100% Ownership in Dubai Mainland

100% Ownership in Dubai Mainland

Foreigners forming a company in the United Arab Emirates would no longer need a United Arab Emirates shareholder or agent. As per amendments in UAE company law, 100% Ownership in Dubai Mainland has been implemented since June 1st 2021.

As per the guidelines published by Dubai Economics, 100% ownership in Dubai Mainland is available for more than 1000 commercial & industrial activities. (File Size: 500MB).

“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,” Minister of Economy Abdulla bin Touq Al-Marri has said.

Last year, the United Arab Emirates announced a law authorizing 100% foreign ownership of businesses, one of many measures aimed at drawing investment and foreigners who were severely harmed by the coronavirus outbreak.

Previous law

If expats wanted to start business in Dubai , UAE, the general rule was that 51 percent of the shares had to be purchased by UAE nationals (or entities wholly owned by UAE nationals). The UAE Companies Law included this requirement.

 

Points in the amendment to focus over

Following changes has been done as per the new policy.

  • During business registration in UAE Mainland, it is no longer necessary for UAE companies to have a majority of Emirati shareholders and local agents.
  • According to UAE cabinet policy established in the form of a cabinet decision, 100% foreign ownership of commercial organizations on the UAE’s Mainland, i.e. onshore corporations, is permitted.
  • An initial public offering (IPO) allows a joint stock partnership to sell 70% of its stock. This percentage of the population was formerly as low as 30%.
  • If the firm, through its directors and general managers, participates in an activity that causes the company to lose money, the owners have the right to sue the corporation in court.
  • Allows local governments to acknowledge necessary capitalization, shareholding percentages, and consent for onshore business establishments subject to cabinet resolution policies. Previously, these powers were limited to the Ministry of Economy or each Emirate’s Economic Departments.
  • Corporates meetings are no longer expected to be supervised over by an Emirati; instead, they may be presided over by an expat as well.
  • The prohibition on foreign nationals serving on the board of directors has also been repealed.
  • As a result of the worldwide epidemic, computerized voting will be used at annual general meetings.
  • It is possible that corporate officials or business chairs will be dismissed from their posts if they abuse their power.

Why is the 100% ownership in Dubai Mainland law implemented

The UAE focuses on building on its already established popularity as a market for global buyers, entrepreneurs, startups, and top talent from around the world.

UAE has implemented the new law and major reasons are mentioned below:

  • To attract more and more foreign investors to apply for mainland company formation in Dubai
  • For UAE economic growth and development.
  • Ease of doing business for foreigners in UAE
  • Preparation for future and boosting the economy of UAE.

How will new businesses be affected by 100% foreign ownership Law

In terms of flexibility of business establishment, new investors in the UAE market have a strategic edge. Non-Emiratis of all nationalities can now entirely own their businesses under the new legislation, as long as they are in one of the permitted industries.

Effects on the existing businesses

The registration of an existing LLC corporation can be renewed by selling the shares of UAE nationals to foreign nationals and becoming the sole owner of the company.

According to the Amendment, existing businesses must ‘change their positions’ by January 2, 2022. To match quorum, note, and meeting specifications with the Amendment, LLCs’ Memorandums of Association may need to be amended.

Frequently Asked Questions

How to open a company in Dubai?

Starting a company in Dubai is easy with the help of Radiantbiz. You can also follow these steps which will help you if you are planning to get trade license in Dubai.

  1. Select the right jurisdiction.
  2. Choose the trade name and check its availability.
  3. Apply for license
  4. Choose office space and business location
  5. Some legal paperwork required and get pre approval from concerned authority
  6. Get your trade license

What is Minimum investment to start business in Dubai?

Cost of business setup in Dubai vary on various factors like Jurisdiction, Number of Owners, Business Activities and many more. Radiantbiz has designed a cost calculator for business setup in UAE for its customers which gives the precise value.

Can foreigners start a business in Dubai?

Yes, if you are a foreigner, You can start business in Dubai. All you need to contact Radiantbiz.

How RadiantBiz will help you?

Every venture may have unique requirements like location, customer convenience, logistical feasibility, and banking services.

We at RadiantBiz strive to understand these unique precepts and provide expert and reliable consultation to our clients for Company Formation in UAE. We help our clients with updated laws and governing regulations, awareness of their rights, and cost effective business solutions tailor made to their business needs and budget.

Get an appointment booked with our experts now and get the solution to all your business related queries and problems.

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