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Business, Economy, GCC, UAE

UAE Welcomes Entrepreneurs with Policy Changes

Now you can hold 100% ownership in certain sectors in Mainland UAE.

Have you ever thought of starting a business in the UAE? If you have, there is good news for you, and if you haven’t, maybe it’s the right time to think of one.

UAE is a country that has a consistent business-friendly environment. Stable political and economic conditions of the country have been providing an enabling ecosystem for business. The fourth-largest economy in the Middle East has always proved to be a safe place for investments. The country is now set to attract more foreign investment flow by making its economy more inclusive of foreign investors. The recent amendment of Foreign Direct Investment policy is playing the catalyst for big changes in the economy. The decree issued by the President His Highness Shaikh Khalifa bin Zayed al Nayhan to amend the FDI law was something long anticipated by foreign investors.  The amendment in FDI that has come to effect from Dec 1, 2020, onwards allows full foreign ownership of onshore companies. Under the amended law, the business scene of foreign investors in the country is to take a big leap as the new law took into effect.

 UAE ranks 11th in the world in ease of doing business. A well-established infrastructure that provides an international outlook, hyper-connectivity, and a strong banking system make the UAE one of the best places to do business. What makes the country stand out among other business hubs are the liberal business policies. Recruiting procedures are simple and processing legal documents have no restrictions. Compared to other countries in the region, obtaining employment visas are easy. Getting an office space at an affordable price is not a cumbersome task. In short, red-tapism is not something that you can associate with this country!

Free Trade Zones are where business enjoys a lot of exemptions in the UAE. There are 45 Free Trade Zones across the country that have special tax, customs, and import regime. These areas are governed by their own regulations. They are completely exempted from import and export taxes and personal income tax. Corporate tax is also exempted for up to 50 years. Before the amendment of the FDI law, 100 % foreign ownership was allowed only in these areas.

The requirement of an Emirati sponsor with at least 51% of ownership (except in Free Trade Zones) has been the major challenge to start a business in the country. The difficulties encountered in finding and collaborating with a suitable local shareholder or agent will no longer impede the business plans of foreign investors. The new law also enables the shareholders to sue the company in civil court over

failure of duties. For entrepreneurs who were holding back in need of full ownership of their businesses, UAE is showing a green signal to rekindle their plans.

The new company law would have game-changing implications in the investment landscape of the country. Opportunities are plenty as the country is also keen on diversifying its economy in multiple sectors in trade, banking, logistics, tourism, and manufacturing. As UAE opens its economy to satisfy the appetite of foreign investors and entrepreneurs, the business dreams of foreign entrepreneurs is about to take wings.

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