Mubasher TV
Contact Us Advertising   العربية

New shareholding law in UAE may weigh on free zones

New shareholding law in UAE may weigh on free zones
“They will need to find another niche for themselves"

Abu Dhabi – Mubasher: The UAE-based free zones are expected to be affected negatively after the introduction of the new foreign shareholding law, which enables foreigners to owe up to 100% of local companies and will come into force in the third quarter of 2018.

This legislation will harm domestic free zones by stripping them of their main advantage, namely, the 100% foreign ownership, chairman of Dubai law firm Baker & McKenzie Habib Al Mulla told Arabian Business.

“They [free zones] will need to find another niche for themselves because their main and bestselling proposition is 100% foreign ownership and for that, they have higher charges than what investors find in mainland,” Arabian Business reported, citing the top official as saying.

Deprived of their main advantage, free zones may convert to specialised districts and provide new services, Al Mulla stated.

Under the new ownership law, foreign investors may be offered lower costs than the free zones’, he added.

Foreigners invest in free zones because they enjoy 100% ownership of their companies, but “if that is available to them in mainland at a more reasonable cost, why should they not go there?”, Al Mulla said.