How 100% Ownership Law In The UAE Can Be Beneficial For Foreign Investors

A visible rush of foreign investors is seen in the UAE after the announcement of 100% ownership. The UAE government has made historical changes in the UAE on the 1st June 2021 by allowing 100%  ownership to foreign investors. Yes, since 1st June 2021, the foreign investors are allowed to go for Mainland Company Formation in  Dubai UAE without any local investment. However, many investors are still confused about the benefits of 100% of ownership. If you are one of them, this article may remove your confusion. However, let’s have a look at the initial clarification announced.

Clarifications made by UAE Economic Department

Before foreign investors were only allowed to possess 49% of the share in a business. The rest of the shares must belong to a UAE National. However, the new law confirms that foreign investors can set up a company in the UAE without allocating any share to any UAE nationals. But, the announcement still leaves many queries in terms of Mainland Company Formation in  Dubai UAE. To clear any kind of confusions, the UAE Government clarifies some certain factors:

  • Any investor can complete the entire process of company registration through the department of Economy in Dubai.
  • The reduction share percentage of UAE national is now possible as per the latest circular.
  • Existing business licenses will not be cancelled and the Emirati partner who signs in MOA with the foreign investor will remain unchanged.
  • If you are a new investor in the UAE, you should know that Full ownership doesn’t bring any change in the previous requirements in company registration.
  • The law of complete proprietorship is variable in the different emirates.

The department of the UAE economy also confirms that an investor who applies for full-proprietorship must guarantee financial securities. However, Dubai has announced some strict sets of laws. Therefore, if you are planning for a mainland or Freezone Company Formation in Dubai, UAE, you should always seek assistance from expert lawyers and Attorneys in UAE rather than relying on a local agent.

Note: Changing an LLC to 100% Proprietorship is not possible but the existing license can be converted for a single person with limited liability. Consult an expert for Free Online Legal Advice in Dubai, UAE.

How the new changes benefit the Government and foreign investors

After the announcement, foreign investors are looking for ways to invest in Dubai. However, now the question is how It can benefit foreign investors and the UAE Government at the same time. We bring a  basic overview of the benefits of the new amendments.

  • The new law provides foreigners with a clear structure of proprietorship.
  • 100% foreign ownership helps foreign investors to make a better future plan and operate the business in his or her style.
  • 100% foreign ownership also boosts the local economical changes in the UAE. When more foreigners start investing in the UAE, it will raise the country’s economy higher.
  • The new amendments boost the confidence of entrepreneurs in the Middle East market.
  • The new strategy will help the UAE attract more foreign investments.
  • Especially in the time of Covid-19 when all the countries are suffering from financial loss, this move in the UAE can be a milestone in the swift growth of the Economic Condition of the UAE.
  • A significant impact is also noticed in the international trade activity of the country.

How Can you learn more?

If you are an entrepreneur looking to learn more about 100% foreign ownership, you may consult our experienced lawyers in Dubai at eLegal Consultants. Whether you are planning for a free zone or Mainland Company Formation in  Dubai, UAE, you may consult our experts for the best service. We also provide Company Management Services in the UAE.

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