IN A BID to attract wider investment and boost the gulf economies, UAE members have opted to remove one of the main barriers to trade – the requirement for a local sponsor.
Understandably, the changes to ownership laws being introduced across the UAE have received a warm welcome from the business community, who believe it will further facilitate doing business in the country and attract foreign investment.
In today’s Shipleys Tax we look at what’s changed and how it impacts on those looking to trade in the Gulf.
What are the reforms?
The reforms to companies’ law are broadly wide-ranging, but it is the removal of the requirement for a local sponsor for companies that operate onshore that is seen as the biggest potential incentive for investment flows into the country.
For companies that currently have sponsors it will reduce their operating costs and create a more competitive environment, it will further boost the number of onshore companies opening up.
This is part of a giant step forward along a path that the UAE has been undertaking for a number of years, but it is anticipated that this level of rapid change will have a significant impact.
It makes the UAE a much more attractive as a destination for foreign investment.
The removal of the requirement for a local sponsor will give entrepreneurs a greater sense of control over their own business and remove barriers to trade, aligning the economies with that of the UK and others.
It is also likely to provide an overall demand boost for commercial property, which has witnessed a few difficult years since the decline in oil prices which began in 2014.
The changes are part of a package of legislative reforms aimed at ensuring the UAE retains its position as the leading hub for regional and international business.
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