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Know everything about 100% ownership in UAE

by Annitta

The UAE draws investors, business owners, and entrepreneurs from all over the world. Due to its widespread appeal, it is assumed that about 90% of the population is foreign-born. While foreigners are free to launch enterprises in the UAE, they have historically been unable to retain 100% ownership in Dubai while doing so on the mainland. Now, this is not the case.

Changes -Dubai Mainland changed to 100% ownership?

Up until recently, business owners establishing operations on the UAE’s mainland could only keep a 49% ownership stake. A local sponsor would hold the remaining 51%.

These sponsors could be either private citizens or businesses. If there were any individuals, they had to be Emirati citizens and be in a position of authority. Sponsors received a yearly fee for their assistance but had no say in decisions or ownership of earnings.

This regulation did have a few exceptions. Professional services firms could have foreign nationals as the sole owners.

International business owners also had the option of establishing their operations in a free zone, where they would always enjoy 100% ownership, zero currency restrictions, 100% exemptions from customs taxes, and the ability to repatriate their profits and cash.

The new regulations’ official wording is as follows:

According to the requirements of Federal Decree-Law No. 26 of 2020 revising the provisions of Federal Law No. 2 of 2015 on Commercial Firms, “Foreigners are authorised to incorporate companies with 100% complete ownership.”

The law eliminates the need that commercial businesses have a significant Emirati shareholder or agent, granting non-Emiratis of all nationalities full foreign ownership of onshore companies founded by them. Check out Freezone company setup

Additionally, instead of the previous 30% cap, enterprises that want to become joint stock corporations can now sell through initial public offerings (IPOs) no more than 70% of the company.

Eligibility requirements for UAE enterprises with 100% ownership

Those who want to start or relocate a business to Dubai are currently those who will be most affected by the change in ownership regulations. 100% foreign ownership is permissible for around half of the commercial ventures that Dubai’s Department of Economic Development (DED) has approved.

Industry sectors including oil and gas, telecommunications, and transportation are notable exceptions to this rule.

The laws are a little bit different outside of Dubai. While Abu Dhabi does allow 100% ownership in rare circumstances, international business owners are often required to follow the 49/51 criterion and collaborate with a local sponsor. Other emirates, like Sharjah and Umm Al Quwain, have not yet provided specifics about how they will implement 100% foreign ownership.

Benefits of firms in the UAE being owned entirely by foreigners

The goal of the new foreign ownership legislation was to increase the UAE’s appeal as a destination for foreign investment.

Additionally, the move would increase market competitiveness, which will help the UAE economy grow and diversify. Now that they are legally able to do so, foreign investors can run their businesses without any restrictions or obstacles relating to administration.

How to launch a 100%-owned company in the UAE

Partnering with a regional authority on company creation is the first stage in launching a UAE firm with 100% foreign ownership. The following four-step process will be walked you through by your dedicated contact at Business Incorporation Zone (BIZ), who will also communicate with all necessary authorities.

1. Choosing your business ventures

You must first lay out your anticipated business operations and match them up with the allowed list that the DED has made public. It is crucial to check that your selected activity or activities allow for 100% ownership before moving forwards. The ideal setting and setup type for you may depend on the activities you choose.

2. Picking and submitting a name for your business.

You must then decide on a name for your company. In the United Arab Emirates, there are specific naming conventions that you must follow while picking a company name.

Simply put, you must refrain from using vulgar or unpleasant words. Avoid abbreviations and well-known corporate names when calling your business after yourself; for example, Dave Mann Consulting rather than D Mann Consulting.

3. Submitting an application for a licence

You may now submit an application for your UAE trading licence. This request is addressed to the local DED or its equivalent in the emirate of your choice. This procedure is frequently done online.

4. Submitting applications for visas

For employment in the UAE, you must have a residency visa. A chest X-ray, blood test, medical exam, and biometric scanning are just a few of the processes in the visa application process.

You may also sponsor others for visas if you hold a UAE trade licence. This could be a household helper like a housekeeper or a spouse, parent, or child.

5. Establishing a business bank account

Finally, in order to transact here, you need a corporate bank account. It is wise to collaborate with a local authority once more because obtaining banking services is not always simple for those who do not reside in the GCC. Get assistance from the top business setup Dubai consultants. 


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