59A7D41EB44EABC4F2C2B68D88211BF4 U.A.E Visa Rules and Procedures-Law updates -free legal advice: January 2019

Wednesday, January 16, 2019

UAE law allowing 100% foreign ownership of companies

UAE President Sheikh Khalifa bin Zayed Al Nahyan has issued a decree to establish a new foreign direct investment unit at the Ministry of Economy.

The plans aim to boost the UAE’s attractiveness for investment, create jobs and diversify the economy.A law allowing 100 per cent foreign ownership of companies in the UAE is now in force after being published in the country’s Official Gazette.

Under the details, published by state news agency WAM, the FDI unit will be responsible for proposing new policies and “determining its priorities, plans and programmes associated with them”.

It will also establish a database of investment data and existing FDI projects and help create an attractive environment for investment by facilitating registration and licensing of projects.

“The foreign direct investment projects existing before the entry into force of the provisions of this Decree-Law shall retain all the privileges prescribed for them in accordance with the legislation, agreements and contracts derived therefrom within the period specified in such legislation and agreements, according to the statement.

Foreign companies seeking to establish an entity onshore in the UAE would previously have to team up with a UAE national, who was required to own 51 per cent of the shares of the company.

Among the key details is a framework allowing the UAE Cabinet to exercise its powers to permit increased levels of foreign ownership, it said.

Clarification regarding the steps required of companies to apply to own more than 49 per cent of shares in selected sectors of the economy were also revealed.

Sectors restricted from 100 per cent foreign ownership appear on a ‘negative list’.
 They include:

  •     Oil exploration and production
  •     The investigation, security, military (including manufacturing of military weapons, explosives, dress, and equipment)
  •     Banking and financing activities
  •     Insurance
  •     Pilgrimage and Umrah services
  •     Certain recruitment activities
  •     Water and electricity provision
  •     Fishing and related services
  •     Post, telecommunication and other audiovisual services
  •     Road and air transport
  •     Printing and publishing
  •     Commercial agency
  •     Medical retail (including pharmacies)
  •     Blood banks, quarantines and venom/poison banks

A separate ‘positive list’ covers sectors open to greater foreign investment. However, the new law allows the cabinet to add or remove sectors on each list at a later date. Details of sectors on the positive list are not mentioned in the new law but are expected to include the manufacturing and service industries.

Wednesday, January 9, 2019

Dubai Scraps Bank guarantee requirement for Tourism firms


Companies in the tourism industry will soon be able to get back the bank guarantees they had earlier set aside when they started doing their business in Dubai.

Entrepreneurs who are planning to start a business will also no longer need to raise a huge amount as a guarantee before securing a trade license in the emirate.

Dubai’s Department of Tourism and Commerce Marketing (Dubai Tourism) confirmed on Tuesday that it has initiated efforts to release Dh250 million in bank guarantees that have been furnished by tourism-related service providers, following a decision to scrap the requirement to start a travel and tour business in the emirate.

The move will not only lower the cost of doing business, but it will also boost the liquidity of local businesses and enable them to reinvest some money into the economy. It will benefit over 2,000 travel and tour agencies operating in Dubai.

Previously, tourism companies including inbound and outbound tour operators were required to put up a bank guarantee ranging from Dh100,000 to Dh600,000, depending on the type of business activity, to Dubai Tourism, as a precondition for the Department of Economic Development (DED) to grant a trade license.


“Cancellation of this provision enables Dubai Tourism to refund the bank guarantees to the companies providing much-needed funds to reinvest in their business and grow their services,” the government agency said in a statement.

“Similarly, going forward for all new ventures, investors and entrepreneurs will also no longer need to provide such bank guarantees to Dubai Tourism either to open a tourism establishment or to offer specific travel or tour-related services and activities in Dubai.”
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