Can You Own 100% Of A Company In Dubai?

Dubai is a thriving economic hub that attracts entrepreneurs from all over the world due to its favorable business environment, strategic location, and tax benefits. The city offers several options for setting up a company, including sole proprietorship, limited liability company (LLC), and free zone company. One of the common queries that arise among entrepreneurs looking to establish a business in Dubai is whether they can own 100% of the company

The short answer is no. According to the UAE Commercial Companies Law, a foreign investor can only own up to 49% of a company operating outside of a free zone in Dubai. The remaining 51% of the shares must be owned by a local sponsor or partner who is a UAE national. The local partner must hold a majority stake in the company, thereby having the ultimate decision-making authority.

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However, this law doesn't mean that foreign investors can't have full control over their businesses. Entrepreneurs can choose to set up their company in one of the many free zones in Dubai, which offer 100% foreign ownership. Free zones are specially designated areas that have a unique legal and tax framework that allows companies to operate with complete autonomy.

Free zones are popular among entrepreneurs who want to retain full control of their company, have access to world-class infrastructure, and benefit from tax exemptions. There are over 20 free zones in Dubai, each catering to a specific industry or sector, such as Dubai Multi Commodities Centre (DMCC), Dubai Silicon Oasis (DSO), and Dubai International Financial Centre (DIFC).

The process of setting up a company in a free zone is relatively straightforward and involves registering the business with the relevant free zone authority, obtaining a license, and acquiring office space. Free zones offer several business structures such as Free Zone Limited Liability Company (FZ-LLC), Free Zone Company (FZCo), and Branch Office. The structure of the business will depend on the individual needs and requirements of the entrepreneur.

One of the key benefits of setting up a company in a free zone is that entrepreneurs are not required to have a local sponsor or partner. This means that foreign investors can have 100% ownership of the company, without having to relinquish any control. Free zones also offer tax exemptions on corporate and personal income tax, import and export duties, and other taxes. This can result in significant cost savings for entrepreneurs, especially those operating in high-revenue sectors such as manufacturing, logistics, and technology.

Another advantage of setting up a company in a free zone is the ease of doing business. Free zones have a streamlined and efficient process for company formation, with dedicated business support services to assist entrepreneurs throughout the entire process. Companies registered in free zones are also exempt from many of the bureaucratic hurdles that are commonly associated with setting up a business in Dubai.

Despite the many benefits of setting up a company in a free zone, entrepreneurs should carefully consider their options before making a decision. Free zones typically have specific regulations and restrictions on business activities, which may not be suitable for all industries. For example, some free zones may not allow companies to conduct business outside of the free zone, while others may require a minimum capital investment.

Entrepreneurs should also be aware that setting up a company in a free zone can be more expensive than setting up a company outside of a free zone. Free zones charge annual license fees, visa fees, and other charges that can add up to a significant amount over time. Companies may also be required to pay for office space, utilities, and other expenses associated with running a business.

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Conclusion

In conclusion, the UAE Commercial Companies Law restricts foreign investors from owning 100% of a company operating outside of a free zone in Dubai. However, entrepreneurs can choose to set up their business in one of the many free zones, which offer complete autonomy and 100% foreign ownership.

Setting up a company in a free zone can provide several advantages, such as tax exemptions, streamlined business formation, and access to world-class infrastructure. However, entrepreneurs should carefully consider their options and weigh the pros and cons of setting up their business in a free zone before making a decision.

Ultimately, the choice of business structure will depend on individual needs and requirements, and the entrepreneur's long-term goals and vision for their business.