SME Dubai opens the door to 100% ownership of onshore companies with a view to boost innovation.

By Bruno Gremez, Co-founder FincluzivSmart Fintex and CT&F.

The above title may sound bizarre for foreigners who are less familiar with the UAE or the Gulf region. All the more since the UAE are known as a hub for business in the MENA region and have built up a strong reputation as a business-friendly country in the world.

One has to realise though that while foreigners can have 100% ownership of their business if their company is established in so-called free zones, companies established “onshore”, i.e. outside any free zone, must be owned for 51% by a local partner, leaving the foreign shareholders with a minority stake of maximum 49%. Why bother? Because onshore companies can do things that offshore companies cannot. For instance, doing business inside the UAE and domestic transactions falls in principle outside the scope of any free zone company.

This is the reason why this new initiative by Dubai SME, an agency of DED (Dubai Economic Development), may be very significant. It could unlock initiatives and investments by enabling entrepreneurs and startups to enter the UAE as full-fledged local, onshore companies with new and innovative ideas and giving them the opportunity to rapidly scale up their business in the UAE.

Dubai SME has offered 100% ownership to small and medium entrepreneurs if they are able to demonstrates that they have completely new and innovative business ideas and the ability to execute them.

This step shows that the government of Dubai is not only taking measures to attract big businesses, but also and even small and medium entrepreneurs, which will be provided with incentives to grow and contribute to the diversified local economy. Currently, SMEs contribute 40% in the GDP of the Emirate of Dubai and the government has the ambition to increase this share up to 45% by 2021 (in less than 4 years time!).

This step is especially important for entrepreneurs who have bright ideas and less capital, and especially the ambition to conquer parts of the local market with their ventures.


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