Owning 100% of a company in the UAE is possible and increasingly common, thanks to recent regulatory changes. Previously, foreign investors needed a local partner to hold a 51% stake, but now, full foreign ownership is allowed in many sectors, enhancing the UAE’s attractiveness as a business hub.
What Are the New Regulations for Company Ownership in the UAE?
The UAE government has made significant strides in reforming its business ownership laws to attract foreign investment. As of June 2021, the UAE allows full foreign ownership of onshore companies in most sectors. This change eliminates the previous requirement for a local Emirati partner, who had to hold at least 51% of the company shares.
Which Sectors Allow 100% Foreign Ownership?
Foreign investors can now fully own businesses in a wide range of sectors, including:
- Technology
- Manufacturing
- Construction
- Retail and wholesale trade
- Hospitality and food services
However, certain strategic sectors such as oil and gas, transportation, and some professional services may still require local partnership or have specific restrictions.
How to Establish a 100% Foreign-Owned Company in the UAE?
Setting up a fully foreign-owned company in the UAE involves several steps. Here’s a simplified guide:
- Choose a Business Activity: Determine the nature of your business and ensure it falls under the sectors that allow 100% foreign ownership.
- Select a Legal Structure: Decide on the type of company structure, such as a Limited Liability Company (LLC) or a branch of a foreign company.
- Register the Company Name: Choose a unique company name and get it approved by the Department of Economic Development (DED).
- Apply for a Business License: Submit the necessary documents and apply for the appropriate business license.
- Lease Office Space: Secure a physical office space as required by UAE law.
- Open a Corporate Bank Account: Establish a bank account to handle your business transactions.
What Are the Benefits of 100% Foreign Ownership?
Owning 100% of a company in the UAE offers several advantages:
- Full Control: You have complete control over business decisions without needing local partner approval.
- Profit Retention: You can retain all profits without sharing them with a local partner.
- Ease of Operations: Simplified business operations and reduced administrative complexities.
What Are the Costs Involved in Setting Up a Business in the UAE?
The cost of setting up a business in the UAE can vary depending on the type of business and location. Here’s a basic comparison:
| Feature | Dubai Mainland | Abu Dhabi Mainland | Free Zone |
|---|---|---|---|
| License Fees | $5,000 – $15,000 | $4,000 – $12,000 | $3,000 – $10,000 |
| Office Rent | $10,000 – $20,000 | $8,000 – $18,000 | $5,000 – $15,000 |
| Visa Costs | $1,000 – $2,000 | $1,000 – $2,000 | $800 – $1,500 |
Note that these are approximate figures and can vary based on specific business needs and additional services required.
People Also Ask
Can expatriates own a business in the UAE?
Yes, expatriates can own a business in the UAE. The recent changes in business laws allow expatriates to fully own companies in most sectors, making it easier for them to invest and operate businesses in the UAE.
What is a free zone company in the UAE?
A free zone company is a business entity established in a designated area that offers tax incentives and customs duty benefits. Free zones in the UAE allow 100% foreign ownership, making them an attractive option for international investors.
How long does it take to set up a company in the UAE?
Setting up a company in the UAE can take anywhere from a few days to several weeks, depending on the business type and the completeness of your documentation. Mainland companies may take longer due to additional regulatory requirements.
Are there any restrictions on foreign ownership in the UAE?
While many sectors now allow 100% foreign ownership, some strategic sectors like oil and gas, transportation, and defense may still have restrictions or require a local partner. It’s important to consult with a legal expert to understand specific sector regulations.
What are the tax implications for foreign-owned companies in the UAE?
The UAE offers a favorable tax environment with no personal income tax and a low corporate tax rate for most businesses. However, companies should be aware of VAT and other applicable taxes depending on their business activities.
Conclusion
The ability to own 100% of a company in the UAE marks a significant shift in the country’s business landscape, offering foreign investors unprecedented opportunities. By understanding the regulations, costs, and benefits, entrepreneurs can effectively establish and grow their businesses in this dynamic market. For further insights on starting a business in the UAE, consider exploring topics like "UAE Free Zone vs. Mainland" or "Navigating UAE Business Laws."
