The Covid-19 pandemic is less than a year old, but it has managed to bring in a series of changes in the way the world operates. The United Arab Emirates has recently witnessed the announcement of one such major amendment. The federal government of the country has decided to change the laws that govern the foreign ownership of businesses in the UAE.
Do you have plans to start business in Dubai free zone? If yes, you should know how the imminent alterations in the above-mentioned law will affect the growth of the free zone regions in the country.
What’s the Change All about?
The month of November saw the UAE government announce that foreign investors will not need to have partnerships with Emirati shareholders to own a business in any of the seven Emirates. Experts believe that the government has decided to attract bigger investments from foreign companies.
The Actual Reason behind the Change
We all know that the main source of revenue for each of the seven emirates is oil. The sharp decline in oil prices has resulted in a major economic slide in this part of the world. The decision to allow foreigners to have 100% ownership of businesses based out of Dubai and other emirates is made to save the economy from further thrashing.
The Expected Impact of the Move
The change has taken effect from December 1 and we’ll have to wait for some time to see its impact. However, most experts feel that this is a positive move. One thing that many are concerned about is the future of the free zones in the country. Those regions used to be the default location for every foreign company planning to run a business in the UAE without any local shareholder.
According to experts, the change might ease rental differences. Additionally, foreign firms planning to start business in Dubai free zone might enjoy decision making flexibility.
What Would Happen to the Free Zones?
The free zones will be there and still be housing the most profitable foreign companies. However, the free zones might not depend only on 100% foreign ownership companies from now on. As there will be a fresh challenge to deal with for these parts of the Emirates, we might see them come up with new ways of competing with the onshore.
The Changes You Can Expect
People in the know are saying that the free zones might start offering more wide-ranging services to businesses. There can also be changes in their framework and the way they carry out transactions. Another method they can adopt to offer stiff competition to the onshore is the introduction of policies to allow tax leniency. In fact, the transformation of the free zone region of the country will be quite interesting.
Do you want to set up a business in the free zone in Dubai without any difficulty? If yes, contact the Dubai Business Setup. We are a company represented by business setup experts who will help you in establishing your business in Dubai free zone as well as the mainland.