Business Setup with 100% Ownership

23Nov, 23

Business Setup with 100% Ownership

Dubai, the jewel of the Middle East, is an ocean of business opportunities for entrepreneurs and investors worldwide. With its strategic location, world-class infrastructure, and investor-friendly policies, it has become a magnet for businesses of all sizes. Suppose you are an entrepreneur delaying starting a business in Dubai or the UAE due to ownership restrictions. Then, there is no longer a need to be concerned because the UAE has published an amendment that grants the new investors 100% control of the company. This is a significant change for foreign nationals registering companies in Dubai. Foreign nationals are no longer required to rely on UAE citizens for signature or company representation. Read the full article to learn the advantages and motivations for the shift. In this blog, we will explore the process of setting up a business in Dubai with 100% ownership and the options available, such as business setup in Dubai mainland, business setup in the Dubai free zone, and offshore company formation in Dubai.

Recent Changes in Business Ownership

The Federal Decree-Law No. (26), published in 2020, indicated that onshore enterprises in Dubai would have complete ownership. Due to a recent change, investors' shares are no longer restricted to a maximum of 49%.

The business is now entirely owned by the foreign investors. The authority explains the process to the companies who wish to gain full ownership by issuing the guidelines. Federal Law No. (2) of 2015 is changed in some ways by these new rules. The UAE government's choice will increase investment and offer Dubai a competitive edge. Dubai will develop into the perfect place for foreign investors to make investments. According to the rules of the Dubai Economy, more than 1000 commercial and industrial operations are eligible for 100% ownership.

The UAE's 100% Company Ownership Rule: What You Need to Know

Some crucial Things to Know About the UAE's 100% Company Ownership Rule are as follows:

  • The law will encourage the expansion of Dubai's business zones. Eco-friendly endeavours like hybrid power plants, solar electricity, and other green technologies will grow with foreign talent and investment aid.    

  • The high demand in the Middle Eastern market will draw new foreign investors from all over the world who are attracted by the potential for growth in the region.

  • Additionally, this measure will increase competition in the world.

  • The economy of the United Arab Emirates will gain from having 100% foreign ownership and increased foreign investment. The UAE government's decision would improve the country's standing in the global investment environment, where it is legal for non-citizen foreigners to run factories under their complete authority. In the UAE, acquiring 100% foreign ownership is a big deal.

  • As an expatriate business owner, you don't need to locate an Emirati partner to join your company; as a result, you can fully own the business when you establish it in Dubai.

  • No longer is it necessary to haggle and negotiate with UAE partners to secure the 51% stake in the company's capital.

  • You would have greater control over managing and organizing your career if you opened a business in Dubai.

  • Outside of the UAE's free zone territories, your business will have more freedom to expand.

  • Furthermore, the previous 49%-ownership law will not stop you from starting a firm in Dubai or another UAE emirate, as you wish.

  • After receiving the long-term investor visa, you can benefit from an extended stay in your choice emirate.

Business Setup in Dubai Mainland

Setting up a business in Dubai mainland is an attractive option for those looking to establish a presence in the city's heart. This allows for trading with the local market and accessing a broader customer base. 

Key features of business setup in Dubai mainland include:

100% Ownership: 

Dubai allows full foreign ownership of companies in selected sectors, encouraging investment and entrepreneurship. You can fully own your business without the need for a local partner in selected sectors.

Legal Structure Options: 

You can choose from various legal structures like sole proprietorship, Limited Liability Company (LLC), or branch office. LLC is a popular choice among expatriate business owners.

Regulatory Compliance: 

Dubai's Department of Economic Development (DED) oversees mainland business setup. You'll need to adhere to their regulations and licensing procedures.

Access to Local Market: 

Operating in the mainland provides access to the UAE's broader market, including government contracts and services.

How Does 100% Ownership Affect Mainland Businesses?

According to the new rule, Non-Emirates can own a business as long as the industry permits. If you desire 100% legal ownership, you should also look at the shareholding arrangements if you already own a business in the UAE. 

Foreign nationals may purchase shares from the current Limited Liability Company (LLC), which will then hold 100% of the business.

