There is 100% foreign ownership now while setting up a company in the UAE Mainland. The amendment has come from the Ministry of Economy. It is highly beneficial for foreign owners who are looking to set their foot on the UAE Mainland.
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Until now, for opening a Limited Liability Company in UAE there was a requirement of a UAE National. The UAE National had to sponsor the company and own the major shares (51%).
100% Foreign Ownership – Highlights of the New Resolution
Based on the resolution there are a few amendments in place. Now there is 100% foreign ownership across a list of permitted activities under the mainland license. (For Limited Liability Company structure).
As per sources, almost 122 business activities in the manufacturing, agricultural, and service categories are in the permitted list. The aim is to drive foreign direct investment in the form of share capital. The foreign investors who wish to start a mainland company in the UAE will bring in the funds.
The businesses will have an eligibility check to ensure they qualify for 100% foreign ownership. It will be through a review of various factors by each emirate. The new amendment has made it easy for any business owner to opt for 100% foreign ownership in the mainland.
Criteria for Qualifying for 100% Foreign Ownership in UAE Mainland
Apart from certain business sectors such as Finance, Banking, and Petroleum Projects, almost every other business activity is eligible for 100% foreign ownership in the UAE Mainland.
For a few high-value construction, chemical manufacturing plants, steel manufacturing, etc., there is a minimum share capital requirement for companies.
Depending on the industry sector, and the nature of the business activity, the government has a list of minimum share capital required to obtain a mainland license.
For example, a company manufacturing food products must have a minimum capital of AED 15 million to obtain a Commercial License.
The companies under 100% foreign Ownership must comply with the Emiratization targets as per the requirements stated by the UAE Ministry of Human Resources and Emiratisation (MOHRE).
Also, there is a share capital requirement for companies specific to industrial sectors such as construction-related activities.
The companies that develop large-scale infrastructure projects (e.g. airports and highways), and those that utilize modern production technologies and conduct industry-related research and development for the agriculture sector
Can Existing LLC Companies with UAE National Sponsor sift to 100% Foreign Ownership?
Yes, it is possible during the next renewal, however, it depends on a few factors first also on the current contractual agreement with the UAE National Sponsor and the exit clauses of the agreement.
Secondly, under meeting certain conditions and criteria the Ministry will issue 100% foreign ownership in UAE on a case to case basis currently. Hence, the transition from the current company structure to 100% foreign ownership is not so seamless and is dependent on a lot of factors.
What are the benefits for the Investors from 100% Foreign Ownership?
Investors have a preference towards the Dubai Mainland as the licensing authority is the UAE Government’s Department of Economy. So, the Trade License from the Dubai Economy has a higher credibility as it is directly issued from a government authority.
Previously, for setting up a Dubai Mainland Company the foreign owner had to appoint a Local Sponsor or Local Service Agent. They held 51% of the company shares and also helped in liaising with the Government authorities for trade license renewal, any special approvals, and more.
As per the amendment in Commercial Companies Law, there is no requirement to have a Local Sponsor for opening a Mainland Company in UAE. So, now foreign investors can easily set up their company in the Dubai Mainland.
Process of Setting up a Mainland Company in Dubai
The process of setting up a mainland company in Dubai is relatively easy. Especially, now there is no local sponsor/ local service agent requirement for registering a mainland company in Dubai.
The foreign investor must choose the right business activity, choose the business license type, and office space as per requirement and apply for the trade license from Dubai Economy.
The process of obtaining the Trade license is almost instant and the complete process of applying for the Trade License, document submission, approval, fee payment, and trade license issuance, will happen within 2 Working Days.
The foreign investor can get their company operational soon after they receive the trade license. They can apply for a bank account in UAE and start their business operations without any hassle.
Aurion Business Consultant will guide you throughout the process and provide the required business support at all stages. To know more about 100% of foreign ownership in the mainland or the process of changing the local sponsor in UAE, talk to our team right away!
Connect with our expert team right away to know more about the process of changing the local sponsor in the UAE.
