100% Foreign Onshore Ownership Permitted in the UAE

UAE has always been one step ahead in implementing modifications in the existing policies that would promote the business spectrum in the country. The visionary leadership evaluated options and introduced changes from time to time. Making the country one of the most investor-friendly business destinations in the world. The decision to amend the UAE Commercial Company Law (CCL) has been one such initiative.

The main business regions like Dubai, Abu Dhabi, and Sharjah have a large expat populace. Those arrived in the country for setting up businesses and starting companies. Many of the immigrants have been apprehensive about business setup in Dubai and other regions in the country. Owing to the mandatory requirement of local Emirati sponsors. The local sponsor was eligible for 51% shares even though he doesn’t invest in the entity. This clause deterred many from opting to start a business in this prolific land.  

The UAE government has decided to abolish the subject requirement for allowing 100% onshore company ownership. Article 10 of CCL that details the requirement of local sponsors has been removed. Effected from 01 Jun 2021, expatriates can now establish an onshore company with 100% ownership.

Get in touch with Kiltons to know more about this new policy.

Dubai onshore company law – Current Scenario

The UAE government has been incorporating various policy amendments in previous years. In a bid to remain competitive in the global business spectrum and offer matchless benefits to the investors, the country has been alleviating complex business setup formalities in Dubai and other emirates. There also have been actions to prevent red tape that demotivates investors.

An immigrant can opt for an Onshore or Free Zone Company set up in Dubai. Onshore companies are also called Mainland companies.  The present policy change and withdrawal of the Emirati sponsorship clause are valid only for onshore companies. As expatriates were permitted to establish companies in 100% ownership in the Free Zone jurisdiction.

Although promulgated with effect from 01 Jun, it is expected to take around 04 to 06 months for it to be effective. The official formalities and documentation associated with implementing the rule may cause this delay. However, the ex-pats can consider setting up a business without the need for a local Emirati as a board member or an Emirati agent. Reach out to us for obtaining clear info in this regard.

Upcoming Changes in Dubai onshore company law

With the new ownership law coming into effect, entrepreneurs from non-GCC countries can consider setting up a business anywhere in the country. Identifying the right region that can fortify the company and offer optimal growth prospects would be the only concern. Experienced business setup services in UAE like Kiltons could be of great help in planning and company formation in the best domain.

It may be noted that the rule is not applicable to oil and gas industries. The extant regulations and policies would be continuing in those sectors. The expatriates can start companies in almost all of the other sectors. They can try for government contracts as well.

Exemption from corporate and personal tax is another advantage of an onshore company in the UAE. Having said that, the ambiguity concerning the liabilities is still existing. Earlier, the legal and governmental liabilities were resting on the local Emirati, who was 51% stakeholder in the company. Since the requirement has been abolished, the liability will be thrust upon the ex-pat. We foresee some of the teething troubles and confusion as the rule comes into effect. Subsequent modifications are expected to resolve all such issues.     

How will this new law impact UAE Business?

The Department of Economic Development (DED) is the authority for issuing Mainland business licenses. With 100% ownership permitted in the UAE, all are looking towards the organization to know more about the specific aspects of the latest policy. The list of business sectors that permit 100% ex-pat ownership is also awaited.

In the meantime, Abu Dhabi DED has released a list of 1100 activities, covering industrial and commercial sectors that could be 100% owned by expatriates. The Dubai DED would be releasing the list of 1000+ business activities. The business areas of strategic importance would not be included in this list.

The business sector in UAE is envisaged to flourish and scale new heights with this amendment in place. The country is foreseeing a large influx of entrepreneurs for company formation in Dubai, Abu Dhabi, and other emirates. We can only wait and see how this policy change benefits UAE. 

Why Kiltons Business setup services for Mainland company setup in Dubai?

Kiltons Business Setup Services has been the leading agency in UAE for more than two decades. Established in 1999, we have been pivotal in transforming dreams into realities. Our cordial relations with the ruling royal family and the top echelons of authority, experienced professional team and comprehensive services would aid you in setting up the company and attaining exceptional growth.

For Onshore / Mainland company formation in Dubai in 100% ownership, contact Kiltons now.  

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