Setting Up Your Business UAE Makes Good Sense
Thinking about expanding your business into the Middle East? That’s a good call, especially if you want to take advantage of the booming economy and business-friendly environment presented by the United Arab Emirates. The UAE offers many advantages, including cutting-edge technology, a robust infrastructure, and a strategic Middle Eastern location. In addition, the UAE has gone to great lengths to make foreign business ownership in the UAE extremely attractive for foreign business investors and entrepreneurs.
In fact, the UAE recently made a new announcement extending its policy for 100% foreign company ownership. Concerned about a local sponsorship requirement? You won’t have to worry about that with a business setup in a UAE Free Zone. Read on to learn all the details, presented by your friends at MSZ Consultancy!
How Does 100% Foreign Ownership Work in the UAE?
Freezone Company UAE ownership has been a great business investment opportunity for years. The best free zones in the world are located here, and the UAE has one of the most attractive business climates you’ll find anywhere. Even so, foreign investors had several hurdles to jump prior to 2018. Up to that point, a local partner or sponsor was required to found a business. Any profits your business earned were required to be split with the local partner, and foreign investors weren’t eligible to retain 100% of business earnings. The local partner was guaranteed 51% ownership, along with majority control over the company.
But all that has changed thanks to the original vision of UAE President Sheikh Khalifa bin Zayed Al Nahyan. Foreign investors can now own and operate a company in the UAE without any local partner or sponsorship. Let’s look closer at what that means.
Why the UAE Implemented a 100% Foreign Ownership Policy
The UAE leadership understood they were already in an attractive position to attract foreign investors. But they also saw the need to remove existing roadblocks to foreign company ownership, in order to fully capitalize on the opportunities and really open up the UAE economy to foreign business startups and investment. Here are a few key goals the UAE government hopes to achieve with this 100% foreign ownership policy:
• Further, strengthen the UAE’s strategic position as a world-class business hub.
• Remove barriers of local partner requirements to improve the ease of doing business, including business setup in UAE Free Zones.
• Accelerate UAE business growth in a post-Covid economy.
• Address the continually evolving needs of the UAE business community.
• Prepare for future economic challenges by attracting more foreign investment in UAE business opportunities.
Who Is Eligible for 100% Foreign Business Ownership in the UAE?
That is a great question, and the answer is almost everyone in any type of business!
According to the Abu Dhabi Department of Economic Development (ADDED), more than 3,000 commercial and industrial activities have been registered for foreign companies and entrepreneurs, including trade, professional services, business services, tourism, arts & crafts, technology, agriculture, advertising, hospitality, and more. If you want to see the full list of available business activities that allow for 100% foreign ownership, just head over to the ADBC website at https://www.adbc.gov.ae.
The Dubai Economy and Tourism (DET) department has also released a rather lengthy list of business activities which allow for full foreign business ownership. In addition to many of the activities listed above for Abu Dhabi, in Dubai you can also pursue business ventures as varied as general trading, contracting, fine jewelry, and more. You can learn more at https://ded.ae/, but here’s just a sample list:
• Mining and Quarries
• Hospitality, Lodging, and Food Services
• General Trading
• Personal Services and Social Services
• Transportation and Storage
• Real Estate and Rentals
• Financial Services
Steps for Starting a Business in the UAE as a Foreigner
The UAE government offers several incentives for business owners to set up their own foreign-owned companies. They’ve also worked hard to simplify and streamline the business formation process. One of the first things you’ll need to do is apply for a visa that allows for multiple country entries. This is handled through the Immigration Department, where you’ll need to present a valid passport, completed visa application, business plan, bank statement, and other details as required.
The business formation process itself involves these key steps:
Decide on a Business Entity
Choose the type of business activity you want to pursue; this will determine which type of business license you need.
Choose a Business Name
The company name must reflect the nature of the business, be unique from other registered businesses, and not include any forbidden terms.
Find a Local Partner, If Needed
If you want to set up shop in the mainland, you’ll likely still need to find a local sponsor. However, you’ll be able to skip this step altogether if you plan on setting up your company in a Free Zone.
Get Initial Approval
Send in your application and supporting documents to gain initial approval.
Draft Your Memorandum of Association
The Memorandum of Association (MOA) is a document that governs the external activities of the company. The MOA is required to be locally notarized, as well.
After submitting all your documents and gaining approval, you’ll receive a payment voucher. You must pay for your license within 30 days of receiving the payment voucher.
Register Your Business
Finally, you’ll be able to officially register your business with the Chamber of Commerce and Industry.
***Note that other steps may also be required, depending on the nature of your intended business activity.
MSZ Consultancy Is Here to Help
Got more questions about needed documentation, or something else related to 100% foreign business ownership? MSZ Consultancy has answers, and can steer you in the right direction. And if you’re already making plans for a foreign-owned company set up in the UAE, MSZ Consultancy is the only name you need to know! We’re headquartered right here in Dubai, and we know all the ins and outs of what it takes to get a business up and running successfully in each of the seven Emirates.
Ready to get the conversation going, and get started? Get in touch today, and let’s schedule your FREE consultation! You can call us directly at +971 52 544 1248, or you can also get the ball rolling by simply emailing us at email@example.com. There’s no need to wait any longer, our business setup pros are standing by to help!