How to Setup a Business in UAE Mainland?
Changes in Full Foreign Ownership Law – Business Setup in UAE Mainland
Earlier, Full foreign ownership is prohibited by law is known by everyone who wants to establish a company in UAE Mainland. A foreigner is not allowed to setup a business in UAE mainland without a sponsor who is local.
However, with time things have changed and the government has decided to give full ownership to ex-pats as well. This stops the issue of being dependent on a local emirati for your own business. Foreign Direct Investment Law, Decree-Law No. 19 of 2018, published in Q4 2018 is issued to give relaxation in strict laws against foreign trade in UAE and to provide 100% ownership in Dubai mainland to foreign traders under a few sectors.
A positive list and a negative list were introduced. The list of activities that were open for hundred percent ownership by expats was called the positive list and the one with the list of activities without the allowance of 100 % ownership is called the negative list.
What does the Positive List Include?
Activities, as well as the share capital requirements, are included in the positive list. Sectors included are – agriculture, industrial, and service sector. The list includes 122 activities. Each of these activities is approved under each industry to be eligible for hundred percent expats ownership. This step has opened many doors of opportunities for foreign investors to Setup Business in UAE mainland.
A few activities amongst the many from the list are- Administrative and support services, Agriculture, Art and entertainment, Construction, Educational activities, Healthcare, Hospitality and food services, Information and communication, Manufacturing, Professional, scientific and technical activities.
Requirement for Business Setup in UAE Mainland with 100% Ownership?
There are a few conditions to get a hundred percent ownership under this law.
- Share Capital Requirement
The share capital requirements can range from 2 to 100 million AED. This cost is dependent upon the industry and the business activity. Any company related to Hospital activities requires 100 million AED as the share capital. Similarly, other companies have different requirements. Manufacturing and similar industries have a varying requirement of share capitals which is dependent on the type of manufacturing activity. For example, a company Manufacturing Sports related equipment may need 3 million share capital, whereas that Machinery equipment may need 100 million AED share capital.
- Other Conditions
A few more conditions need to be satisfied by the foreign investor to avail a hundred percent ownership. These conditions vary with the sectors and activities. A few conditions that are necessary to be fulfilled are as follows-
- New Technology- Using new technology is important for complete ownership in the UAE mainland.
- High added value- Recognition of a high added value is required.
- Research & Development- Contribution to research and development is required.
- Requirements of Licensing entities- It is necessary to meet the requirements of the UAE licensing entities.
Who can Apply for Full-Foreign Ownership?
- Companies and Projects listed under the Positive List
To apply for complete ownership, the following steps should be followed –
- Business activity in Positive List and Legal Form (Limited Liability Company or Private Joint Stock Company) is selected. The capital present should not be less than the minimum requirement.
- Mainland Business License application is submitted in DED for approval
- A business name is selected
- Approvals of entities related to company activity is also necessary and is to be obtained.
- Permission is obtained and License is received after paying fees
- Opening a corporate bank account
- The License is registered with the Ministry of Economy
The license application approval period for activities under the positive list is five days maximum.
- Any existing company willing to change to an FDI Company
An existing company willing to transform into an FDI company may do so if the legal form is of one of the following types -A Mainland UAE LLC or a Private Joint Stock Company.
- A Project License not under the Positive List
If a project license is not under the positive list then also a person can apply for complete ownership. An application for review has to be submitted to the competent authority of FDI. The recommendation is then forwarded to the ministry of the UAE cabinet.
There is transparency in application procedure in Dubai with the FDI handling applications with the Department of Economic Development (DED) and the Ministry of Economy.
Role Of Radiantbiz
Radiantbiz provides all round solution to all business setup queries whether it is an offshore, a mainland, or a free zone setup. We are transactional banking and trade finance experts and will help you in managing your corporate bank account.
We will guide you through the steps of obtaining a license with ease. We have various packages to fit with your dream business and help to get the company that you desire to run.