In the UAE, it is a standard procedure for foreign business people to acquire a local sponsor when they wish to start a company. Therefore, fifty-one percent or a majority of the shares in a company had to be owned by a resident of UAE or an Emirati citizen, even if the person has no input in company decisions or lacks any claim to company profits.
If a person does not want to give the majority of the company's stake away, they have to open their business in a free trade zone. To do this, they need to acquire a sponsor-free license such as the free-zone license, which will allow them to operate their company in any of UAE's free zones.
Business establishments require a valid trade license to operate in the free trade zone. However, none of them require sponsors, and foreigners can retain 100 percent ownership of their company. Some of the primary ones are as follows.
Effective from December 1st, 2020, for certain sectors in the UAE, foreign investors are allowed to have 100 percent ownership of their company in the UAE mainland. This legislation is part of the federal law issued by the President His Highness Sheikh Khalifa Bin Zayed Al Nahyan.
Here is a brief description of each jurisdiction.
The above does not apply to all sectors in the UAE; therefore, some sponsors will still be required. If a company operates in these sectors, it can apply for sponsor-free licenses and move operations to a free zone. Operating in the mainland also means certain taxes will need to be paid; thus, the financial benefits of the free zone will not be applicable.
There is a procedure that needs to be carried out to acquire the license. The necessary paperwork needs to be filled and submitted to the government so they can issue the license. If you need help, we at Xcellence can compile the documents and handle the application process for you. With our attention to detail and thorough knowledge of the process, you can receive the license quickly without any hassle.