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DUBAI - Foreigners in the UAE may soon be able to own 100 per cent of businesses located outside the nation’s economic free zones, under more liberal rules that officials in Dubai are promoting in the hope of boosting foreign investment to help counter the financial slowdown, a top Dubai government official said on Sunday.

Government officials of all seven emirates are now assessing the likely benefits, and costs, of such a step, said Khalid Al Kassim, the Deputy Director General for Economic and Sector Development at Dubai’s Department of Economic Development, or DED. Al Kassim said it is in the UAE’s best interest to ease the restrictions that now bar foreigners from owning the majority of any business outside a free zone.

“We are trying to push 100 per cent ownership for the whole country, but Dubai alone cannot do it,” he told a business meeting organised by the DED and the Italian Business Council of Dubai and Northern Emirates.

The UAE has 30 free zones where foreigners can be sole owners of a business. Otherwise, an overseas firm can only establish a presence in the UAE by setting up a branch or forming a company in which a local sponsor — a UAE citizen — owns at least 51 per cent.

Current laws governing property and business ownership are being examined, and the federal government will introduce new rules and regulations aimed at attracting more investors, Al Kassim said. He did not give a time frame for approval of these new rules.

Dr Nasser Saidi, Chief Economist at Dubai International Financial Centre, said such a change would not only attract substantial new foreign direct investment in the UAE but would also help generate jobs. Foreigners set up 342 projects last year in Dubai, up 59 per cent from 2007, while foreign direct investment in the emirate soared by 123 per cent to a total of $21 billion, according to a study released last month by the Financial Times FDI Intelligence.

“We are looking to revise rules and regulations,” Kassim said. “If there are concerns, the laws will be made flexible according to the needs of the business community.”

Officials are also considering making it cheaper for foreigners to do business as way of encouraging investment. “Any fee that does not provide a service to business would be removed,” Kassim said.

http://www.khaleejtimes.com/DisplayArti ... May439.xml

About damn time if you ask me. No more lazy "partners" sucking off 51% of profits.

dresden wrote:About damn time if you ask me. No more lazy "partners" sucking off 51% of profits.

Yeah, there is a young guy at my work who 'owns' seven businesses apparently. He drives a BMW 7 series. Money for nothing.

^ Chicks for free. Why not, put in the time and work, he deserves it. Unless he's part of the 51% ownership as a local crowd.

Nah, that's what I was saying. He's the 51% silent partner in all of them. He does nothing other than sign papers and get a monthly fee for it.

EDIT: Well ok, maybe he does more than we realise, but that's just what it looks like. He works full time for us so he's not running them during the day.

Ahh... well, I still can't really knock him. He's using the system to its fullest. It's the governing bodies that my opinion is directed toward.

Yeah, fair point. I'd do it if I could.

A lot of silent sponsors give up their "51%" for a reduced fixed fee that reflects the amount of work they do - eg signing papers, printing letters, getting new staff through the medical test a bit quicker.

This is fair enough, the company is allowed to work within a realistic financial framework and the sponsor gets an income.

A lot of problems arise when after a few years the sponsor gets greedy and demands the 51% effectively putting the company out of business.

While I can see reforms being made to the system I can't see it being abolished altogether, less they upset every single Emarati.

Unlike the Good ol days ( Deadlife) things are lot different today.

The service tax is phenomenally high.

Rental rates in malls have dropped, but even that was phenomenally high not so long ago.

If ur a company and you want to set a warehouse in the free zones there are hefty clauses associated with it. A freezone is no place for an SME.
The recession has made it pretty clear that large MNC's will no more be expanding. Economy will have to be stimulated by SME's. These SME's can definitely not afford freezones.
The only other way to induce entrepreneurship would be to scrap the sponsorship system.

dresden wrote:About damn time if you ask me. No more lazy "partners" sucking off 51% of profits.

Give me a break, do you really know what your talking about?

Take all kit kat's you need Sage,
I have not personally been involved in the intricacies of registering a non-freezone company, but I know plenty who have and many of them have had awful experiences. (Yes, there are always 2 sides to every story)

I've heard everything from the "investor" demanding free services from the company to trying to out the partner and take over the business for themself. As FTD mentioned earlier about the "fixed fee". I'd love to hear someone explain to their "investor" that the company is facing a crisis and the "fixed fee" cannot be paid out until the bank accounts are healthy again.

I cannot fault the investor any of this. Given the opportunity, I would do any different. It's a numbers game.

If I could re-phrase my earlier comments, I would say that many "investors" are only looking out for themselves, but can bring a lot of vital connections and networks to the business which will benefit both partners.

However, I still believe 51% ownership is not much of a motivator (if that is the end goal), that rule will eventually need to be re-worked by the gov't... hopefully sooner than later.

People do not realise the partner's role. The sponsor or 51% owner to our venture in UAE has opened so many doors that we can not have even managed in few years down the line.

We give a fixed sum each month, which once all the projects see light will be just 10% of the profits. I am happy to give him more for what he has done to help us establish ourselves in UAE.

Its about time making this place competitive for everyone, incl.
locals.

sage & onion wrote:

dresden wrote:About damn time if you ask me. No more lazy "partners" sucking off 51% of profits.

Give me a break, do you really know what your talking about?

Why not correct him Sage????

DUBAI - Foreigners in the UAE may soon be able to own 100 per cent of businesses located outside the nation’s economic free zones, under more liberal rules that officials in Dubai are promoting in the hope of boosting foreign investment to help counter the financial slowdown, a top Dubai government official said on Sunday.


Question is: Is there anythign worth owning even 5% of here???

michaeldubai wrote:DUBAI - Foreigners in the UAE may soon be able to own 100 per cent of businesses located outside the nation’s economic free zones, under more liberal rules that officials in Dubai are promoting in the hope of boosting foreign investment to help counter the financial slowdown, a top Dubai government official said on Sunday.


Question is: Is there anythign worth owning even 5% of here???

Answer: Errrr, no.

It would be good if you can put up a business here and own 100%...but how will they feed all the locals? solutions to that they will intruduce tax in the near future...

Bora Bora wrote:

michaeldubai wrote:DUBAI - Foreigners in the UAE may soon be able to own 100 per cent of businesses located outside the nation’s economic free zones, under more liberal rules that officials in Dubai are promoting in the hope of boosting foreign investment to help counter the financial slowdown, a top Dubai government official said on Sunday.


Question is: Is there anythign worth owning even 5% of here???

Answer: Errrr, no.

I disagree, proper business model + influential contacts can and will go long way.

karans wrote:People do not realise the partner's role. The sponsor or 51% owner to our venture in UAE has opened so many doors that we can not have even managed in few years down the line.

We give a fixed sum each month, which once all the projects see light will be just 10% of the profits. I am happy to give him more for what he has done to help us establish ourselves in UAE.

What have you been smoking mate. My family and my self have been doing bussiness here for the past 30 years and have had to deal with these 51% "partners" all the time.

Yes sometimes it helps to have a powerfull sponsor but if you put over 30 years of fees just to sign papers sometimes you think is it worth it. I personally managed to end up with one greedy SOB who would crib for even 50 dhs. Thank God I'm dome with him.