Dubai is known worldwide as a paradise for investors. Thanks to the new economic and government reforms, it has become even more attractive to set up a company in the Emirates.
If you decide to establish your business in the mainland, you will need to contact the Department of Economic Development, more commonly known as DED.
Your commercial license in Dubai will therefore be issued by DED.
There are 3 different types of licenses:
-
Industrial license for manufacturing and selling finished products using raw materials;
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Commercial license for trading all legally tradable goods without territorial restrictions;
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Professional license for individuals or groups engaged in consulting services, engineering services, accounting services, administrative services, training, education, etc.
In accordance with Federal Decree-Law No. (26) of 2020, which amended certain provisions of Federal Law No. (2) of 2015, the new amendments to the Commercial Companies Law (CCL) on June 1 stipulate that foreigners now have the option to open a mainland company and own 100% of it, subject to certain conditions. This means that they no longer need a local sponsor to register a company in Dubai mainland.
This law invites foreign investors from around the world to start a business in the United Arab Emirates.
First of all, you need to understand the rules and procedures established by DED for having a mainland company.
Here is what you need to know:
- There are 2 types of licenses to distinguish
- Professional license: with this type of license, it is necessary to have a local service agent. The difference between the local partner and the service agent is that the local service agent has no share in the company; they are considered a representative of your company before the authorities. Their signature is mandatory for government applications and dealings with other government entities. If you have a local service agent, rest assured that they will not interfere in your business and you will be the sole person managing your company
- Commercial license: with this type of license, an Emirati partner holding at least 51% of the capital was previously required to open a mainland company.
However,
since 06/01/2021, for certain categories of activities, it is no longer necessary to have a local partner to start a mainland company.
Start your company with 100% ownership through DED
What changed on June 1?
Good news for foreign investors: it is now possible to have 100% ownership of your mainland company. This law removes the requirement to have a local partner.
Previously, a foreigner (and their partners) could hold a maximum of 49% of the company, while the remaining 51% had to belong to a local/Emirati partner.
With the exception of a few activities considered professional, which were exempt from the requirement for a local sponsor.
In Dubai, a list of activities has been published covering more than 1000 economic activities out of the 2300 listed by DED. This list is called the
positive list. https://ded.ae/Full_Foreign_Ownership_Activities
As for activities known as professional services, 100% ownership of the company continues to benefit foreign investors.
Remember that the commercial activities you intend to carry out will determine the type of license you need to obtain. To own 100% of your mainland company, your activity must appear on the positive list. If it does not, you can still apply for external approval to obtain the legal permit for that activity.
Why did they introduce these changes?
We have listed a few reasons that explain these exceptional new measures taken by the government.
- attract investors to the country
- boost the country's economy
- make it easier to do business in the country
- prepare the future of the United Arab Emirates
- increase competitiveness for local and international investors
What are the advantages of 100% ownership in the Emirates:
- you can work freely throughout the territory without restrictions, as is the case with a free zone company. But that's not all: you can also trade internationally
- 100% ownership in the mainland means 100% control over your company
- no more dependence on a local partner for administrative procedures
- flexibility because you will deal directly with DED without having to go through an intermediary
- since you do not need a local partner, this represents a saving because you will not have to pay them
If we had to summarize these new measures in one sentence, we would say: thanks to these amendments, all non-Emiratis, regardless of their nationality, can fully own their company as long as it falls within the list of authorized activities.
Are you ready to take advantage of these amendments and start your company as the sole shareholder in mainland UAE?
If you are ready,
Merritt is your agent for setting up your company!
Merritt Middle East has been present in Dubai since 2009 and has helped thousands of investors establish their companies.
Determine your activity, choose the structure you want, and let us take care of the rest.
We provide
assistance and advice at every stage of setting up your company.
To make an appointment with our advisers, please call +971 52 820 0964or send an email to
support@merritt.group
