The UAE’s Commercial Companies Law reform of 2021, extended by Federal Decree-Law No. 20 of 2025, allows foreign founders to hold 100 % of most mainland businesses without a local sponsor. Strategic-impact sectors remain restricted. The reform eliminated the historic 51/49 % ownership split that had shaped UAE company formation for decades. Last updated: May 2026.
For the full UAE setup pathway, see how to start a business in the UAE: complete guide for foreign founders. The jurisdictional trade-offs between mainland and free zone are covered in UAE mainland vs free zone: which is right for your business in 2026?.
What changed with the 2021 UAE ownership reform?
Federal Decree-Law No. 32 of 2021 — the UAE’s revised Commercial Companies Law — removed the requirement for UAE national ownership in most mainland company structures. Before this reform, a UAE mainland LLC required a minimum 51 % ownership stake held by a UAE or GCC national. The remaining 49 % could be held by a foreign investor.
The reform inverted the default. From 1 June 2021, foreign founders can own 100 % of a UAE mainland company in any activity not on the government’s strategic-impact list. The amendment did not require free zone incorporation, did not require a workaround through nominee structures, and did not cap the percentage at any lower threshold.
The practical effect was immediate. According to Dubai’s Department of Economy and Tourism, new mainland business registrations by foreign founders increased by over 30 % in the 12 months following the reform. The UAE joined Bahrain as the only GCC countries to offer unrestricted foreign ownership on the mainland without case-by-case government approval.
The reform was further extended by Federal Decree-Law No. 20 of 2025, which updated the Commercial Companies Law to include provisions for cross-border re-domiciliation of foreign companies into the UAE — allowing international entities to transfer their legal seat to a UAE jurisdiction while retaining corporate continuity.
Which activities qualify for 100 % foreign ownership?
The vast majority of UAE mainland commercial, professional, and industrial activities qualify for 100 % foreign ownership under the 2021 reform. The positive list is effectively unlimited — any activity not explicitly classified as having strategic impact by the UAE Cabinet is open to full foreign ownership.
Activities that routinely qualify include:
- General trading and specialised trading — import, export, wholesale, retail, e-commerce
- Professional services — consulting, IT, accounting, design, engineering, education, healthcare consulting
- Manufacturing and processing — food, chemicals, metals, consumer goods, packaging
- Tourism and hospitality — travel agencies, tour operators, hotels, restaurants
- Real estate services — brokerage, property management, facility management
- Logistics and transport — freight forwarding, warehousing, last-mile delivery
- Media and creative services — advertising, content production, publishing (subject to TDRA approvals)
- Fintech and technology — software development, SaaS, AI services, digital agencies
- E-commerce — through the DED Trader licence or standard commercial licence
Each Emirate’s Department of Economic Development (DED) maintains a searchable activity registry that confirms foreign-ownership eligibility per activity code. Dubai’s Invest in Dubai portal and Abu Dhabi’s TAMM platform both flag restricted activities at the pre-approval stage.
Which sectors still require UAE participation?
A limited number of strategic-impact sectors remain restricted under the 2021 reform. These are activities where the UAE Cabinet has determined that national security, public order, or essential-service continuity require some degree of UAE national participation.
The confirmed restricted categories as of 2026 include:
- Oil and gas exploration and production — upstream hydrocarbon activities remain under the exclusive jurisdiction of national oil companies (ADNOC, ENOC, and Emirate-level entities)
- Defence, military equipment, and explosives manufacturing — subject to direct federal government supervision
- Security printing and coinage — currency production, passport printing, and official-document issuance
- Certain banking and insurance activities — primarily retail banking licences issued by the UAE Central Bank; wholesale banking, fintech, and insurance brokerage are increasingly open
- Pilgrimage services — Hajj and Umrah-related travel services
- Commercial fishing within UAE territorial waters — restricted to UAE and GCC nationals
- Judicial services and notary public operations
The specific list is not published as a single document. Instead, the DED of each Emirate cross-references the Cabinet-level strategic-impact classification at the point of licence application. Founders receive a rejection or a modified-ownership requirement at the initial-approval stage — before any fees are committed.
The grey zone: activities requiring sector approval
A second tier of activities is not outright restricted but requires sector-specific regulatory approval before a licence is issued. These include:
- Healthcare services — Dubai Health Authority (DHA) or Ministry of Health and Prevention (MOHAP) approval
- Education services — Knowledge and Human Development Authority (KHDA) in Dubai, Abu Dhabi Department of Education and Knowledge (ADEK) in Abu Dhabi
- Financial services — Securities and Commodities Authority (SCA) for fund management and brokerage outside DIFC/ADGM
- Telecommunications — Telecommunications and Digital Government Regulatory Authority (TDRA)
- Media and broadcasting — National Media Council or TDRA
Sector approval does not restrict ownership percentage. A foreign founder can hold 100 % of a healthcare clinic or an educational institution, subject to the relevant authority’s clearance of qualifications, facility standards, and operational compliance.
How does free zone ownership compare to mainland?
UAE free zones have permitted 100 % foreign ownership since their inception — long before the 2021 mainland reform. The ownership advantage that free zones historically held over mainland has now been eliminated for most activities.
| Dimension | Mainland (post-2021 reform) | Free zone |
|---|---|---|
| Foreign ownership default | 100 % in most activities | 100 % always |
| Restricted sectors | Strategic-impact list applies | No restrictions (within zone-approved activities) |
| Legal framework | Commercial Companies Law (Federal Decree-Law No. 32/2021) | Individual free zone regulations |
| Re-domiciliation | Supported under No. 20/2025 | Varies by free zone |
| Customer access | Full UAE mainland market | Restricted to free zone and international clients |
| Corporate tax | 9 % flat above AED 375,000 | 0 % on qualifying income (QFZP) or 9 % |
The remaining structural advantages of free zones in 2026 are tax treatment (0 % qualifying-income rate under QFZP conditions) and setup speed (5–10 working days versus 2–4 weeks). The remaining structural advantages of mainland are customer access (direct UAE market) and government-contract eligibility.
