Effective starting June 1, UAE’s amended Commercial Companies Law allowing 100 percent foreign ownership of companies is expected to significantly boost business confidence in the country as it moves ahead with its post-coronavirus economic recovery, industry experts agreed.
“The announcement by the Ministry of Economy declaring the long awaited 100 percent foreign ownership rules will be enacted June 1, 2021 is a massive boost to the FDI currently flowing into the UAE. With the previous sticking point of having 51 percent local ownership removed for mainland companies, the UAE is primed to benefit from a burst of inbound investors taking advantage of these changes,” said Scott Cairns, managing director of Creation Business Consultants.
Scott Cairns, managing director of Creation Business Consultants
“We will see a massive increase in business confidence as the UAE solidifies its status as a leading investment and operations destination for the region,” he continued.
The amendment will also boost demand for commercial space in Dubai, which in Q1 2021 had fallen to the lowest level recorded since Q3 2012, and Abu Dhabi, also experiencing subdued demand, as per Knight Frank’s Office Market Updates for Q1 2021.
“The federal and local governments across the UAE continue to unveil key policy initiatives that will be crucial in helping to create future demand for residential and commercial property across the country. Confirmation of the 100 percent company foreign ownership law that comes into effect on June 1 will undoubtedly have a significant impact in the medium to long term for demand for office space in key markets such as Dubai and Abu Dhabi that are still experiencing quieter conditions in the aftermath of the global pandemic,” said Faisal Durrani, Head of Middle East Research at Knight Frank.
“With this landmark change, the UAE has unlocked its potential to emerge as a key global contender business headquarters, which were previously confined to free-zones across the country,” he added.
The law amendments are the latest in a series of initiative aimed at liberalising business activity in the UAE – such as the Digital Nomad visa or the 10 year residency for entrepreneurs, scientists, engineers etc. – the most recent being Dubai Next a digital platform announced on Wednesday that allows ambitious youth and innovators to secure the required funding to launch their projects.
“At the smaller end of the business spectrum, fresh initiatives such as ‘Dubai Next’ will certainly help to position cities such as Dubai as an attractive option for global start-ups looking for a dynamic launch location,” said Durrani.
Faisal Durrani, Head of Middle East Research at Knight Frank
“These announcements are the perfect complement to the raft of residency options that have been made available over the course of the last 12-months, aimed at attracting and retaining talent, as well as boosting business confidence and economic activity as the country sets its sights on the post-Covid recovery,” he continued.
While Cairns believes the amendment is “extremely positive news”, he said that “we are yet to see the finalised list of activities that will reap the benefits of this announcement. I’m sure there are many businesses watching this space very closely and preparing to act.”
Follow us on
