The UAE government’s recent announcement of a series of strategic measures in a bid to boost the region’s economy is highly welcomed. The measures concern allowing 100 percent foreign ownership of UAE businesses, a relaxation of visa requirements for visitors to and residents of the UAE, and the introduction of an AED 50 billion stimulus package in the Emirate of Abu Dhabi.
100 percent ownership of LLCs
The UAE’s cabinet has issued a resolution approving the implementation of legislation that will allow 100 percent foreign ownership of UAE onshore businesses by the end of 2018. However, while this will significantly liberalize the UAE market and boost foreign investment, it is likely that this new law will only apply to specific sectors handpicked by the UAE government.
Relaxation of visa requirements
The key changes to the UAE visa rules, adopted by the UAE Cabinet on June 13, 2018, include:
- The introduction of a six-month visa for job seekers and residents who have overstayed their visa but still wish to work in the UAE.
- The removal of the requirement for residents to leave the UAE when renewing their visa – instead a fee will be payable for the visa to be renewed while in the UAE.
- The grant of free transit visas for two days to visitors flying through the UAE to other international destinations – this visa can be extended for up to four days by the payment of a small fee of approximately AED 50.
In addition, it has also been announced that the UAE will be issuing new long-term visas for up to 10 years for international investors, innovators and talented specialists working in medical, scientific, research and technical fields. New visas are also being considered for students of exceptional calibre, allowing them to remain in the country for between five and 10 years following graduation.
Abu Dhabi stimulus package
Sheikh Mohammed bin Zayed Al Nahyan, Crown Price of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, approved an AED 50 billion stimulus package designed to accelerate Abu Dhabi’s growth over the course of the next three years.
The exact details are due to be presented in a detailed execution plan, which the Abu Dhabi Executive Committee has 90 days from Sheikh Mohammed’s announcement to produce. However, we know that the plans are to include the following key measures for companies operating in the region:
- The exemption of all new licenses from the requirement of having an office or physical working space for two years.
- The introduction of a new instant licensing system for most commercial license types, which will serve to speed up the licensing process.
- The introduction of dual licenses for companies in Abu Dhabi free zones to allow them to work outside the free zones and participate in government tenders.
As well as boosting the UAE economy, these measures will significantly ease the way in which businesses operate in the region. Companies that are already operating in the UAE will likely be able to attract more talent to the region as employees. In addition, a simplification of the Abu Dhabi licensing system means a much easier process to establish a business in the region, which will in turn hopefully attract more foreign companies to the region. The stimulus package will also serve to encourage greater collaboration between the public and private sectors. This is especially timely as we look forward to Expo 2020.