100% Expat Ownership in Dubai Mainland license

Dubai Mainland:

Dubai Mainland is the most preferred jurisdiction in UAE for entrepreneurs all over the world. Some of the reasons are better infrastructure facilities, ease of doing business, safety & security etc. Department of Economic development (DED) is the license issuing authority in Dubai Mainland.

100% expat Ownership:

Dubai Government along with Dubai economic department has from time to time amended policies, which encourages investment for entrepreneurs. Dubai Economic department has approved expats to form Dubai Mainland Company with 100% ownership for commercial and industrial activities (LLC companies). This policy has been brought into effect from 1st June 2021 (for activities approved by DED). Now expat investors need not search for Emirati Partners to start a company.

The decision by UAE government to allow 100% ownership to foreign investors is a huge step and this will surely encourage many new entrepreneurs to invest in Dubai mainland. One of the main reasons why foreign investors were interested in opening Free Zone Company was that it secured 100% ownership. Now that DED (Department of Economic development) has allowed, this will pay way for more investment in Dubai Mainland.

Dubai Mainland VS Free zone:

• Free Zone was preferred earlier by investors and one of the reasons was full ownership to foreign investors. Now that DED Dubai has allowed foreigners to secure 100% ownership in LLC activities in mainland, there are all the more reasons why expats would prefer mainland over free zone in coming times.
• When a business is operating inside UAE (suppliers and clients confined inside UAE- 100% business inside UAE mostly service based business). When it comes to trading business (Any form of trading), as per free zone rules the company has to appoint a distributor as agent (a mainland company) to supply their goods in mainland. Whereas a mainland company has broader advantages in terms of operating inside mainland and Free zone, there are no such limitations in signing agreement with companies in any jurisdiction. Now with the new rules of 100% ownership for LLC companies in mainland, investors have the option to open a mainland company which will be more advantageous for them to operate their business.
• Now investors will mainly opt free zone mainly for service/ professional license activities.
• One of the main criteria to obtain Government/ Quasi government contracts are that company should be located in Mainland. Generally government deters from handing contracts to companies located in free zone. Now with this new rule of 100% ownership, investors will be encouraged to invest in mainland thereby they can obtain government related contracts which was the case before.

Process for forming company for 100% expat ownership:

All the process, documentation remains same for company formation except there is no requirement for Emirati partner’s requirement for liberalized commercial activities. For activities which require approval from external authorities ( Dubai Municipality, Civil defence, Knowledge and Human development Authority (KHDA, etc.,) they need to obtain approvals from respective authorities in order to obtain licenses. Therefore the process to obtain 100% ownership is same as before, only difference is Emirati partner details are not required.

Information Technology Services in UAE can be classified as per below types:

Amendment to existing license for 100% expat ownership:

As for the existing LLC licenses with Emirati partners, the situation remains same without any change according to the Memorandum of Agreement (MOA) and also the percentage of the local partner can be changed from 51% or he can be removed, provided all the shareholders agree for the same.

Role of Instaco:

INSTACO will support in the entire process starting from the selection of activity, license issuance, external approvals, investor visa until Emirates ID issuance of investor along with all kinds of PRO services. In future if any amendment is required we will assist by providing our PRO services. Our expert team of trained professionals is well-experienced to deal with all the Government departments for document clearing and obtaining approvals.

For more information contact Mr. Ashok Poojari +97150-1298609, email id ashok.poojari@instaco.ae