Indeed, launching the 100% foreign ownership law marked a significant shift in UAE’s business landscape, offering fresh opportunities for entrepreneurs and investors alike.
Before this law’s enactment, foreign investors encountered significant restrictions on business ownership. Previously, they had to enlist at least one local partner or sponsor, resulting in a 51/49 ownership structure where the local partner held the majority stake (51%). This means foreign investors retain only up to 49% ownership of their businesses, impeding their ability to retain 100% of their earnings and posing challenges for autonomy over their investments.
Now, Emirati nationals no longer must hold a majority stake in mainland companies, ushering in a new era of flexibility and autonomy for foreign business owners. So, companies may not opt to enlist a UAE national or local company as their registered agent.
More importantly, this law allows UAE mainland companies with Limited Liability Companies (LLCs) structure to have sole owners or multiple shareholders, thereby enhancing operational flexibility.
However, despite welcoming foreign investors, commercial companies in the UAE still face some restrictions. Here’s what you should be aware of:
Limited to offshore operations: Foreign investors are required to establish their businesses either in a free zone or offshore. Operating outside these areas could restrict their market access and competitiveness against mainland businesses.
Confined to free zones: The UAE designates specific areas as “free zones” for foreign business setups. These zones operate under different regulations that may favor foreign investors. However, businesses in free zones are restricted from selling or providing services to local customers.
Local service agent requirement: Foreign investors must appoint a local service agent for their business registration in the UAE. This agent acts as a liaison between the company and the government, handling visa applications and other administrative tasks.
Benefits of 100% Foreign Ownership
The UAE’s recent 100% foreign ownership policy has broadened opportunities for investors, entrepreneurs, and business owners. Here are its key advantages:
Partnering with NH Management
NH Management is a premier business setup advisory firm poised to assist entrepreneurs in navigating the UAE’s business landscape. Experienced in guiding hundreds of foreign entrepreneurs, NH Management offers comprehensive support throughout the business setup process, from acquiring trade licenses to securing visas and office spaces.
Partnering with NH Management ensures entrepreneurs access to many post-setup services, consolidating their position as a one-stop solution provider for business needs.
The UAE’s 100% foreign ownership law heralds a new era of entrepreneurial empowerment and investment opportunities. By embracing these legislative changes and partnering with trusted advisory firms like NH Management, entrepreneurs can navigate the setup process with confidence and seize the countless benefits that await in the vibrant UAE business landscape.
Everything You Need to Know in Opening a Company in the UAE