New Company Ownership and Residency Laws Coming into Force
The United Arab Emirates is changing the rules governing foreign company ownerships and expat residency in a bid to attract skilled workforce and investors.
In the attempt to lure global investments and skills into the country, the UAE government approved of the proposed changes to the existing laws, which will allow foreign citizens to own 100% stake in a UAE registered company, and also agreed to introduce changes to the current residency rules.
The changes will take place by the end of this year.
At present, foreign investors who want to establish businesses outside the designated free zones (such as Dubai International Financial Centre, for example) have to have a local partner by law, who should own at least 51% of the company.
This is going to change by the end of the year as the proposed amendments will allow foreigners to fully control a company set outside of the free zones.
The cabinet also approved amendments concerning the residency status of students, entrepreneurs and professionals working in select industries.
Specialists working in the fields of medicine, science, research and technical fields will be able to get visas of up to 10 years.
It’s a drastic change to the existing residency system, which is based on employment as current residency visas are tied to a person’s employment status.
The proposed changes mean that the visas will be for residency, as opposed to employment, said the UAE.
The system will operate more like the US green card – a permit which is typically renewed every 10 years that allows foreign workers to live and work in the country.
Foreign investors setting up companies could also secure visas of up to 10 years – great news for those who struggle with the existing short-term residency solutions available now.
“We expect a significant positive effect on foreign direct investments. The decision should also help net immigration, which should significantly alleviate the current pressure on housing markets.”
Jaap Meijer, managing director and head of equity research at investment bank Arqaam Capital Ltd. in Dubai