start a business in the UAE mainland can benefit from this change the most. Investors and Entrepreneurs can also take advantage of this change. If you couldn’t get a sponsor to own 51% of your company shares then now is the time to go ahead with your company formation and get 100% ownership of the company.
Latest news related to 100% ownership of mainland companies in UAEUAE announces exciting new developments in mainland company ownership
There is no doubt that the amendment will attract more international investors and businessmen from all over the world. The UAE government is trying its level best to lure the stakeholders so that it may help the economy in the future.
The proposition to permit 100% foreign ownership of UAE businesses might significantly increase the UAE’s attractiveness to global business owners. Particularly those who would have been reluctant to enter the market because of shareholding restrictions.
Majority of old restrictions are lifted after the law for 100% ownership has changed and it has been approved for certain business activities(under industrial and commercial license). You don’t have to pay extra fees or need more capital to make changes in the businesses which have been continuing from before the law was changed.
However, you still can’t get 100% ownership of businesses like a salon or restaurant as you require “professional licenses” which are still not 100% ownable. Foreign company branches in the UAE no longer need to search for a “National Service Agent”.
Business activities in commercial field includes.
- Generat Trading
- Luxury Watches
- Food and Others
Business activities in the industrial field include:
- Building Materials
- Water Production
- Flooring Metal, etc.
A limited liability structure can be converted to single-person ownership.
Steps for effecting the changeEasing the transition: The steps for changing 100% ownership of mainland companies in UAE
You can switch from 49% ownership to having 100% ownership by following some steps. You have to make changes in your existing MOA that is registered with the economic department. By taking the necessary actions legally, you will be able to make changes:
- A board resolution from shareholders consenting to changes
- Consent from the economic department
- Registration of updated MOA
- Payment of any fees
- Amendment of trade license
However, in accordance with the present regulations, a limited liability company with multiple shareholders can only change to a single-owned LLC and not a sole proprietorship.No new fees, capital or guarantees are needed.
The effect of the 100% ownership law on the UAE economyHow the 100% Foreign Ownership Law is Boosting Investment and Driving Economic Growth in the UAE
The amendment is attracting foreign investors and entrepreneurs. They are taking full advantage of the new law as the hassle of convincing a sponsor for 51% ownership is no longer an issue.
This change has uplifted the image of the Emirates as a business and investment hub. This is bound to take the economy to a better and new height.The interest that this decision has invoked is visible in the increasing investment from expats. This decision has been beneficial for both the country and the expats.
- Growing investment
- Increasing number of foreign investors
- Improving the country as an economic hub
- Business friendly environment for expats
- Making the country the most preferred investment destination and improving the image as a foreigner friendly country.
Frequently Asked QuestionsClearing the confusion: A list of common questions about 100% ownership of mainland companies in UAE
What is the time required to get the mainland license in Dubai?
You could get a mainland license in less than a week in Dubai. However, if you work with an efficient business setup consultant such as RadiantBiz, you can get the license in just 24 hours.
What is the cost of acquiring a mainland license in Dubai?
Well, the cost of getting the mainland license in Dubai totally depends upon the type of your business, office location, business activity and many other factors involved. The best way to get an instant estimate is our cost calculator. This will help you in getting a quick quote for the cost and proceed accordingly.
What is the process of trade name registration for the mainland business setup in Dubai?
The authority responsible for this is the Department of Economics (DED). When deciding on a name for your mainland business in Dubai, you must submit an application for the registration of your trade name. The reservation process just takes a day.
Which authority issues the mainland license in Dubai?
Department of Economic Development (DED), Dubai is responsible for issuing the mainland license in Dubai.
Can you own 100% of a company in Dubai?
Yes, as per the latest regulations, the UAE government has assigned 100% ownership in Dubai mainland. Now a foreign expat can have complete ownership of the company.
Can you expand your business with Dubai mainland license?
Yes, with a mainland license in Dubai, you are able to freely expand your business to other areas of Dubai and the UAE.
Get expert assistance from RadiantBizMaximizing your chances of success: Expert tips for business setup in Dubai Mainland
Dubai has emerged as the world’s most sought-after market for business establishment, expansion, or investment. For onshore businesses, foreign nationals will now be able to hold 100% foreign ownership in Dubai mainland, which will be a game-changer for business growth in the UAE and Dubai, especially for investors who want to invest in the UAE mainland but were constrained by the existing laws, which only permitted local residents to own 51% of the share capital.
RadiantBiz can be an ideal business partner for you, who can help you through the process of obtaining a license and help you establish a mainland business setup in Dubai. We have been associated with many renowned entrepreneurs with their UAE ventures. Connect with our experts for a professional guidance and strategy building for a successful mainland business formation in Dubai.