New UAE Laws Mean a Big Boost for BusinessKWS Admin
You may have heard about some new laws being introduced in the UAE at the moment with respect to the “100% business ownership” and the “10-year Visa Rule”. As always, KWS Middle East aims to get this important information to you as quickly and as clearly as possible so that you can understand what impact it will be having on your current business or for your new business setup in Dubai.
To this end we have summarized important details of these laws that should help you understand the basics behind these upcoming changes. Please read on.
So what’s changing?
1. Now you can own your business completely in UAE without a local sponsor!
The landmark law that will change the investment landscape of UAE will allow 100% foreign ownership of companies in UAE.
Currently, companies who want to setup a UAE Mainland Company are required to have a local Emirati partner who must own 51% of the business and companies setup in UAE free zones can only be 100% foreign-owned – but not anymore.
Why the law is introduced?
- It will be a major incentive to attract foreign direct investment (FDI). UAE attracted $11 billion FDI in 2017 and economists expect an annual increase of up to 15-20% in FDI flow once the law comes into effect.
- It will help in raising the UAE’s global profile as a preferred investment destination, positively impact the local business environment and ultimately enhance UAE’s economic competitiveness.
- Confidence in the UAE’s economy will be boosted and but will also attract more tourists to the country.
- The change will help start-ups and entrepreneurs set up businesses in UAE by cutting costs.
So, what does it mean for foreign entrepreneurs in UAE?
Firstly, the move would remove the need for foreign entrepreneurs to work with local sponsors which means no third party will hold large stake in your business and you can get straight down to business without an Emirati individual or company to act as partner.
The rule is however, applicable to some strategic sectors only. More details on what these sectors are going to be will be revealed soon as the law will be applicable by the end of 2018.
2. Dubai SME’s business incubator license offers 100% ownership!
If you are an entrepreneur with a novel concept, you can get Dubai SME’s business incubator license with 100% ownership. However, proposals will be scrutinized by the authorities to ensure that it is practical and executable.
According to Dubai SME, the agency of the Department of Economic Development in Dubai, entrepreneurs can apply for incubator license online and each application will go through a feasibility check by a special committee.
According to Abdul Baset Al Janahi, CEO, Dubai SME,
“Dubai aims to reinforce SME contribution to GDP from 40% in 2017 to 45% by 2021. The initiative would attract local and foreign investment in SMEs and international expertise in business incubation and enhance business competitiveness.”
3. Guess what? The UAE has changed their visa rules!
UAE cabinet announced its decision to grant long-term visas for up to 10 years for investors, scientists, doctors, engineers, entrepreneurs and innovators. The message that UAE wants to convey with this move is clear: that UAE is open for business and keen to attract foreign investors, entrepreneurs and the next generation of talent.
What will be the impact of initiative?
Dynamics of real-estate market will change: Long term visas will provide stability and confidence so entrepreneurs will look upon UAE in long term proposition, strengthening the real estate market. We will see the focus of business owners shifting towards buying offices in the UAE, as well as other commercial premises instead of renting, as they consider a longer term future as a result of this law.
UAE will attract even more talent from around the world: Having 10-year visa stamp on passports, whether the visa holders are scientists, technological innovators or entrepreneurs, will encourage them to look towards building a long-term career in the UAE, and think about having their contribution valued.
UAE can become a hub of science: The new visas could offer a greater sense of security to scientists, allowing them to develop long-term careers in the UAE, rather than staying for a short period and then taking their expertise elsewhere.
It’s good to know that the UAE government is constantly pushing to make it as easy as possible for entrepreneurs to start and grow an enterprise. Now is a great time for you to take advantage and create and innovate in Dubai.
If you are looking to start a business in Dubai, you should work with a company formation specialist to ensure they tap into the best support available when working with the Dubai DED. KWS Middle East business setup consultants have complete know how of business rules and regulations and they will guide you the best during your business setup in UAE.