100 Percent Ownership for Foreign investors in UAE
Incorporating your company on UAE mainland is comparatively easy and profitable. But, one drawback that shouldn’t go unnoticed is the lack of complete ownership. A foreign investor can own a maximum of 49% shares and at least 51 percent of the shares should be owned by the local sponsor. Yes, it might sound quite depressing, especially if you have already made up your mind in opening a company on mainland. But hold on, the UAE government understands the consequences of such a clause, that it can pull back investors from establishing their company here. Taking into consideration the same, the government has planned to give complete ownership to foreign nationals. That means you no longer will have to rely on local sponsors to begin your own company.
Certain sectors are restricted from 100 percent foreign ownership and hence are categorized under a ‘negative list’. The 14 industries that come under the negative list are:
- Oil exploration and production
- Investigation, security, military (including manufacturing of military weapons, explosives, dress, and equipment)
- Banking and financing activities
- Pilgrimage and Umrah services
- Certain recruitment activities
- Water and electricity provision
- Fishing and related services
- Post, telecommunication and other audio-visual services
- Road and air transport
- Printing and publishing
- Commercial agency
- Medical retail (including pharmacies)
- Blood banks, quarantines and venom/poison banks
Even though sectors that come under the positive list have not been published, manufacturing and service industries are expected to make it to the list. The UAE cabinet has the authority to add or remove sectors on the negative as well as positive lists, at a later date. The new move will encourage more investors to establish their enterprise in UAE, which will result in a significant positive effect on foreign direct investments. With the amendment, mainland companies will enjoy the same status or perhaps more than that of free zone companies.
UAE Announces Guidelines for determining Tax Residency
The Cabinet Resolution No. (85) of 2022 on determining tax residence was recently announced by the Federal Tax Authority of the UAE, which will be put into operation on March 1, 2023.
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