Effects of 100% foreign ownership: Growth of business investments in UAE

Effects of 100% foreign ownership Growth of business investments in UAE

Effects of 100% foreign ownership: Growth of business investments in UAE

Authorities in the UAE have long term goals that they strive towards using short term and continuous regulatory actions. They continuously work towards making investor friendly policies and follow a direction to improve the business environment in the UAE. It is for this reason that the government has allowed 100% foreign ownership of businesses being setup in the free zones of the UAE for certain industrial sectors.

This will help increase the confidence that foreign investors have in profitability of their businesses in the UAE. This will also increase their ownership of businesses by 49% which is almost half of what they had invested. The new policy has been appreciated all around the world as an influx of foreign investment is expected in the UAE as soon as the implementation starts. Those who had concerns with having a local agent to share 51% of the business now have an incentive to operate their businesses in the different free zones in the UAE. Apart from the ownership, the investors will also have the permission to stay in the UAE on a residence visa with longer validity periods.

Advantages of 100% foreign ownership of business

As the law was passed, commentators had their say about its effects and how helpful it can be. The previous law stated that a for a business to be owned by a foreign investor, 51% shares of that business had to be owned by a UAE national, in this case, called a local agent.

Let’s look at some of the advantages of new law.

a. Investor confidence

It is highly important that investors and entrepreneurs feel safe about their business setup Dubai. They must feel that the return they get is worth the money that they invest. It is not easy to share 51% of business ownership with a local agent in the UAE who has had no share in developing the business. However, the new law has been able to provide the investors with the security they needed, even though the laws and their implementation in the UAE never allowed an investor to be wronged when it comes to his or her business.

b. Increased FDI

Foreign Direct Investment is one of the best ways that a country can earn revenue and also earn foreign exchange. When foreign investment enters the country, not only does it provide more business setup Dubai opportunities but also creates employment and contributes to the already well developed business environment and infrastructure in the UAE.

c. Increased government revenue

The government is able to earn on foreign direct investment when it produces export products and adds value to the products and materials. The government can earn VAT as well as from other export related licenses and fees. The more export products are made and the more foreign direct investment increases, the better it is for the country.

d. Improved standards of living

More products and more choices mean better standards of living. As foreign direct investment and business increases in the UAE, more product choices will be available to the residents and the people and that means that the standard of living will further improve.

e. Healthy market competition

When a number of firms enter the market and competition gets tougher, the market works to provide the customers with better products and reasonable prices as firms compete to earn higher market share. This healthy competition improves customer welfare and product quality.

How can foreign investors take advantage of the new law?

Foreign investors need only contact Business Setup Dubai to take advantage of the new laws. These business consultants Dubai will be guided by experts regarding business registration processes and will be provided with services like product and trademark registrations and pro services. Experts at Business Setup Dubai are always updated with the latest news from the market and the laws being implemented and this can help you in your business processes.

You can reach out to business consultants Dubai today to learn more about your potential UAE business. Give us a call or drop us an email. Our experts will get back to you.


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