100% Business Ownership
UAE expatriates could soon be able to own 100 percent of businesses outside the country’s free zones, as part of a radical shake-up of foreign investment rules. The emirate’s officials have been promoting more liberal rules on business ownership to the federal government, in a bid to counter the negative impact of the economic slowdown.
All seven emirates are now considering the proposals – weighing up the costs and benefits – in a statement given by Deputy Director General at Dubai’s Department of Economic Development (DED). The federal government will be the body to announce the new rules and regulations, however no specific timeframe on implementation of this rule has been given.
The change would not only attract substantial new foreign direct investment in the UAE but would also help generate jobs. Last year foreigners set up 342 projects in Dubai, up 59 percent from 2007. Foreign direct investment soared by 123 percent to $21bn in the emirate, according to a study released last month by the Financial Times FDI Intelligence.
At present overseas firms, working outside the free zones, must set up a branch, or form a company with a local sponsor, who must own a 51 percent stake in the firm. This has discouraged investment in many parts of Dubai, and has resulted in long, arduous lines for the free-zone areas. The new law, if implemented, will make business ventures more lucrative and therefore more attractive. Instead of waiting years for a Media City license, for example, a prospective company may now initiate business anywhere in Dubai, bringing with it all the benefits of new economic activity.
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