International services

In recent years, the UAE has implemented several reforms to allow 100% foreign ownership of businesses on the mainland, which traditionally required a local partner holding at least 51% of the shares. These changes aim to attract foreign investment and boost economic growth. Here’s a detailed overview of obtaining a mainland trade license with 100% foreign ownership in the UAE:

Steps to Obtain a Mainland Trade License with 100% Foreign Ownership

1. Select a Business Activity:
   • Choose the business activity or activities you plan to undertake. The UAE has a comprehensive list of permitted activities across various sectors.
2. Choose a Business Structure:
   • Decide on the legal form of your business (e.g., Limited Liability Company – LLC, Sole Establishment, Branch Office, etc.). For most activities, an LLC is the preferred structure.
3. Find a Suitable Location:
   • Choose a location for your business operations. This can be an office space, warehouse, or retail space, depending on your business activity. The location must comply with the UAE’s zoning regulations.
4. Trade Name Registration:
   • Select a trade name for your business and ensure it complies with the UAE’s naming conventions. Submit the trade name registration application to the Department of Economic Development (DED) in the respective emirate.
5. Initial Approval:
   • Obtain initial approval from the DED. This step confirms that the UAE government has no objection to you starting a business in the chosen activity.
6. Drafting the Memorandum of Association (MOA):
   • Prepare the MOA, which outlines the ownership structure and business operations. The MOA must be notarized by a public notary in the UAE.
7. Secure Office Space:
   • Lease or purchase the office space and obtain the tenancy contract. The tenancy contract must be registered with Ejari in Dubai or the relevant authority in other emirates.
8. Submit Documents:
   • Submit the following documents to the DED:
     • Initial approval receipt
     • Trade name reservation certificate
     • Notarized MOA
     • Office lease agreement and Ejari registration
     • Passport copies of the shareholders and managers
     • Additional documents as required by the DED
9. Obtain Approvals from Relevant Authorities:
   • Depending on the business activity, you may need additional approvals from other government departments or ministries.
10. Pay License Fees:
    • Pay the required fees for the trade license issuance. The fee amount varies based on the business activity and location.
11. Receive Trade License:
    • After processing, you will receive the trade license, allowing you to legally operate your business on the mainland.

Important Considerations

• Activity-Specific Approvals: Some business activities, especially those in sectors like healthcare, education, and finance, require specific approvals from relevant ministries or regulatory bodies.
• Office Space Requirements: The type of office space and its location must be appropriate for the business activity and comply with local regulations.
• Local Sponsorship: While 100% foreign ownership is allowed, some activities may still require a local service agent or a specific shareholding structure as per the local regulations.
• Regulatory Changes: Stay updated on regulatory changes, as the UAE periodically revises its laws and regulations to enhance the business environment.

Benefits of 100% Foreign Ownership

• Control: Full control over business operations and decision-making.
• Profit Retention: Ability to retain 100% of the profits generated by the business.
• Market Access: Direct access to the local market and opportunities to engage in government and private sector contracts.
• Simplified Processes: Streamlined procedures for company setup, licensing, and renewals.

Recent Reforms

• UAE Commercial Companies Law: The updated Commercial Companies Law now permits 100% foreign ownership in many sectors, eliminating the need for a UAE national sponsor for most business activities.
• Strategic Impact Sectors: Certain strategic sectors might still have restrictions, so it is essential to verify if your business activity qualifies for 100% ownership.

These reforms reflect the UAE’s commitment to creating a conducive environment for foreign investors, enhancing its position as a global business hub.