What’s new?
The Abu Dhabi Department of Economic Development (ADDED) has published a list of professional activities in relation to which foreign professionals are permitted to establish and own 100% of a professional company in the Emirate of Abu Dhabi.
The list contains 604 activities across a wide range of sectors.
According to His Excellency, Rashid Abdulkarim Al Blooshi, Undersecretary of ADDED in an announcement from the ADDED, this type of license is preferable to new investors due to its low cost, and ease of issuance.
Foreign professionals will now be able to carry out activities as accounting, training, consultancy, beauty centres, computer, and internet network companies, without the need for a local majority shareholder. However, in the absence of a UAE national shareholder, the ADDED have indicated that companies licensed to conduct a professional activity will be required to appoint a local service agent. This is consistent with the approach of the Dubai Department of Economic Development and indicates the increasing alignment between the licensing requirements in each emirate.
It is unclear whether there will be an opportunity for foreign investors to undertake a professional activity contained in the list in a limited liability company form, or whether investors will have to settle for less appealing sole establishments or partnerships. Further announcements and clarification from the ADDED are expected on this front.
What we say
The latest announcement from the ADDED is an exciting development in the Abu Dhabi business landscape. For foreign professionals,the announcement provides greater clarity on eligibility for 100% ownership. For the UAE, the changes are intended to improve the ease of doing business, enhance economic competitiveness and drive foreign investment.
Clarification on the available legal form of a professional activity business will be important for foreign professionals to assess liability issues arising from sole establishments and partnerships. It is hoped that further guidance from the ADDED will also provide a greater understanding of how this new list of professional activities will affect existing companies with the potential of recategorizing their licensed activities.
Team M/HQ will continue to monitor announcements and provide updates.
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