UAE- NEW LAW ALLOWING FULL FOREIGN OWNERSHIP OF ONSHORE COMPANIES TAKES EFFECT ON JUNE 1

Dept. of economic development
The UAE’s Ministry of Economy has confirmed that the amended legislation permitting foreign investors and entrepreneurs to establish and fully own onshore companies, will come into effect from June 1.
Amendment to the Commercial Companies Law will ‘boost country’s competitive edge and facilitate business’, according to UAE Minister of Economy
Minister of Economy Abdullah bin Touq in a tweet confirmed that the latest decision is a new step that reflects the UAE government’s commitment to supporting the economy and enhancing its readiness for the future.
In November 2020, the UAE announced that the of businesses would take effect from December 1, 2020. However, after widening the scope of sectors eligible for full ownership by foreign investors, the law is now ready for roll out from June 1, 2021.
The long-anticipated and widely discussed reform, which will have game-changing implications on the investment landscape of the nation, was approved by President His Highness Sheikh Khalifa bin Zayed Al Nahyan last year.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has said the UAE now enjoys a fertile legislative environment for foreign direct investors in order to enhance the nation’s competitiveness.
Last month, the UAE’s Ministry of Economy also said it was working on a new legislation to include 10 new sectors to the Commercial Companies Law, which allows 100 per cent foreign ownership of onshore companies in the country.

TEMPORARY ZERO-RATING OF CERTAIN MEDICAL EQUIPMENT

On 1 September 2020, the Cabinet issued a Cabinet Decision No. 9/12 O of 2020 (“Cabinet Decision”). The Decision concerns the temporary application of VAT at the 0% rate on certain supplies and imports of medical equipment. Furthermore, the Ministerial Decision No. 380 of 2020 (“Ministerial Decision”) issued by the Minister of Health and Prevention on 6 December 2020 (with effect from 1 September 2020) specifies the medical equipment that are zero-rated in accordance with the Cabinet Decision. In accordance with Cabinet Decision No. 15/3 O of 2021, the above decisions shall be effective until 31 December 2021.
In accordance with the Cabinet Decision, a supply or import of certain medical equipment may be zero-rated. It should be noted that that the zero-rating of supplies and imports under the Cabinet Decision is separate, and in addition to, zero-rating of any other medical equipment in accordance with Cabinet Decision No. 56 of 2017 on Medications and Medical Equipment Subject to Tax at Zero Rate.
On 1 September 2020, the Cabinet issued a Cabinet Decision No. 9/12 O of 2020 (“Cabinet Decision”). The Decision concerns the temporary application of VAT at the 0% rate on certain supplies and imports of medical equipment. Furthermore, the Ministerial Decision No. 380 of 2020 (“Ministerial Decision”) issued by the Minister of Health and Prevention on 6 December 2020 (with effect from 1 September 2020) specifies the medical equipment that are zero-rated in accordance with the Cabinet Decision. In accordance with Cabinet Decision No. 15/3 O of 2021, the above decisions shall be effective until 31 December 2021.
In accordance with the Cabinet Decision, a supply or import of certain medical equipment may be zero-rated. It should be noted that that the zero-rating of supplies and imports under the Cabinet Decision is separate, and in addition to, zero-rating of any other medical equipment in accordance with Cabinet Decision No. 56 of 2017 on Medications and Medical Equipment Subject to Tax at Zero Rate.
The “medical equipment” to which the temporary zero-rating rules apply are personal protective equipment used for the protection from Covid-19, and which contain the features and meet the specifications determined and specified by the Ministerial Decision. Such medical equipment are limited to:
  • Medical face masks that are not included in the Cabinet Decision No. 56 of 2017 on Medications and Medical Equipment Subject to Tax at Zero Rate (of approved standards 14683 and UAE.S ASTM F2100);
  • Half filtered face mask (UAE.S EN 149);
  • Chemical disinfectants and antiseptics intended for use on the human body, but excluding detergents, cosmetics and personal care products (UAE.S EN 1276, EN 1650, and EN 14476:2013+A2).
  • Non-Medical “community” face mask made from textile (UAE.S 1956);
  • Chemical disinfectants and antiseptics intended for use on the human body, but excluding detergents, cosmetics and personal care products (UAE.S EN 1276, EN 1650, and EN 14476:2013+A2).

CONDITIONS TO ZERO-RATING

Date of supply/import of above mentioned medical equipment shall be within the period beginning from 1 September 2020 to 31 December 2021.

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