Recently, in June 2018 a new law was announced by the government of The United Arab Emirates where investors will be allowed to own 100% of their companies in some sectors of the economy. This limits the risk of disrupting the existing economic market. The UAE cabinet, chaired by Dubai ruler, Sheikh Mohammed Bin Rashid al-Maktoum claimed that “This law would permit 100% foreign ownership of some UAE-based business, up from the current 49% limit by the end of 2018.”
However, the question that remains unanswered is – is this new law affecting the locals? Presently, only a few details of the law have been revealed. The chief economic advisor of Dubai’s Department of Economic Development, Mr. Safadi claims that the law is applicable to the “strategic sectors” of Dubai’s economy.
He further explains that the new law will not hinder or damage the interests of UAE citizens who currently benefit from acting as a silent partner in a foreign-invested business. In fact, he believes that this new law will create more opportunities for the UAE citizens as “they have a lot to offer in terms of knowledge of local markets, the network, and the connectivity.”
The law is strategized in such a manner that it will not target or affect any silent partners as they generally deal with small-scale businesses. The government aims to target the impactful businesses that will leave a mark in Dubai’s economy and will further lead to an increase in job opportunities, technology scope, and boost the rates of import and export.
It has been reportedly claimed that free zones which already permit 100% ownership could be affected as this could remove one of their unique advantages. Business owners and foreign investors consider free zones to be unique business models which makes them individually attractive. .
The executive chairman of the Dubai Multi Commodities Centre, Ahmed Bin Sulayem focuses on free zones and believes that it is a diverse sector and it is going to be difficult to cope up with the law. He further notes “You are looking at a big market, representing over 15,000 businesses, and almost 100,000 people live and work there… People go there not just for the 100% ownership and the tax-free facilities that we provide; they go there to be connected to the market, to not miss out.”
With the implementation of this law, it can be said that all the citizens of UAE irrespective of being expats or locals are certainly going to benefit.
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