By Suyeba Aslam
Your commercial awareness dose
Last Month, UAE investment and foreign ownership laws had been reformed by UAE’s President Sheikh Khalifa bin Zayed Al Nahyan. The new laws have stated and permitted for foreign nationals to be able to have complete ownership of commercial companies in the country without the sponsorship of a UAE national. This had been stated within the Foreign Direct Investment Law of 2018 (FDI) and Cabinet Resolution No. 16 of 2020.
Furthermore, a number of the new laws that have been decreed apply towards aspects such as limited liability and joint-stock companies. It is anticipated that the new changes of enforcement will be put into action within the next six months once they have officially been announced in the UAE’s official gazette.
For business and business partners out there in the UAE, there is hope that doing business in the country will now become much easier. The reason for this is because the need to pay annual fees or have the interference of an agent to hopes attaining UAE residency and employment visas will now be abolished. The new laws will allow foreign business owners to have their licenses which will be presented by the Department of Economic Development.
According to law firm Gowling WLG, the new investment and foreign ownership laws will provide a catalyst for: “M&A activity from foreign investors seeking to obtain control of UAE businesses, consolidation of current free-zone activities with on-shore activities, including streamlining office space and work-force in the UAE and further high value foreign direct investment in the UAE”. Allowing companies to be free-zone businesses means foreign business owners will be able to own 100 per cent of their company and will be exempt from corporate tax and customs duties.
In recent news, it is also been announced that there will be a new timeshare law within the city of Dubai to protect residents and tourists from fraudulent scams. The law had been established last Monday, imposing that Dubai Tourism must re-outline the structure for how selling, marketing, and management of properties operation within the ‘timeshare program’.
A timeshare program operates by a property that is usually used during the holidays being divided into multiple parts of ownership. The properties are usually a condo unit and several parties then hold rights to use the property, in which each owner of the property is assigned a certain time of the year to use the property.
Dubai Tourism has said they hope the new laws will enforce stricter terms and conditions and hopefully put an end to the regulatory environment of fraud in the timeshare industry. Fraud within the timeshare industry has become very frequent with targets usually being of the larger families who of which are manipulated to buy “unbelievable deals- including several nights stay at hotels, club memberships, and discounts in international and UAE-based holiday properties”- as mentioned in the Khaleej Times.
The New Decree clearly shows that UAE law is developing along with the times, in the hopes of being able to strengthen the economic position that the country currently holds as a universal financial centre. It shall also enable further growth as well as an increase in foreign direct investment. Although the new enforcement is yet to be put into action, the aftermath of the announcement is deemed to be very positive and empowering.
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