The United Arab Emirates (UAE) has made a ground-breaking decision recently. To attract investments from around the globe and boost its profile even further, the sovereign state is all set to allow non-UAE citizens to set up their businesses in any of any part of the country.
When Will the Change Take Effect?
The change will take effect within the next six months and is believed to make the emirates even more affluent. With this change in the rule, investors will be able to establish their businesses in all parts of the country and will not need to plan for free zone business setup.
The Reason Behind This New Rule
According to information gathered from insiders, the UAE is looking to come up with a statutory framework in an attempt to attract more investment. Experts believe that this decision is a result of the changed international conditions due to the Covid-19 pandemic.
If foreigners completely own UAE-based businesses, the country’s economy will be boosted considerably, and that change would be reflected in its GDP.
The Backdrop of the Change
The year 2020 has been dismal for the UAE. The pandemic has caused serious financial hurdles for the country and there were times it was on the verge of encountering an economic crash. Dubai, the most sprawling city in the UAE, has been hit most badly. That’s because the city was undergoing an economic slowdown even before the coronavirus outbreak.
The problem began due to the weakening of the local real estate market. Things turned worse with the onset of the pandemic and the announcement of weeks of lockdown all around the globe. A large share of Dubai’s earnings come through aviation and international tourism. That income hit the bottom as most countries were not allowing international flights to travel to and from their airports.
The Number Are Not Impressive
Recently obtained numbers suggest that the year 2020 will see the overall economy of the UAE contract by as much as 6.6%. This is the highest recorded contraction since the formation of the sovereign state in 1971.
The situation is even worse for Dubai. The city will see its economy shrink by a whopping 9.8% in 2020.
The Work Was in Progress
According to information collected from reliable sources, both local and federal governments of the UAE were busy making plans to reduce the expenses of owning a business in the country much before the pandemic struck the world. Covid-19 has increased the importance of those plans and is demanding quicker implementation of the same.
Earlier foreigners were allowed to have businesses with 100% ownership only in the 45 free-trade zones in the UAE. With this change, they will no more need to plan for free zone business setup. They will be allowed to have businesses in any part of the country.
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Source – Non-UAE citizens can now fully own businesses in the country