Dubai Economy has issued guidelines clarifying the procedures for full ownership for foreign investors, which began earlier this month in accordance with Federal Legislative Decree No. (26) of 2020, which amends certain provisions of Federal Law No. (2) of 2015 regarding the ownership of commercial companies.
The strategic decision enhances the investment attractiveness of the UAE and its advanced position on the global economic map, while strengthening the competitive advantages Dubai enjoys as an ideal investment destination, stated Dubai Economy. The decision will accelerate the UAE's economic recovery and add to the gains the country has made so far. It will also help to further improve Dubai's already high rankings in international investment indicators and leading global indices in terms of ease of doing business and business expansion.
Dubai's economy began implementing the new foreign ownership decision on June 1. Investors seeking full ownership can complete the required procedures through the service channels of Dubai Economy or the 'Invest in Dubai' digital platform. A total of 59 investors in Dubai have already taken advantage of the new decision. Commercial activities for which full ownership has been sought include general trading, construction, jewelry, gold, pearls, luxury watches, food, and car and truck trading. In the industrial category, the sectors targeted for full ownership were metals and construction, flooring, building materials, food, water production, and paint. A kindergarten, a primary and secondary school and a hotel were also taken over 100%
According to guidelines posted on its website, Dubai Economy, 100% foreign ownership is possible for more than 1,000 commercial and industrial activities, except for economic activities of strategic importance, which are found in only seven sectors.
The status of existing business licenses that allow 100% ownership of activities and include an Emirati partner remains unchanged according to the partnership agreement (MOA) and the decision of the partners. Dubai Economy has clarified that a reduction of the Emirati partner's percentage share of 51% or his withdrawal from the partnership is possible in accordance with the legal procedures.
Full ownership does not entail any change in the current procedures or requirements for licensing, except that it is no longer mandatory to have an Emirati partner or to set a fixed quota share for him/her. The guidelines also state that no additional fees, guarantees or capital are required for full foreign ownership.
Dubai Economy also stated that while it is not possible to convert the legal form of a company from an LLC (Limited Liability Company) to a Sole Proprietorship under a foreign name, as per the existing law, the license can be transferred to a one-person limited liability company. Full ownership does not apply to commercial agencies, as these are regulated by the Commercial Agencies Law. Branches of foreign companies do not require an Emirati agency.
- 59 Dubai investors have benefited from the decision so far
- No additional fees, guarantees or capital required for full foreign ownership
- 100% foreign ownership is possible for more than 1,000 commercial and industrial activities
- To obtain a license or amend the articles of association, investors can register with 'Invest in Dubai'
- Branches of foreign companies do not require an Emirati agent