100% ownership in some sectors as of new law
The rumor has it there is new law passing out that will allow 100 percent foreign ownership of companies in the United Arab Emirates. But this applies to only some sectors of the economy. This limit is because it limits the risk that will affect the business that is already running in the United Arab Emirates. The locals do not have to worry about this because the government is keeping in mind that the foreign investors and this new law do not have any harsh effects on the local businesses.
The news was told by the Dubai investment official while they were talking to the Reuters an international news agency based in London. In May of 2018, Sheikh Mohammed bin Rashid the Dubai ruler said in the United Arab Emirates cabinet that by the end of 2018 United Arab Emirates would allow 100 percent ownership of some of the United Arab Emirates-based business, which currently is 49 percent. According to a source, i.e. chief economic advisor Raed Safadi, of the Dubai’s Department of Economic Development, said that this law of complete ownership would only apply to the planned areas of the economy and not all of them. Few of the details of law have been publicized to date.
Locals do not have to worry
The law affecting a few sectors and not the locals do not have to worry about this. Meaning those people who are partners, investors or get benefits from the foreign-invested business as silent partners will not face any damages or losses. The other side of the picture is that law like this will prove to be beneficial. It will be creating new opportunities for the locals of UNITED ARAB EMIRATES. Foreign owners and those who will be buying ownerships will also get inside knowledge. The locals and officials here have too much to offer. They know about the trends, market, networks and much more.
Fahd Al Gergawi, chief executive of the Dubai Investment Development Agency, said: “We are not targeting the sleeping partners’ businesses, because these are small businesses. We are targeting strategic, impactful businesses which will leave their fingerprints on the economy and create a meaningful impact on jobs, technology, and boost imports and exports.”
What are free zones
There are some special business areas in Dubai that are known as free zones. The reason why they are called free zones is that there you can have complete or as much ownership of business there. With the application of these new laws, these free zones could be in danger. The only thing because they were popular and in business was ownership. As 100 percent ownership will be now available for the new users and investors. Free zoned areas could lose all of their worth because it was the only thing they had and now it will be available all over.
But there is more to know about this, Safadi added that the free zones in Dubai have a special and exceptional business model on which they are so popular. This is the business model that made these zones attractive for the businesses. These zones are adjusting to the pressure that is put on by the new law presented i.e. 100% foreign ownership in UAE.
Why choose tax-free zones
In addition to this the Dubai Multi Commodities Centre’s executive chairman, Ahmed Bin Sulayem said that free zone’s business model and the location is diverse enough that it can handle that law and continue to run the business it was made for. The Dubai Multi Commodities Centre is a free zone focused on commodities trade. After this, he also told the news that this free zone is a big market that we are talking about. It represents more than 100,000 people and 15,000 business. These people live there and work in this market.
The reason why all these people and businesses are here is not just the facilities we provide like the tax-free area and 100 percent ownership. Instead, the real reason why they prefer the free zones is to get connected to the market and not miss any opportunity that they are presented with. Ever since the foreign investment towards Dubai has increased 26 percent within a year. To give you an idea before this, in the early day of 2018, it was $4.84 billion.
New visa opportunities for all
Along with the 100 percent ownership, the United Arab Emirates has now approved for the long term visa for all international investors and professionals, who they see would prove beneficial for the country. To stay in the country for a max of 10 years with this new visa you have to be a talented specialist, investor, innovator, medical researcher or professional, belonging to the scientific field, and last but not the least you have to be in some technical field. Otherwise, the new rules are not for you. Is this really an opportunity of just a new way of them getting the benefits from your work?
For the first time, a student visa will be allowed for the students who would be willing to live in the country for at least 10 years and study alongside if we are not wrong. Of course, there can always be exceptional cases. The visa could be extended after the government makes sure the residency system, even after the student has completed their studies.
Before this, there have been attempts to allow 100 percent ownership but they met the opposition from many official bodies one of which is consultative Federal National Council. The reason proposed was that it will have negative impacts on business in Emirates. What is the change now and will this new lay be successful, well we have to wait and see.