20% up start new businesses UAE

Government initiatives and Positive Market 

The outlook is among key factors behind the increase.

Abu Dhabi: A firm that helps new companies set up in the UAE has said that inquiries by entrepreneurs looking to open businesses in the country have shot up by 20 percent
in the first half of 2019, crediting government-led initiatives among the key factors behind the increase.

“The introduction of new licensing and visa regulations have really eased the process of starting a new business,"  Meet Joshi, chief executive officer for the UAE-based Flying Colours, which has been operating for more than 15 years helping companies getting started in the UAE.

"The UAE is vibrant, but it is also solid and has a proven track record, which is why so many people are attracted to open a business in the country,” Joshi added.

“Currently we are receiving monthly 800 to 1,000 enquiries [on starting a new business], which is 20 percent higher than last year,” he added, highlighting how the numbers have shot up.

Joshi credited the surge in interest to the easing of government regulations as well as long term visas for investors, saying the measures were sending positive messages for entrepreneurs.



“The new rules by the Department of Economic Development for instant licence and allowing licences on desk spaces have been really helpful in cutting down costs for many businesses. Also, the relaxation of employment visa fees by the Ministry of Labour and the total removal of the labour deposit have also helped companies cut down their hiring costs.

“The new 5-year and 10-year residence visas announcement and the announcement of certain sectors allowing 100 per cent ownership have also ignited interests for people to open new businesses,” he added.

Many of the enquiries have also come from abroad according to Joshi, with the range of businesses covering several different sectors.

“The total inquiries are a mix of local and international. At least 30 percent of inquiries is international, mainly from countries like Pakistan, the UK, China, india and Africa.

“The hot favorites have always been tourism, trading, and software/information technology. Apart from those, we have also seen a rise in consultancy services
[human resources/management/information technology/tax], Food sector [catering, restaurants] and E-Commerce,” he added.

Mars buys 100% of Dubai unit following new UAE foreign ownership law

Commenting on the overall market for new businesses, Joshi said the market was looking positive due to a number of factors such as the upcoming Expo 2020 and the UAE’s attractiveness for doing business.

“We are hoping that the new governmental rules stimulate the economy which will naturally bring a positive boost for all business. Also, UAE being a country founded on strong business principals, the country should remain attractive to new investors.

“The other [positive] market factors have always been the zero income or corporate taxes, world-class business infrastructure and the reputation of the country with respect to ease of doing business. Moreover, the upcoming Expo 2020 has definitely led to an increase in new business formations as investors will try to take advantage of this big platform,” he added.

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The UAE announced a new FDI allowing 100 percent foreign ownership

Mars buys 100% of Dubai unit following new 

UAE foreign ownership law

Global confectionary chain Mars has fully acquired its Dubai subsidiary following the new UAE law on foreign ownership.

Mars previously owned 49 percent of the shares in Dubai LLC, since that was the maximum percentage of permitted foreign ownership in a company incorporated onshore in the UAE.

The transaction is one of the first of its kind since the UAE announced a new FDI law last year allowing 100 percent foreign ownership in certain sectors.

Hassan Hassan, general counsel, AMEA at Mars, said: “This will help strengthen our presence and development in the Middle East.”

Global law firm Clyde & Co advised Mars on the acquisition of all of the shares in its subsidiary.

The financial details of the transaction were not disclosed.

Benjamin Smith, the corporate partner at Clyde & Co in Dubai, said: “Following the introduction of the FDI Law, Mars has been able to acquire 100 percent of the shares in its LLC ‘onshore’ in Dubai. This is an important strategic development from a corporate structuring perspective for our client.”

The new UAE law, which took effect in November last year, is aimed at making the country more attractive for investors while limiting the impact on local businesses, officials have said.

Foreign companies seeking to establish an entity onshore in the UAE would previously have to team up with a UAE national, who were required to own 51 percent of the shares of the company.

The 13 sectors covered include space, renewable energy, manufacturing industry, agriculture, transport and storage, hospitality and food services, information and communications, as well as professional, scientific and technical activities, among others.

However certain sectors have been restricted from 100 percent foreign ownership, according to the regulation. They include:

Oil exploration and production

The investigation, security, military (including manufacturing of military weapons, explosives, dress, and equipment)

Banking and financing activities

Insurance

Pilgrimage and Umrah services

Certain recruitment activities

Water and electricity provision

Fishing and related services

Post, telecommunication and other audiovisual services

Road and air transport

Printing and publishing

Commercial agency

Medical retail (including pharmacies)

Blood banks, quarantines, and venom/poison banks