Food chain Mars buys 100% of Dubai unit following new UAE foreign ownership law

Global confectionary chain Mars has fully acquired its Dubai subsidiary following the new UAE law on foreign ownership.

Mars previously owned 49 per cent of the shares in the Dubai LLC, since that was the maximum percentage of permitted foreign ownership in a company incorporated onshore in the UAE.

The transaction is one of the first of its kind since the UAE announced a new FDI law last year allowing 100 per cent foreign ownership in certain sectors.

.@MarsGlobal, the international food chain, has acquired 100% of its #Dubai office, one of the first transactions of its kind since the new direct investment laws of the United Arab Emirates, which allowed 100% foreign ownership in certain sectors. pic.twitter.com/0MuOs1WZ8g

— Dubai Media Office (@DXBMediaOffice) August 29, 2019

Hassan Hassan, general counsel, AMEA at Mars, said: “This will help strengthen our presence and development in the Middle East.”

Global law firm Clyde & Co advised Mars on the acquisition of all of the shares in its subsidiary.

The financial details of the transaction were not disclosed.

Benjamin Smith, corporate partner at Clyde & Co in Dubai, said: “Following the introduction of the FDI Law, Mars has been able to acquire 100 per cent of the shares in its LLC ‘onshore’ in Dubai. This is an important strategic development from a corporate structuring perspective for our client.”

The new UAE law, which took effect in November last year, is aimed at making the country more attractive for investors while limiting the impact on local businesses, officials have said.

Foreign companies seeking to establish an entity onshore in the UAE would previously have to team up with a UAE national, who was required to own 51 per cent of the shares of the company.

The 13 sectors covered include space, renewable energy, manufacturing industry, agriculture, transport and storage, hospitality and food services, information and communications, as well as professional, scientific and technical activities, among others.

However certain sectors have been restricted from 100 per cent foreign ownership, according to the regulation. They include:

Oil exploration and production
Investigation, security, military (including manufacturing of military weapons, explosives, dress, and equipment)
Banking and financing activities
Insurance
Pilgrimage and Umrah services
Certain recruitment activities
Water and electricity provision
Fishing and related services
Post, telecommunication and other audio visual services
Road and air transport
Printing and publishing
Commercial agency
Medical retail (including pharmacies)
Blood banks, quarantines and venom/poison banks

Read more: UAE law allowing 100% foreign ownership now in force