Permitting outsiders to completely possess a business in the UAE will give a fillip to the local property market, especially the workplace area, which is still reeling from low interest due to the Covid pandemic, specialists said on Thursday.
The UAE declared on Wednesday that, effective June 1 this year, outsiders who intend to begin a business in the nation will no longer be required to look for a local sponsor or investor.
The move, which plans to pull in more foreign investments and fortify the UAE’s situation as a business center, supplements other key drives declared recently, including the UAE citizenship and long-term residency visa schemes.
“Confirmation of the 100 percent company foreign ownership law that comes into effect on June 1 will undoubtedly have a significant impact in the medium to long term for demand for office space in key markets such as Dubai and Abu Dhabi [which] are still experiencing quieter conditions in the aftermath of the global pandemic,” said Faisal Durrani, head of Middle East research at Knight Frank.
Interest in office space has been subdued since the pandemic started a year ago, particularly after a huge number of laborers overall cocooned in their homes to avoid contracting COVID-19.
With numerous workplaces left unfilled, rents have fallen subsequently. Inside the superb office segment in Dubai, rates kept on declining in the primary quarter of the year, averaging a little more than 200 dirhams ($54.45) per square foot, the lowest since the third quarter of 2012.
However, by presenting “landmark” changes to the UAE’s Commercial Companies Law, the nation has “unlocked its potential to emerge as a key global contender business headquarters,” according to Durrani.
Before the amendments, outsiders were just permitted to guarantee 100% ownership of select businesses, as well as those set up in the free zones.
Office market
Haider Tuaima, head of research at ValuStrat, said the health outbreak has in fact negatively affected the workplace market.
In view of ValuStrat’s research, office occupancy in Dubai alone decreases from 83% before the pandemic to 77.6 percent, which implies that almost a fourth of office spaces across the emirate have been vacant.
“The new changes to the Companies Law will have a positive impact on the office market, particularly for smaller offices sized between 1,000 to 2,000 square feet, and would also create further demand for shared and flexible office space,” Tuaima told Zawya.
“No doubt these changes are welcome by the market, as they are expected to fuel further demand for office space, as well as residential space,” he added.
Apart from presenting new initiatives, the UAE has been among those driving the world in the vaccine rollout, as it hopes to get back to normalcy and reestablish economic action.
Dubai has recently facilitated its COVID-19 limitations after every day COVID-19 infection rates eased back down to just under 2,000 cases this month, contrasted with almost 4,000 in January this year.