Free economic zones of the UAE will continue to work successfully and develop, despite the adoption of new rules that will allow the establishment of companies with 100 percent foreign capital without a local partner throughout the country.
The changes were also made regarding the employment of expats, their official residence in the country, as well as the possibility of creating companies by foreign citizens without the participation of a local partner. Such a decision of the Cabinet of Ministers of the UAE may have a positive effect in the future, but at the same time raises a number of rather serious questions. So, the companies, officials and the entire working population of the UAE are waiting for more detailed information on innovations that will be ready by the end of 2018.
However, the role of UAE free zones, which are currently over 50, should remain.
For every company that develops in and out of free zones, the arrival of 5-10 companies from Europe, Asia or the US is expected, due to the fact that the favorable tax environment of the UAE is a much better choice than the previous favorites – Cyprus, Singapore and some others.
It should be noted that allowing foreign investors to own 100% of the company, which was announced recently, will be limited to specific sectors of the economy.
The UAE authorities are still deciding which sectors should be included in the law. Their decision will be based on such aspects as the willingness to create jobs and technologies, said Abdullah Al Saleh, Undersecretary of the Ministry of Economy for Foreign Trade and Industry.
He said that a committee would be created to make a decision, headed by the Minister of Economy. The committee will include representatives of seven UAE emirates. They will formulate and forward their recommendations to the Cabinet of Ministers. The group will also recommend industries and companies that can be added to the list.
Currently, foreigners can own 100% of companies established in free zones.
The law is aimed at “giving a strong impetus to investments in the UAE.” The goal is to attract quality investment and experience, regardless of their size.
These economic measures will help to strengthen the national economy.