To incorporate your company in the UAE mainland is easy and profitable. The drawback is not to get unnoticed with the lack of complete ownership. People who want to establish a business in the UAE mainland are aware of laws that prohibit full-foreign ownership. The expat can’t set up a business in the UAE mainland without a local sponsor. As of now, it seems that things have changed.

The UAE government has planned to give complete ownership to foreign nationals. You can no longer rely on local sponsors to begin your own company.

The background

The Foreign Direct Investment Law, Decree-Law No.19 of 2018, got issued and published in Q4 2018, relaxes the tight restrictions on foreign ownership. This grants 100% ownership of mainland UAE companies of specific sectors. The list of activities are open to allow 100% foreign ownership called the Positive List. On the contrary, negative lists have activities that would not open to foreign ownership.

The Positive List Inclusion

Positive list has activities that include requirements and shares capital requirements for each sector under categories like industrial, agriculture and service sector. There are 122 activities approved under each industry to become eligible for 100% Foreign Investor Ownership, the initiative opening opportunities for Foreign Investors to enter the UAE Mainland market.

List of Activities has:

• The administrative and support services.
• Agriculture.
• Art and entertainment.
• The Construction.
• The educational activities.
• Healthcare.
• The Hospitality and food services.
• Information and communication.
• The Manufacturing.
• The Professional, scientific and technical activities.
• Renewable energy.
• Space transport and storage.

The requirements and criteria for 100% ownership

Few conditions are met to get advantage of full-foreign ownership

Requirements of share capital

Based on business activity and industry, share capital requirements vary between 2 and 100 million AED. Industries related to hospital activities need a share capital of 100 million AED. Industries like manufacturing and share capital requirements change depending on the type of manufacturing activity. For instance, the manufacture of sports equipment needs 3 million share capital, and the manufacture of machinery equipment needs 100 million AED share capital.

The conditions

Few conditions must be satisfied by the foreign investor that varies upon the activity. The below-mentioned terms are to be met:

• The use of new technology.
• The recognition of a high added value.
• Contributing to Research and development.
• Meeting the needs of UAE Licensing entities.
• The 100% foreign ownership in mainland identification of a high added value.
• Contributing to Research and Development.
• Meeting the needs of the UAE licensing entities.

The application for Full-Foreign Ownership includes:

Inclusion of FDI projects in the Positive List

Procedure for applying the complete ownership is by selecting the business activity in positive list and legal form (Private Joint Stock Company or Limited Liability Company). The FDI capital must not be less than minimum requirements.

• Submission of FDI license application for approval.
• Reservation of business name.
• Get approvals of entities related to FDI company activity.
• Get permission and receive FDI license after paying fees.
• The opening of a bank account on behalf of the company.
• The registration of License with the Ministry of Economy.

The FDI license applications of sectors have a maximum period of five working days to get approved.

Existing company changes to an FDI company

The transformation of an existing company to an FDI company with a mainland UAE LLC or private joint-stock company.

Project License not in the Positive List

Apply for the project license even if it is not under the positive list, for instance, sectors like real estate activities, retail, F&B and hotels. The foreign investor must submit their application to the Competent Authority of FDI. When sent to the FDI committee for consideration, the recommendation will be forwarded to the UAE Cabinet.

The application procedure is transparent in Dubai with the FDI handling applications in tandem with the Ministry of Economic and the Department of Economic Development.

To set up a full foreign ownership business at Dubai Mainland, or to have an existing company in UAE mainland, apply for the 100% ownership. We at blackswan would assist you with the eligibility of the process and steps as needed.

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