On 1 June 2021, the 100% company ownership by expats on the mainland was triggered in the UAE. How is this being translated on the ground?
Capital Club Dubai hosted a fireside chat moderated by Deepak Ahuja, Chief Revenue Officer, Sehteq, with Carl Dowling. Partner, CBD Corporate Services, who shared key insights.
- The federal law allowing for 100% foreign ownership on the mainland is now active on the ground and entrepreneurs have started re-structuring their businesses to full ownership.
- The government offices and respective departments including the local Notary Public have the procedures in place and have already started processing exiting of UAE local shareholders (where applicable) effectively transferring 51% of onshore business ownership to expats.
- Following the Federal announcement, each Emirate has flexibility on the list of activities allowed for full foreign ownership. Further activities can be added or removed at any time, determined by respective authorities in each Emirate.
- You can now have an onshore LLC and foreign branch.
- The licensing department has started issuing 100% ownership licenses for many categories of activities. At the same time they have also reclassified some activities which previously were being registered as an LLC, but now can only be sole proprietorship, civil company, or foreign branch.
- Depending on the activity of your business, you might need to set up several tiers of corporate structures to avail both 100% foreign ownership and limited liability.
- No minimal capitalisation is required.
- No Emiratisation requirements changed in line with the amended law.
- Removal of the National service agent if you are a branch of a foreign company.
- Will continue to need National service agent if you are registered as a local registered business.
- If you need to work throughout the UAE, then you might need a hybrid model dependant on the activities allowed by each Emirate.
- In the absence of the local sponsor, the general manager will be expected to take on more responsibilities including the government interface work.