Under changes to UAE company law, foreigners opening a company in UAE no longer need an Emirati shareholder or agent. The amendments permit foreign investors and entrepreneurs to fully establish and own companies without nationality requirements. This is done in view of a broader, long-term effort to attract tech startups and foreign investors into the Gulf state.
Does this imply a new era for UAE startups? What do foreign companies have to say about this new rule? Erik Bjerlestam, CEO of bFound, and Andrew Thomas, Managing Director of Nexa Digital, were eager to share their views on how the long-anticipated ruling would transform their business lives.
One a Swede and the other a Brit, both are eyeing “more competition”. According to Erik, this is a big deal in the long term. This is a definite boost to the economy’s competitive edge and will make the country more expat-friendly. The new rule will make it easier and more cost-effective for an ex-pat to establish a business. This is because until this new change in law, only if an expat-owned business operating in a free zone, it could be 100% foreign-owned; but in order to trade beyond the free zone, it needed a license with a local sponsor. Andrew opines that the key is that the ruling is at a federal level.
Unlike now, there was more of a mishmash approach across several free zones in the UAE. He considers this to be a positive move. With everything becoming global due to COVID, this is another opportunity to openly do free trade. The two agency leaders are looking forward to an increase in competition as more companies will launch new businesses or relocate in the UAE. Erik says, “The competition is good and healthy…will attract new resources and a large pool of qualified, enthusiastic talent into the region.”
Ziad Daoud, chief emerging markets economist, Bloomberg, is positive about the new regulations as he says, “Diversifying Gulf economies away from oil requires attracting foreign investments along with fixing the fractured labor market.” It is clear that the foreign ownership move is a momentous change for the UAE. I am sure this will further cement UAE’s prestige for its pro-business culture and favorable infrastructure for foreign investment.
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