29 09 2020

Basic requirements for companies with 100% foreign ownership

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The list of permitted types of activities covered by the law on foreign direct investment has been published by the Cabinet of Ministers of the United Arab Emirates. The activities are divided into 3 categories: services, industry and agriculture. Equity requirements and conditions are specified for each sector. To date, all the necessary instructions and the list have come into full force.

Within these sectors, 122 types of activities have been approved. Each activity from the list is available to foreign citizens who intend to carry out the designated activities, and, subject to the established requirements, can own a local company in the United Arab Emirates for 100%. This will undoubtedly have a positive effect on foreign investors, who now have a lot of new opportunities to implement commercial plans in the domestic market of the Arab Emirates.

The list includes the following activities:

- Agriculture;

- Healthcare;

- Support and administrative services;

- Entertainment and arts;

- Communication and information;

- Building;

- Catering services;

- Manufacturing;

- Services in the field of hotel business;

- Logistics and storage;

- Renewable energy;

- Activities related to science;

- Professional activity;

- Space.

Equity conditions.

The amount of share capital is directly dependent on the selected sector and type of activity. The minimum amount is 2 million dirhams, the maximum is 100 million dirhams.

For example, if you choose sectors that relate to medical activities, then the size of the share capital will be the maximum - 100 million dirhams. And if we are talking about the production of sports equipment, then the amount of capital will be 3 million dirhams.

Also, there is a list of necessary requirements for a foreign investor. The list may vary depending on the selected type of activity and sector.

Here is a small list of requirements that may be needed:

- With high added value, full recognition is required;

- Using modern technological solutions;

- Making your own contributions to various studies;

- Full compliance with the requirements of the licensing authorities of the Arab Emirates.

What are the most important advantages of a local foreign-owned company?

- A foreign investor can own a local company for 100%;

- Local companies with 100% foreign ownership have similar rights with companies owned by citizens of the United Arab Emirates;

- Simplicity and flexible approach in matters of changing partners, adjusting the organizational and legal form and transfer of ownership.