100% Company Ownership

How to Get a 100% Company Ownership in Dubai DED and Its Cost

As a renowned business hub globally, Dubai has attracted the attention of many entrepreneurs and businessmen around the world. Before applying for a DED license in Dubai, entrepreneurs and businessmen should determine whether they would like to establish their business in the Dubai Mainland or Dubai Free Zone. Setting up a business in Mainland Dubai necessities applying for a license with DED Dubai. To own the business 100%, entrepreneurs need to acquire knowledge regarding the business policies in Dubai. The top considerations in DED Mainland Company Setup are:

  • Local Partner / Local Service Agent: Companies established in Dubai Mainland require cooperating with a Local Partner (holding at least 51% of shares) or a Local Service Agent (without any shareholding). The signature of a local partner or service agent is essential in government applications and liaising with the government authorities. Aside from this issue, the foreign investor can solely control business operations without any local partner or service agent (unless agreed otherwise).
  • Special Approvals for Specialized Licenses: Every Mainland company can conduct a variety of business activities. However, some business activities are regulated by respective government authorities and thus require prior approvals. Among these special approvals, some real estate licenses require approval from Real Estate Regulatory Authority (RERA) or educational licenses that require approval from the Knowledge and Human Development Authority (KHDA). Also, hospitals/clinics/medical-related licenses require Dubai Health Authority (DHA) approval. It is advised to check all the activities included in every business before practically conducting them.

 

 

Types of DED licenses

  • Industrial License is granted for manufacturing and selling the finished products using raw materials.
  • Commercial License is issued for trading all legally tradable goods without territorial restrictions.
  • Professional License is granted for individuals or groups active in consultancy services, engineering services, accounting services, administrative services, training, education, etc.

Conditions for starting a 100% foreign-owned DED Mainland Company 

Starting a 100% foreign-owned business in Dubai Mainland is possible through one of the following channels:

  • Setting up a Professional Services Company:
    • Foreigners can fully own a professional services company. Hence, the professional services company only requires cooperating with a Local Service Agent (either a UAE national) or a corporation (a UAE company with all its partners being UAE nationals).
    • The local service agent does not hold any shares in the company and only receives a fixed annual fee for facilitating local government services.
    • An option to cooperate directly with a local partner can be the expat opting to obtain a power of attorney from the local service agent to execute all government functions if required.
  • Setting up a Branch of an Overseas Company:
    • Owning an active company in the company owner’s home country, which allows them to open a branch company, could be the best solution to expand one’s business in the UAE while retaining 100% ownership.
    • Opening a branch company does not require a local national as a shareholder. Hence, a Local Service Agent can be opted, just like a professional services company. It is noteworthy that the branch must engage in the same line of business as the parent company.
    • If the parent company can engage in multiple activities, then the branch company can undertake either all or a few of those activities in the UAE.
  • Setting up a Branch of a Free Zone Company:
    • Just like the case of a foreign company branch within the UAE, one can open a branch of a Free Zone Company through a Local Service Agent.
    • This setup has the drawback of running two entities in two UAE sites and paying twice the renewal fees. This is the main reason why many SMEs do not find this option sustainable.
    • Alternatively, instead of opening a branch, one can choose to run the Free Zone company with a local distributor, which works out cheaper than the cost of running two UAE entities and is a more economically favorable solution.

 

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