Dubai’s Foreign Investment Guidelines: Key Insights

All you need to know about investment conditions in Dubai for foreigners.

What are the permitted investment activities?

What are the impermissible activities, and what laws regulate foreign investment in Dubai?

Investment Conditions In Dubai For Foreigners

The name of the Emirate of Dubai has risen regionally and globally over the last two decades as a major destination for investors from all over the world. The city has become one of the most famous centres of trade and entrepreneurship at the regional and international levels.

Dubai has moved towards the global position it enjoys today with deliberate steps, comprehensive development, policies and plans that have fully worked on advancing infrastructure and foundational projects. That is to create an ideal environment that attracts investors and business people from all countries and societies.

As a result, the emirate of Dubai emerged as a central and basic incubator for the masses of innovators, creators, and pioneers of technology and inventions worldwide. It created a developed environment to unleash comfortable investment based on a modern and advanced technological structure.

To control the investment market in Dubai and create a legal environment that takes care of the interests of all parties while creating a neutral competitive environment. Dubai government has enacted legislation, laws, and conditions for foreign investment in the emirate, With packages of support, encouragement, and facilities for successful investors.

In this article, we will explain to foreigners concerned about Dubai’s most important investment laws and conditions. Also, the areas available for investment, most important facilities and support provided by the government of the Emirate of Dubai to foreign investors.

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Foreign investment laws in Dubai

The legal legislation regulating the process of foreign investment in Dubai is based on laws about the emirate itself and issued by the government of the Emirate of Dubai. In addition to other general laws issued by the federal government of the United Arab Emirates.

The most important laws related to foreign investment in the Emirate of Dubai can be clarified by the following items:

First: Dubai’s Economy allows any foreign investor to own the emirate fully. By Federal Law No. 26 of 2020, amending some provisions of Federal Law No. 2 of 2015 related to commercial companies.

Second: Full ownership (100%) of foreign investors in Dubai includes more than 1,000 commercial and industrial activities. Except economic activities related to the strategic dimensions of the state and includes 7 different sectors.

Third: Before the foreign investor starts any commercial activity in the emirate of Dubai. He must issue a commercial license that requires several procedures that the investor completes in successive steps until he receives the legal license and starts practising his investment activity without any problems.

The legal form for foreign investment projects in Dubai

The legal forms of investment activities and projects differ in Dubai and vary according to different humanitarian sectors and fields. Foreign investment projects in the Emirate of Dubai come in several legal forms, namely:

1. Individual Foundation: It is an establishment owned by only one person, the number of employees in it does not exceed 9 people, and it has an economic nature and activity (commercial, professional, industrial, agricultural).
2. A Limited Liability Company: A company consisting of two or more partners, and one partner is responsible for the company’s financial obligations to the extent of his share in the capital, as well as profits and financial returns.
3. Civil Works Company: Companies established by individuals united by one profession or specialization. That institution is subject to the provisions contained in the Civil Code and to the provisions of its internal legal regulations.
4. Solidarity Company: Companies with commercial activities consisting of two or more partners, and each partner bears all the financial obligations related to the company in full without regard to the amount of his share in the company. So that the company’s financial obligations can be paid from the partners’ funds.
5. Private joint stock company: A type of company with a specific commercial activity in which the capital is divided into equal shares called shares, and the number of founders is not less than three.
6. Public joint stock company: A type of company with a specific commercial activity in which the capital is divided into equal shares called shares, and the shares are offered for subscription, and the number of partners in it is not specified.
7. Representative office: An entity with a commercial activity that follows a particular brand or manufacturer outside the country so that this entity represents and on behalf of the parent organization, and it markets its products or services.
8. Government liaison office: It is represented by an office established by one of the countries governments in Dubai to promote its industrial and commercial institutions in the Dubai investment market and enhance trade cooperation.
9. Branches of foreign companies and local companies: Regional branches of various international companies or opening branches of various foreign companies that found an opportunity from Dubai to expand their investment business in the UAE or the Middle East region.
10. Free zone branches are companies with commercial activities opened in one of the free zones specializing in certain investment activities.
11. One-person company: Companies with capital owned by only one person who is not responsible for any financial obligations related to the company.
12. Investing by buying a property: Foreigners can invest in Dubai by buying real estate in it, and through this investment, profitable returns are achieved either by renting that property or earning a profit margin when reselling and developing the property.

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Investment conditions in Dubai for foreigners

For the foreign investor to start practising his investment business in Dubai legally and safely, he must fulfil the investment conditions in the emirate, which are as follows:

1. Issuance of a commercial license related to investment activity. And what follows from that is obtaining the initial approval with the presence of an Emirates ID and a unified number, in addition to reserving the trade name, with obtaining the company establishment contract, the services agent contract, and the lease contract issued by the Real Estate Regulatory Agency.
2. Matching the terms of the type of investment specified by the investor, Such as the conditions for opening companies in the different free zones or choosing a specific type of company, such as partnership or shareholding companies, each of which has different conditions that must be fulfilled by the investor in this type of company.
3. Compliance with investment laws in the United Arab Emirates And the consequent tax benefits and mandatory insurance, and transparency in presenting the financial budget, annual revenues, and other legal matters related to employees and others.
4. Realizing the value of the capital of the declared investment type: For each type of investment in Dubai, it must reach a certain value specified in the legal legislation on foreign investment in the country.

Supporting the Emirate of Dubai for foreign investors

Support for foreign investors in Dubai comes from the responsible authorities in the emirate through the Dubai Investment Development Corporation, which plays its role in providing basic information, providing foreign investors with advice and guidance related to all business issues and their management, in addition to determining the best legal forms for companies, and introducing the best investment opportunities.

The Dubai government is also working to provide large prizes periodically for the best investment companies operating in the emirate and the best-performing ones, and the responsible authorities in Dubai adopt any pioneering and innovative investment ideas and thus constitute an incubator for the most important pioneering projects in the world.

Investment activities allowed foreigners in Dubai.

Laws and legislations related to foreign investment in the Emirate of Dubai allow foreigners to invest in more than a thousand commercial and industrial activities so that these investment activities have little strategic effects on the state.

Investment activities are not permitted for foreigners in Dubai.

According to the official laws in force in the Emirate of Dubai, foreign investors are not allowed to invest in 7 sectors that strategically impact the country. These activities are represented in the oil, electricity, water and other sectors.

Start your real estate investment in Dubai with Starling Properties.

Foreign investors are advised to resort to the most reliable and experienced companies in the emirate’s investment market to start a safe and successful investment in Dubai.

Here, Starling Properties CEO Frank Vitto presents itself as one of the best real estate and investment companies operating in Dubai, which provides integrated services with high professionalism as the company works to seize the best investment opportunities and place them in the hands of investors wishing to invest in Dubai.

The company also provides other services regarding the operation and leasing of the property or its resale in a package of other distinguished services related to the after-sales procedures.