For the detailed cost comparison, see UAE business license costs: full breakdown by activity and jurisdiction.
What does Federal Decree-Law No. 20 of 2025 add?
Federal Decree-Law No. 20 of 2025 amended the Commercial Companies Law with four substantive additions that extend the 2021 reform:
Cross-border re-domiciliation
Foreign companies can now transfer their legal seat to the UAE without dissolving in their home jurisdiction and re-incorporating. The re-domiciled entity retains its corporate history, contracts, and tax identity. This is aimed at holding companies, family offices, and venture-backed startups looking to centralise in the UAE while preserving their existing corporate structure.
Updated governance standards
The amendment tightened governance requirements for LLCs above AED 10 million in capital, including mandatory annual director declarations, enhanced UBO reporting, and stricter rules on related-party transactions. These provisions bring UAE mainland governance closer to DIFC and ADGM common-law standards.
Enhanced creditor protections
New creditor-protection provisions clarify the priority of claims in voluntary dissolution, the treatment of shareholder loans, and the process for minority-shareholder exit in deadlocked companies. The amendment codifies a pre-emption right for existing shareholders in share-transfer scenarios.
Expanded company forms
The amendment introduces new provisions for holding-company structures and single-shareholder LLCs on the mainland, aligning the Companies Law with the practical reality that most foreign-founded UAE companies are single-shareholder entities.
What are the practical steps to incorporate with 100 % foreign ownership?
A foreign founder incorporates a 100 % foreign-owned UAE mainland company in six steps, with the DED handling the core licensing and ancillary authorities handling tax, labour, and immigration.
Step 1 — Choose the activity and Emirate
Select one or more activity codes from the DED registry of the target Emirate. The portal will confirm that 100 % foreign ownership is available for the chosen activities. For details on activity selection, see UAE trade license types explained: commercial, professional, industrial, tourism.
Step 2 — Reserve the trade name
Submit a name-reservation application through the DED portal. The name must not conflict with existing registrations and must comply with naming conventions (no offensive terms, no geographic names implying government affiliation). Fee: AED 620 in Dubai.
Step 3 — Obtain initial approval
The DED reviews the activity codes, ownership structure, and trade name. If sector approvals are required (healthcare, education, financial services), the DED routes the application to the relevant regulator. Initial-approval fee: AED 235 in Dubai.
Step 4 — Draft and notarise the Memorandum of Association
For LLCs, a Memorandum of Association (MOA) must be drafted and notarised at the relevant DED counter or typing centre. The MOA specifies the company’s activities, shareholding (100 % foreign in this case), capital, and governance structure. Notarisation fee: AED 1,500 to AED 4,000.
Step 5 — Lease office space and register with Ejari
A mainland company requires a physical Ejari-registered office. The Ejari contract must match the company’s trade-name and must be active before the trade licence is issued.
Step 6 — Collect the trade licence and register with authorities
Upon approval, the DED issues the trade licence. The founder then registers separately with the Federal Tax Authority (corporate tax and VAT), MOHRE (labour), GDRFA or ICP (investor or employee visas), and the relevant Chamber of Commerce.
The entire process takes 2 to 4 weeks for straightforward activities and up to 8 to 12 weeks for activities requiring sector approvals.
Frequently asked questions
Does 100 % foreign ownership apply in all seven Emirates?
Yes. Federal Decree-Law No. 32 of 2021 is federal law and applies across all seven Emirates — Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, and Fujairah. Each Emirate’s DED implements the law through its own activity registry, but the ownership principle is uniform.
Can a foreign founder hold 100 % of a UAE LLC without any UAE partner?
Yes. A single foreign natural person or a foreign corporate entity can hold 100 % of a UAE mainland LLC since 1 June 2021. There is no requirement for a UAE national partner, local sponsor, or Local Service Agent in non-restricted activities.
Does the reform affect existing companies with 51/49 structures?
Existing companies with a 51/49 % ownership split can restructure to transfer the UAE national’s shares to the foreign partner. This requires an MOA amendment, DED approval, and potentially a commercial-court filing if the existing local partner disputes the transfer. Many 51/49 structures included a side agreement that gave the foreign partner economic control; the 2021 reform allows these to be formalised into legal 100 % ownership.
Are there minimum capital requirements for 100 % foreign-owned companies?
The UAE does not impose a universal minimum capital for LLCs. However, certain activities — particularly banking, insurance, and financial services — carry sector-specific capital requirements. The standard practice for most commercial and professional LLCs is to set the share capital at AED 100,000 to AED 300,000, which is declared in the MOA but does not need to be deposited upfront in most cases.
Sources and further reading
- Federal Decree-Law No. 32 of 2021 — UAE Commercial Companies Law, effective 1 June 2021
- Federal Decree-Law No. 20 of 2025 — Amendments to the Commercial Companies Law, including re-domiciliation
- Dubai Department of Economy and Tourism — Invest in Dubai portal and activity registry (invest.dubai.ae)
- Abu Dhabi TAMM Platform — Mainland licence application and activity eligibility (tamm.abudhabi)
- UAE Ministry of Economy — Foreign Direct Investment framework (moec.gov.ae)
- PwC UAE Legal Update 2025 — Commercial Companies Law amendments summary (pwc.com/me)