To boost global competitiveness in the industrial sector, Dubai has launched the Dubai Industrial Strategy 2030 which has five main objectives; innovation, being home of global businesses, environmental sustainability, supporting a green economy, and adopting Islamic standards to manufacture ‘Halal’ products to become the capital of the Islamic economy. The main focus is on six sectors; aviation, ships, pharmaceuticals and medical equipment, fabricated metals, machinery and equipment, and consumer goods.
The launch of Dubai Industrial Strategy 2030 fuses the advantages offered by Dubai’s strategic location, modern infrastructure and state-of-the-art business-friendly ecosystem to achieve the goal of developing a sustainable place for industrial growth. As Dubai tries to attract foreign entrepreneurs and international businesses with an attractive investment environment, the city moves towards becoming “an international hub for knowledge-based, innovation and sustainable Industrial activities.” This is occurring through not only ease of access to the local and international market, modern infrastructure and pro-business regulations, but also by removing restrictions on bringing foreign technology, investment and skilled talent to Dubai.
However, as a foreign investor, you must be aware of the stipulations that come with obtaining an industrial license from the DED. Essentially, an industrial license allows an individual, business, or company registered in the UAE to perform activities such as manufacturing, processing and more.
Here are some things to keep in mind when applying for an industrial license in Dubai. Your company must have a physical presence in Dubai with a local industrial license such as a warehouse or factory located within the emirate of registration. Most importantly, however, is that you must have a local sponsor for most activities (while certain activities require 100% local ownership). This sponsor must be a UAE national who owns 51 percent of the shared of the company, with the foreign investor owning 49 percent.
This structure means that your local sponsor owns 51 percent of all assets owned by the company. These can range from cash, raw materials and stock, to office equipment, buildings and intellectual property. At the end of the day, the foreign investor may only have the nominee agreement which is not a legally binding or enforceable to state that he is the Ultimate Business Owner. So, what must you do to mitigate risk and protect your assets?
This is where our ownership structuring solutions step in. Our bespoke structuring solutions utilize English Common Law ADGM structures like SPVs, and not only secure capital and assets of expatriates, but also guarantee complete freedom to retain 100% beneficial ownership and decision-making control while staying in compliance with the UAE laws. Here are a few benefits associated with the process:
- All profits and assets are protected through using structures and mechanisms such as SPVs
- All decision making can be done through the shareholder (SPV) that can act through the directors (usually the investors or their legal representatives are appointed as directors)
- The share capital comprising the SPV is protected under legally binding agreements registered with ADGM
- The expatriate will have full control over the company’s assets, finance and share capital.
- Sponsors can be changed easily
- The risks associated with the potential application of inheritance rules under Shariah, if the UAE sponsor dies or becomes incapacitated, are either eliminated or considerably mitigated.
We believe in providing foreign investors with complete and ultimate control over their organization, and our team of experts ensure that your financial interests and your company’s assets are always fully protected and legally secure. Get in touch today to structure your industrial license in a way that benefits you.