The United Arab Emirates has a reputation for being one of the world’s most friendly business environments. Low taxes, a wonderful location, and friendly regulation make it a favorite among entrepreneurs and investors all over the world.
The UAE’s government has taken initiatives in recent years to solidify this reputation and promote more international investment in the country. These modifications have made it much easier for non-GCC entrepreneurs and business owners to start and maintain long-term businesses in the UAE.
The UAE golden visa process was introduced and then expanded as the initial initiative. This enables a broader spectrum of professionals to take advantage of the scheme, which allows them to stay in the country for much longer than previously possible.
Around the same time, the UAE government changed its business law, allowing foreign ownership of mainland enterprises in certain industries to be 100 percent. This easing of the regulation allows non-GCC investors to deal in the UAE without the need for a local agent in about 100 permitted areas. This regulation, along with a few others, has now been further eased.
Here’s how the latest changes could make starting a business in the UAE considerably easier.
Previously, non-GCC investors could only start a firm on the UAE mainland with the support of a local sponsor.
The local sponsor would control 51 percent of the company, while the non-national would hold the remaining 49 percent. The foreign investor would retain control over decision-making and profits, while the local sponsor would be compensated on an annual basis.
In several industries, such as agriculture, construction, hospitality, and manufacturing, this was recently loosened to allow for 100 percent foreign ownership.
Except for industries of national importance to the UAE economy, such as oil and gas, 100 percent foreign ownership is now permissible under the new legislation in practically all industries.
The UAE’s joint-stock company rules have also undergone some important revisions. Senior management is now covered by the directors’ liability rules, and such companies are no longer required to have a UAE national on their board of directors.
Shareholders of joint-stock firms can sue corporations if the directors fail to perform their duties, resulting in loss or damage. Other changes will allow these businesses to appoint non-shareholders as directors and sell up to 70% of their stock in an Initial Public Offering (IPO), up from the existing 30%.
Finally, a single corporate shareholder can now own a joint-stock company.
Anyone intending to start a branch of a foreign company on the UAE mainland formerly needed to hire a local agent. The agent’s name would appear on the license, and they would be paid a fee for their services once more.
This isn’t the case anymore. Without the need for a local agent, foreign companies can now create branches on the UAE mainland.
The official timeline for all revisions to UAE business law hasn’t been released yet. Many of the adjustments will take effect on January 2, 2021, with others to follow later.
For example, the elimination of the necessity for a local agent for overseas subsidiaries and the relaxation of 100 percent ownership rules will take effect six months after publication in the official gazette.
The most recent modifications to UAE business law correlate with the liberalization of various other rules governing minor financial offenses, non-marital cohabitation, and alcohol consumption. The goal is to make the UAE an even more attractive investment destination for people from other parts of the world.
The UAE’s new rules have set it apart from the rest of the Middle East. Not only as a fantastic area to do business, but also as a fantastic place to live, raise a family, and integrate for the long haul. Only a more profitable and diverse business climate, thriving industries, and a stronger, more stable economy can be expected as a result.
UAE company law amendments have made it easier to start a variety of enterprises in the UAE. However, a basic understanding of the process is still required to get started. Furthermore, it’s worth noting that the application process is only simple if your license application is full and error-free at the time of submission.
When forming a new business in the UAE, it’s a good idea to deal with a company formation specialist like Alya Auditors to guarantee that this is the case.
We are a group of company registration experts who are dedicated to realizing the ambitions of aspiring entrepreneurs and small businesses.
In addition to managing your license application, we can also help you open corporate bank accounts and recommend the best financial institution for your unique needs.
We also provide visa and immigration services and can assist with any government formalities, approvals, work permits, and visa applications required to conduct business in the UAE.
In other words, our professionals can form your company on your behalf, file your license and visa applications, and handle all of the paperwork, leaving you free to focus on what you do best: running your business.
Get in contact with the skilled team at Alya Auditors immediately to learn more about the new changes to laws or to begin your trade license application.