Freezones in the UAE already permit 100% foreign ownership. Due to Dubai's various tax perks and free zones, you should decide to launch your business there.

Business Setup in Dubai Free Zone

Dubai boasts numerous free zones designed for specific industries, such as technology, media, finance, and logistics. Free zones offer several advantages, making them a popular choice for many investors:

100% Ownership: 

Free zones in Dubai allow full ownership of your business, providing independence and control.

Tax Benefits: 

Free zone companies often enjoy tax exemptions for a specific period. This helps reduce operational costs and increase profitability.

Customs Privileges: 

Businesses in free zones can import goods without customs duties and export with minimal restrictions, simplifying international trade.

Quick Setup: 

Setting up a business in a Dubai-free zone is known for its speed and efficiency. Minimal bureaucratic red tape expedites the process.

Industry-Specific Zones:

Depending on your business's nature, you can choose from free zones tailored to specific industries, like Dubai Internet City or Dubai Media City.

Offshore Company Formation in Dubai

For investors looking for an option with even greater ease of doing business, an offshore company in Dubai might be the answer:

100% Ownership: 

Offshore companies allow complete foreign ownership and require minimal documentation for setup.

Tax Efficiency: 

Offshore entities enjoy zero taxation on corporate profits, personal income, and capital gains.

Asset Protection: 

Dubai offshore companies provide a secure environment for holding assets, especially for international wealth management and estate planning.

Ease of Management: 

Dubai's offshore companies have minimal reporting and audit requirements, making them a hassle-free choice for many.

International Trade: 

Offshore companies are ideal for international trade, investments, and holding company structures.

Benefits of Dubai's 100% Company Ownership Rule

According to the 2021 amendment, CCL has transformed the UAE into an investment-friendly jurisdiction. Among its additional advantages are: 

  • The 100% global ownership will draw in new investors and raise the likelihood that they will establish your business in the Dubai jurisdiction.

  • Because of eco-friendly practices like hybrid power plants, solar panels, and other eco-technologies, overseas investment and talent will increase in the Emirate's economic sector.

  • With the establishment of the new company, talent and investment will increase, enhancing the nation's ability to compete internationally.

  • Previously, a joint stock corporation could only sell 30% of its shares during an IPO. 

  • If the directors and general managers are implicated in any behaviour that results in financial loss, the shareholders may file a lawsuit against the company.

  • Since the Emirate is no longer in charge of the company meetings, anyone, including foreign investors, can attend them.

  • An annual general meeting now has the option of electronic voting.

Why are the Ownership Laws being updated?

The economy is more open to foreign investors if the old ownership laws are repealed. The hope to capitalize on the market with top talent from around the world is created by the 100% ownership. The following justifications led to the new ownership law changes:

  • The business process should be simplified.

  • Establish favourable legal conditions for business in the UAE.

  • Boost potential commercial and investment prospects.

  • Making the economy strong enough to handle the global economic upheavals.

  • Increase the corporate environment's competitiveness in light of the economy's shifting dynamics.

  • Addressing the changing business community's needs in the UAE.

  • Encourage enterprises, entrepreneurs, and foreign investors to invest significantly in the nation.

  • Give foreign investors unlimited, unrestricted operational and legal control over their companies.

  • Find entrepreneurs from around the world and provide them with a hub for all the companies set up to have 100% ownership.

Conclusion

Dubai offers myriad options for business setup, each tailored to meet specific needs and objectives. Whether you choose a business setup in Dubai mainland, a free zone, or an offshore company, you can benefit from 100% ownership, favourable tax conditions, and a strategic location. Researching and consulting with experts is crucial to determining the best setup for your unique business venture in this dynamic and ever-evolving market. Setting up a business in Dubai is an exciting opportunity for entrepreneurs to tap into a vibrant economy and a gateway to global markets. By leveraging the right setup option, you can achieve your business goals and thrive in the city of endless possibilities.

If you're considering a business setup in Dubai, contact our expert consultants to guide you and  start to your entrepreneurial journey in Dubai.