His Excellency Sultan bin Saeed Al Mansoori, the UAE Minister of Economy, will shortly introduce a new law allowing foreign enterprises to do local business without the services of a local partner. This will greatly simplify the work in the UAE market. It is expected that the law will come into force in 2018.
Its main advantage is that foreign companies would not be required to have a local partner holding 51% of the company. At the time, all enterprises registered outside free trade zones and performing business under commercial category (not service) require a local partner.
Under the new rules, the business climate in the UAE will become even more liberal. The rules that facilitate the liberalization of the business climate will soon be reviewed by the Federal National Council. 51% of the ownership by local citizens will still remain only in certain business areas. It is necessary to wait till more accurate information becomes public – the details will be known quite soon.
Companies operating in the oil and gas sector do not require a local partner as well as companies participating in concession agreements. This category also includes companies involved in supplying of water and electricity.
Foreign banks do not either need a local partner. The same applies to banks located in free trade zones, if this is indicated in the respective special provisions.
The expected change marks the beginning of the new phase in business development in the UAE.