The UAE is the major regional hub and the commercial capital for the Middle East. It has one of the most liberal trade regimes in the Gulf.
The position of the UAE means it is the centre of traffic between Europe, Africa, and Asia. As a gateway between these regions, the UAE holds the potential for developing international relations, no matter what sector you specialize in.
Not only do the Free Trade Zones (FTZ) promote the trade of physical goods, the booming technology and digital spheres had a good foothold. Seen at the Silicon Valley of the Middle East, the incentive for research and development across all forms of technology is growing. This support has led to a location that rivals technology hubs in Asia and the United States.
The cost of creating and doing business has dropped dramatically. Cutting over 98% of the fee for things from licensing to trademarks has breathed fresh air into small and emerging businesses. Banking has also become more supportive for SMEs, providing aids while the government has rolled out updates to the National SME Programme; the National SME Programme now has a targeted phased system of support. Businesses that have been directly impacted by Covid-19 can avail interest-free loans, free advisory services, and subsidized working spaces.
Keeping the Covid-19 virus in check has meant little economic or hospitality impact. Tourism has remained popular with quarantine-free zones and business has continued strong into 2021. From 1 October 2021 – 31 March 2022 the World Exposition event will host countries and regions for six months while promoting Sustainability, Mobility, and Opportunity across sectors and disciplines.
Amidst all the crisis surrounding the Covid-19, the UAE also introduced a new amendment allowing 100% foreign investment. The Federal Decree Law no. 26/2020 has amended the Commercial Company law by getting rid of the requirement of having an Emirati as 51% owner for registration of an Onshore Company in the UAE. The amendment now allows 100% foreign investments in the UAE except in “Activities of Strategic Effect”. Activities of Strategic Effect denotes a definitive negative list where 100% ownership will not be allowed yet. The changes to these foreign investment laws have come into effect from 1st June 2021.
The UAE government had in the past, through Federal Law no.19 of 2018, made similar efforts by issuing a positive list including 122 sectors where ownership pf more than 49% was allowed for foreigners. The amendments of 2020 are a giant leap forward and has opened several other sectors which were not earlier included in the 122 sector list. The Departments of Economic and Developmeny in each of the Emirates are given the responsibility to come forward with a list of such business activities. Dubai, Ajman, and Abu Dhabi have drawn up a list 1,105, 1000, and 1100 commercial activities respectivelym where 100% foreign investment will now be allowed.
Foreign investors can now own and control Onshore Companies without the need to employ nominees. These changes have now removed the requirement of having majority directors of a joint stock company to be a UAE National.
Additionally, the need to have a UAE national service agent for branches of foreign companies have also been removed. These measures will not just reduce the cumbersome arrangements and additional costs which investors had to make earlier, they will also create an atmosphere of legal certainty.
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