YET ANOTHER LEAP FORWARD FOR THE UAE: 100% FDI IN MAINLAND COMPANIES
August 02, 2021
Starting a business in UAE has never been easier. The UAE Ministry of Economy recently announced that effective 1st June 2021, foreign nationals will not require a local sponsor or an agent to start their business in the UAE.
Earlier, it had been mandatory for a local sponsor to own at least 51% of a business in Mainland UAE. This was a major constraint for foreign investors given the reliance it placed on local sponsors for government liaison, the high sponsorship costs, and legal uncertainty. That concern has now been laid to rest with this move to allow them full 100% ownership.
The Department of Economic Development (DED) in each emirate has specified the business activities that are open to 100% foreign ownership. The Abu Dhabi DED has approved over 1100 activities across a range of sectors. Similarly, Dubai Economy has approved more than 1000 business activities which include trading, manufacturing, and agricultural activities. This is ideal for foreign Investors looking to the UAE as a gateway for MENA markets.
The DED expands and updates the list of activities on an ongoing basis so that new business activities are constantly being made eligible for 100% foreign ownership. Furthermore, the UAE government’s continual economic liberalization is designed for businesses to flourish in the region.
In the last six months, several new businesses have been established in various categories. The top ten licensed business activities are as follows:
| SL No | No of Licenses issued | Business Activity |
| 1 | 4721 | Project Management Services |
| 2 | 2878 | Tinging and Painting Works |
| 3 | 2468 | A/C, Ventilations, Air Filtration Systems Installation and Maintenance |
| 4 | 2272 | Building Cleaning Services |
| 5 | 1965 | Electromechanical Equipment Installation & Maintenance |
| 6 | 1820 | General Trading |
| 7 | 1804 | Men’s Hairdressing, Trimming and Styling |
| 8 | 1200 | All Kind Building Projects Contracting |
| 9 | 1135 | Floor & Wall Tiling Works |
| 10 | 1109 | E-Commerce Through Social Media |
The surge of investors in real estate development evident in that table is good news as the real estate sector is a major economic growth driver. Similarly, eCommerce license growth reflects a future-forward direction. All this will further strengthen UAE’s reputation as an international investment destination.
At MBG Corporate Services, we have helped many global clients establish their business in the UAE with the full range of related services: business formation, government liaison, Finance, Audit & Tax, Legal, Risk Advisory, Mergers & Acquisitions, and Strategy, Transformation & Technology , among others. Our team of experts have more than two decades of Corporate Services experience supporting organizations establish businesses in the UAE, India, Singapore, and other markets.
So do reach out to us and we’ll help you achieve your vision of global business growth.