Dubai: Dharmdev Bhatt is quite pleased with being a part of UAE corporate history. He’s got his reasons too.
His company, Amber Packaging in Ras Al Khaimah, has become the first ‘limited liability company’ in the UAE to be given 100 per cent foreign ownership status. This was done as part of the UAE’s updating of the Commercial Companies Law, which will from June 1 allow non-free zone based businesses to be licensed without the need to have a UAE national having nominal majority shareholding.
“It was last month that we were told that we can have 100 per cent ownership – this makes us the first LLC not just in Ras Al Khaimah but the whole of UAE to have this switch,” said Bhatt, who operates three facilities in Ras Al Khaimah for his packaging goods operations. “It was RAKEZ (Ras Al Khaimah Economic Zone) that told us about the UAE-first status.
“Clearly, it’s always good to be a part of history.”
Allowing full foreign ownership for limited liability companies will be a landmark move in the UAE’s corporate landscape. Through the decades, it was a given that LLcs can be formed and operate only with an Emirati partner on board and with a majority stake.
No formal request
Bhatt says there were no formal suggestions from his side on allowing full ownership. “It was the RAK authorities themselves who brought up this option being made available,” he said. “We launched operations in the emirate in 2012 and through the three facilities – two plants and one staff accommodation – had invested around Dh180 million.”
Draw up lists
The UAE federal authorities and those at the individual emirates are expected to announce shortly those businesses and sectors where 100 per cent ownership by a non-UAE national is allowed. This is the ‘positive list’, and the Department of Economic Development in each emirate will come up with their own listings. While the revised Law will immediately favour new businesses being set up, the authorities have informed that the changes to the law will also apply to existing businesses.
But the time taken to effect those changes could vary.
“With us, it took less than two months for all the paperwork to be completed and the change in ownership to be duly registered,” said Bhatt. “When we launched in Ras Al Khaimah, RAKEZ (Ras Al Khaimah Economic Zone) was the senior partner with 51 per cent.”
Amber Packaging had taken a non-free zone license at RAKEZ, which explains the need to have a local entity as partner at the time. RAKEZ issues both types of licenses, with ‘free zone’ status being the other.
The plan is to apply for full ownership in Sharjah as well – “This is where we launched operations, in 2006,” said Bhatt. “We expanded to Ras Al Khaimah subsequently because we had reached the optimum levels at the Sharjah location.
“Having got the full ownership in RAK, it will make sense to chase the same in Sharjah. I think that’s the best part for investors wanting to launch or invest more in the UAE.”
Between Sharjah and Ras Al Khaimah, Amber Packaging has taken up more than 450,000 square feet of commercial real estate. They produce specialized packaging for consumer facing industries such as food and dairy, pharmaceuticals, cosmetics and aviation.
Having got the domestic base settled, more so after the change in ownership status, the company is casting for export opportunities in higher profit markets such as Australia, Europe, the US, and Africa.