UAE foreign ownership law grants 100% authority to Mars in Dubai
Following the latest UAE foreign ownership law, Mars, an American global manufacturer of confectionery, pet food, and other food products, has now fully acquired its Dubai subsidiary. The global confectionary chain Mars now has a 100 percent ownership in its Dubai unit.
The foreign ownership law is one of a series of economic reforms aimed at spurring investment and attracting foreign investors amid an economic slowdown in the Gulf. The UAE foreign ownership law, introduced by the Gulf state last year approved a new foreign investment law that allowed foreigners to own more than 49 percent and up to 100 percent in some UAE businesses.
In order to establish an entity onshore in the UAE, the foreign companies had to team up with a UAE national – required to own 51 percent of the shares of the company. This refrained the foreign companies to work openly in accordance to the Gulf laws.
The State’s move was considered to be bringing prosperity, allowing the expansion of other businesses in the area, which would eventually strengthen the presence of businesses bringing development in the Middle East region.
In July, it was disclosed that the 13 other sectors were permitted for 100% foreign ownership. Some of these included space, transportation, hospitality, and professional, scientific and technical activities.
Due to the limitations of permitted foreign ownership in a company, Mars previously owned only 49 percent of the shares in the Dubai LLC as that was the maximum permitted percentage incorporated onshore in the UAE. However, recently it owned 100 percent unit, which was the first of its kind.
Dubai Media Office on August 29 stated, “@MarsGlobal, the international food chain, has acquired 100% of its #Dubai office, one of the first transactions of its kind since the new direct investment laws of the United Arab Emirates, which allowed 100% foreign ownership in certain sectors.”
Though the financial details of the entire transaction and Mars’ 100 percent ownership have not been disclosed, the analysts believe that it would offer an important strategic development from a corporate structuring perspective for their clients.
With the UAE foreign ownership law, the country would open up their economy and businesses to the investors, which would have a positive impact, promoting growth. Meanwhile, many other investors in sectors such as oil exploration and production, investigation, security, military, banking and financing activities, transport, fishing etc. are eagerly waiting for 100 percent ownership.
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