How to Setup a 100% Ownership Mainland Company in UAE
If you have had plans of carrying out a business setup in Dubai or any other Emirate, you would know that one of the main factors that determines the success of your business is the location. Businesspersons looking for business setup in Dubai are generally perplexed over one predicament: “Must I carry out a business setup in Dubai Mainland or Free Zone?”
The difference between these two entities is stark: the former comes with lesser restrictions but with a high business starting and operating fee while the latter’s selling point is that you can own 100% of your company’s shares.
Before we walk you through the procedure of setting up your 100% owned company, let us adumbrate to you what the law was for a new business setup in Dubai and other Emirates.
The Past Law
Erstwhile, expatriates who were looking to actualize a new business setup in Dubai or in the other Emirate were inhibited in owning 100% of their company. I.e., a foreign businessperson could own a maximum of 49% of their company while the rest 51% would be owned by a UAE national, commonly known as Emirati Sponsor or just partner. The selected partner would not play any role in the functioning of the business but would charge from the company owner a stipulated yearly fee. This introduced high business setup costs and made it hard for expats to find a local sponsor to trust their money with.
However, the Foreign Direct Investment Law has shattered those very restrictions by amending the Commercial Companies Law No. 2 of 2015. The revised laws — a total of 51 articles — emphasize on the regulations of establishing Limited Liability Companies.
The Current Law
The new law provisions expatriates in conducting a business setup in Dubai Mainland or any other Mainland in the UAE without the need of a local sponsor. What this means is that foreigners and immigrants will now be able to get a 100% hold of their company’s assets. These revised laws have swept over 13 sectors and affected a total of 122 economic business activities.
Howbeit, a little caveat in this amendment is that some companies that have been excluded by the cabinet in decision-making sessions and those entities that are completely owned by federal and local governments are completely immune to these revised laws.
| Sector | Economic Activities | Investment | FDI Requirements |
| Agriculture | Growing of leguminous crops, grapes, non-perennial crops, beverage crops, seed processing, drug and pharmaceutical crops, animal production, silviculture and other forestry activities, etc. | 7.5 – 10 Million Dhs. |
|
| Manufacturing | Manufacture of food products, beverages, apparel, wood products, plastics, pesticides, detergents, welding products, metallic products, machinery equipment, hovercrafts, engines, missiles, etc. | 2 – 100 Million Dhs. |
|
| Services | >Assorted | Payments in accordance with the enforced legislation | Highly varied |
Source: Cabinet Resolution 16 Concerning the Determination of the Positive List.
Benefits you can Procure
The amendment aims at revamping the foreign ownership rules that are liable on the mainland companies in UAE. The introduction of this amendment also structuralizes the foreign investment landscape in UAE. Not only does it improve the circumstances under which business activities can be conducted, but it also helps businesspersons looking to conduct business setup in Dubai in the future by making the business landscape more fertile.
The advantages here are two-fold: the first is that this expunges the daunting factor of handing over a majority of your company’s shares to a third-party, which was the number one deterrent for budding entrepreneurs. The second example is conspicuous: businesspersons from overseas can circumvent the process of scouring for a local partner, and can directly get started in their new business setup in Dubai or any other Emirate.
However, the biggest benefit is enjoying the benefits that mainland business setup offers. Free zone companies are inhibited when it comes to the office size, the trade boundaries and staff numbers — a new business setup in Dubai mainland is completely free of these restrictions, enabling the rapid economic growth throughout the Emirates.
Where you must start
While the elimination of these restrictions bodes well for prospective entrepreneurs, a business setup in Dubai or any other Emirates is still a monumental and tedious process. Without professional help, one wouldn’t be able to start their own business as seamlessly and efficiently as they would with help from business setup experts such as Cross Link International.
If you have your business plan adumbrated and are ready to carry out a business setup in Dubai or any other Emirate, start with us. We offer the cheapest packages and are the most reliable business setup consultants in all of UAE. Contact us at +971 4 321 6631 / +971 55 744 6445 or fill up this form for a callback.
