100% Ownership in the UAE [Explained]
Updated June 1, 2021
To what may be called a new dawn for the country’s business community, the implementation of the amendments made to the Commercial Companies Law (CCL) from 1 June 2021, now allows expats to have 100% ownership of business in UAE.
In this blog, we will explore in detail the new changes and what it means for entrepreneurs as well as the UAE economy.
What is new?
The revised laws highlight the regulation of provisions for establishing commercial companies with limited liability structures. A Limited Liability Company (LLC) can have a single owner or have multiple shareholders.
What has changed?
Earlier, expat businessowners were limited to owning a maximum of 49% of their companies. The remaining 51% would mandatorily belong to a UAE national also known as Emirati sponsor or partner.
Only a few activities in the professional services sectors and certain free zones allowed expats to have 100 percent ownership in UAE.
Now, however, the amendments exempt expat investors from the minimum percentage ownership of UAE nationals. Thus, allowing natural and legal persons to establish companies in the UAE mainland without the need for a local partner.
Who is eligible for 100% ownership of business in UAE?
In Dubai, the revised laws will be applicable to 1,061 out of the 2,300 total economic activities on the list released by the Department of Economic Development (DED). Therefore, about half the business activities across sectors, including trading and manufacturing, qualify for 100% ownership of business.
For professional services activities, however, 100% ownership of business continues to benefit the entrepreneurs. They, however, require a local service agent and strictly follow the sole establishment legal structure instead of an LLC.
Meanwhile, in Abu Dhabi, establishing majority of the trading activities still require investors to partner with an Emirati sponsor. Therefore, they have to follow the 51-49 shareholding provision.
The implementation of the 100% ownership of business varies from one Emirate to another. While the Dubai and Abu Dhabi have already introduced the updated regulations, other states are also expected to devise their own.
Why were laws revised to allow 100% ownership of business?
- Create a fertile legislative environment for the company establishments
- Facilitating 100% ownership of business in UAE will raise the readiness of the country’s economy
- Improve the ease of doing business
- Help prepare for the future by boosting investment and commercial opportunities
- Raise the competitiveness of the business environment in tune with the rapid economic changes as well as developments taking place in the global economy
- Respond to the evolving needs of the UAE business community
- Give a huge push to the country’s attractiveness to expat investors, businesses and even startups
One-stop solution for business needs
A pioneer in providing expert company formation services, Shuraa Business Setup has been helping local as well as international entrepreneurs and investors take their first steps since 2001. In the last two decades of its existence, Shuraa has sown seeds for more than 35,000 firms with its customised business solutions.
From helping entrepreneurs figure out the most suitable jurisdiction, trade license, and corporate structure based on the nature of their business, to obtaining all required documents and approvals from various government agencies for the issuance of visa and license, Shuraa takes care of all the steps and formalities so that businesses would not have to worry about the legal procedures.
Moreover, since the law is fairly recent, the integration between various governmental departments will take time. To avoid confusions and learn more about how Shuraa can help you navigate through the process of obtaining 100 percent ownership of business in the UAE, book a free consultation with Shuraa’s Legal Corporate Advisors.
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