On the tail end of 2018, the UAE introduced an FDI Law opening the door to possible exceptions where the mandatory 51% shareholding of LLCs by UAE nationals or entities wholly owned by UAE nationals may be lifted. This constituted a major breakthrough in relation to foreign investment rules.
This announcement was followed by further resolutions of the UAE Cabinet for specific sectors and implementation technicalities by the Ministry of Economy and the Foreign Trade Sector Investment Department. A recent publication lists the specific activities concerned along with the applicable conditions for each of them and details the application process.
The Ras Al Khaimah authorities (RAK) have now confirmed the application of the FDI Law within the Emirate. RAK companies can now be licensed with up to 100% foreign ownership for specific sectors. They can also benefit from a dual licensing scheme available with RAK Economic Zone (RAKEZ).
In practice, an FDI license will be issued per the standard procedure set by the UAE Cabinet to RAK mainland companies owned up to 100% by foreign nationals. This done, RAK entities will be able to seek a dual license from RAKEZ. Eligible licensed activities have yet to be defined by RAKEZ. It is expected that the spectrum of activities covered will be broad but not fully comprehensive.
Similarly to the dual licensing regime introduced by Abu Dhabi Global Market, Dubai Multi Commodities Center and their respective Department of Economic Developments, this option is expected to eliminate the need for licensees to secure office space in both RAK mainland and RAKEZ. With the current hardship caused by the Covid-19 pandemic, it is a welcome move expected to facilitate business for a number of existing firms, at marginal additional costs.
We are closely monitoring the matter and will provide regular updates as the guidelines on the subject and further details are released.
See the detailed procedure on our FDI Law Factsheet
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