100% Ownership in Dubai Mainland

A Guide to 100% Ownership in Dubai Mainland with a Commercial License

The dynamics of business setup in Dubai has received a big boost with the government implementing the Federal Decree-Law No. (26) of 2020 that granted 100% foreign ownership for all the commercial activities on the mainland companies. Following this, the Department of Economic Development (DED), Dubai released a list of more than 1000 eligible activities for full foreign ownership. It’s a big change as foreign investors can now enjoy full ownership by obtaining a commercial license in Dubai Mainland.

Starting a mainland company with full ownership or changing existing ownership status is now possible with advice from the best business setup consultants in Dubai. Meanwhile, you can get to know through this article, more insights on full foreign ownership under a commercial license. Read ahead.

Commercial Activities with Full Ownership

In Dubai, the investors require a professional, industrial or commercial license to start a mainland company. Businesses that carry out buying and selling of goods and commodities or other trading activities are required to obtain a commercial license in Dubai. The license also covers both specialised trading and general trading activities.

Before the promulgation of the new law, only professional activities were granted 100% foreign ownership provided a UAE national is appointed as the Local Service Agent (LSA). From June 2021 onwards, activities under the commercial license are allowed to operate with 100% foreign ownership in Dubai mainland. Some of the commercial activities that are permitted for full foreign ownership include:

  1. General Trading
  2. Supermarket
  3. Mini Mart
  4. Vegetable and Fruits Trading
  5. Spices Trading
  6. Textile Trading
  7. Pharmacy
  8. Perfumes & Cosmetics Trading
  9. Cigarette Selling
  10. Jewellery Trading

The DED activities list is not limited to the activities mentioned here. Foreign investors need to check the DED list before applying for a commercial license in Dubai. Business set up consultants in Dubai can provide the investors with advice on choosing the right activity.

UAE National Partner No Longer Mandatory

As per the Federal Decree-Law No. (26) of 2020, the foreign investors need not appoint a UAE National Sponsor who holds 51% shares of the company. This means the foreign investors are relieved of the burden of negotiating or entering into arrangements or schemes with the local sponsors. Before the promulgation of the law, investors used arrangements such as Side Contracts to circumvent the restrictions on foreign ownership and to control their financial interests in the UAE LLC companies.

Abolition of National Service Agent

The new Law has abolished the previous requirement for appointing a UAE national service agent. The appointment of an LSA was a requirement for the foreign company’s branch or representative office to be incorporated in the UAE. However, unlike the Local Sponsorship, an LSA is not entitled to any shareholding in the company. LSAs only take care of administrative duties for a fixed remuneration. The branch of a foreign company is now entitled to 100% ownership without the requirement of appointing an LSA in Dubai mainland.

Existing Companies can Have Full Ownership

The companies that already operate in Dubai mainland with a Local Sponsor can attain 100% ownership. However, the status of such companies will remain unchanged. For instance, it is not possible to change the legal structure of a foreign company from an LLC to a Sole Proprietorship under a foreign name. The investors can transfer the license to a one-person company with limited liability. The investors can either reduce the percentage share of the UAE National Partner or request for his withdrawal from shareholding. Consult with the best business setup consultants in Dubai to clear the doubts regarding this process.

Any Change in the process of Business Setup in Dubai?

The amendments to the foreign ownership law don’t bring any change to the existing procedure of business setup in Dubai. The only change is that it’s no longer mandatory to have a UAE national partner or specify a fixed share quota ratio for him. The foreign investors are not required to pay any additional fees, guarantees or capital required for setting up a company in Dubai with 100% foreign ownership. The standard procedure will continue, which is:

  1. Determine company name
  2. Identify the legal structure
  3. Select business Activity
  4. Apply for a license, obtain initial approval from DED
  5. Rent commercial space, obtain a tenancy contract ( Ejaari)
  6. Obtain external approvals for special activities
  7. Get the License Issued
  8. Start the visa processing
  9. Open a bank account in Dubai

Jitendra Business Consultants can help you with 100% Ownership in the UAE

Since the foreign ownership law is fairly recent, the investors will have to navigate the troubles of coordinating with government departments. Also, the investors need to steer clear of doubts and uncertainties regarding the process of business setup in Dubai Mainland. This is where business setup consultants in Dubai such as Jitendra Business Consultants (JBC) come in handy for the entrepreneurs.

JBC is a pioneer in providing bespoke business setup services in Dubai and other emirates. JBC helps entrepreneurs to identify the most suitable corporate structure, trade license, business activities apart from assisting in drafting all required documents and obtain approvals from various government agencies for the issuance of visas and licenses. JBC takes care of all the steps and formalities so that foreign investors would not have to worry about the legal procedures.