The law which brought the tremendous transformation in the business ecosystem of Dubai, 100% Ownership on Business setup in Dubai Mainland, got implemented on 1st June 2021.
It’s the game changer for the economic environment, as this law invites the foreign investors across the globe, to setup a company onshore in Dubai Mainland, in which company can be the run by non-national investors and allowing them to be 100% shareholders of the company.
This Law abolishes the requirement of the local partner of UAE, hence creating an impact on UAE venture capital ecosystem by increasing the number of foreign investors flow in the UAE. But there are some terms and conditions under it.
“Legislations that have been issued or those that will be enacted soon seek to increase the country’s competitiveness for both local and international investors, and advance business performance. These legislations are not the outcome of a crisis, but follow a clear vision of the country’s economic future envisioned collaboratively by federal, local, and private sector stakeholders,” Al Saleh said.
Firstly, the implementation of this law brings in the ease of setting up a business on onshore Dubai Mainland, by eliminating the law of UAE national holding 51% of Shares of the company. This law might bring some complexity and complications stringed along during initiating transactions, where nominee is required to appear at notarial appointments or sign investment documentation.
Secondly, onset of this law will gradually increase the funds of the startups in Dubai Mainland. Before the implementation of this law, the non-nationals held only 49% of share, but now they can benefit from all the investments and increase more revenue in the company, without any local partner (national) involvement. By clearing the hurdle of local partner will give the comfort to foreign investors to invest more in Dubai Mainland which will give them edge over the Free zones.
Thirdly, the most thing you should know is, 100% ownership law does not qualify all the types of business in UAE. As to get the benefit from this initiative, minimum share capital is required, and for certain businesses the share capital has to be more than $4 million.
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