100% Foreign Ownership in the UAE: What Founders Need to Know About Mainland Companies

For years, one of the first questions any foreign founder asked about the UAE mainland was: "Who will be my local partner?" Until the law changed, most mainland companies needed a UAE national shareholder with a majority stake, and branches of foreign companies needed a local service agent. That shaped everything from cap tables to how founders thought about control.

That picture has changed. Today, investors of all nationalities can establish and fully own companies on the UAE mainland in most business activities. This guide explains what changed, what is still restricted, and how founders should think about ownership when they plan a setup. Every fact here comes from the UAE Government portal, the Ministry of Economy and Tourism and the published Cabinet resolution, all linked at the end.

General information, not legal or tax advice. Rules change; check the official source.

What the law changed

The UAE Government portal says the Government "amended the Commercial Companies Law, granting foreign investors full ownership of specific businesses. This means that foreign investors' share will not be limited to 49 per cent as before; instead, it can be as much as 100 per cent."

The legal basis, according to u.ae:

• Federal Decree-Law No. 26 of 2020 came into effect in early 2021 and overhauled the Commercial Companies Law No. 2 of 2015 by permitting 100 per cent foreign ownership of mainland companies.
• The changes were later refined and consolidated by Federal Decree-Law No. 32 of 2021 on Commercial Companies.

The Ministry of Economy and Tourism puts it simply: "Investors of all nationalities can establish and fully own companies in the UAE." It adds that a foreign company wishing to open a branch and practise its activities in the UAE "does not require the presence of a UAE national agent."

The four headline changes

The u.ae page lists the key changes:

1. 100 per cent foreign ownership. The law abolishes the requirement for a majority Emirati shareholder or local partner, so foreign investors can fully own onshore (mainland) companies.
2. Removal of local agents. Branches of foreign companies no longer have to appoint a UAE national service agent.
3. More IPO flexibility. Companies converting into joint stock companies may, subject to approval, offer up to 70 per cent of their shares through an IPO, compared with 30 per cent before.
4. A strategic-sectors exception. The Cabinet can set up a committee to identify activities of "strategic impact" and set specific licensing requirements for them, which may include limits on foreign ownership.

For most early-stage founders, the first two points matter most. The IPO change is a long way off for a startup, but it signals a more open capital-markets direction.

What is still restricted

Full ownership is the default, not a universal rule. The u.ae page lists activities that are not allowed to be fully owned by foreigners. They relate to:

• security and defence activities and activities of a military nature
• telecommunications
• banks, exchange, financing, insurance, and bank note or coin production
• other categories, including commercial agencies, Hajj and Umrah organising, Holy Quran recitation institutes, fish catching, natural pearl catching and marine animal catching.

The Cabinet's strategic-impact list

The detail sits in Cabinet Resolution No. 55 of 2021 on the list of activities with strategic impact (published on the Invest in Dubai legislation library). For each activity, it names a regulator whose approval and requirements apply, for example:

• the Ministry of Defence and Ministry of Interior for security, defence and military-type activities
• the Central Bank of the UAE for banks, exchange bureaus, finance institutions, insurance and currency printing
• the Telecommunications and Digital Government Regulatory Authority (TDRA) for telecommunications.

For these activities, the regulator decides things like the shareholding proportion of UAE citizens and foreign investors, and board representation. For services related to fisheries, the resolution sets the citizens' shareholding at 100%.

What this means for a startup: if you are building in fintech, insurtech, telecoms or defence-adjacent technology, do not assume full ownership. Check with the relevant regulator early, because it can shape your entire structure.

Mainland or free zone: does ownership still decide it?

Before the law changed, full ownership was one of the main reasons founders chose a free zone. Free zones remain a strong option for many businesses, but ownership alone is no longer the deciding factor for most mainland activities.

Questions that now matter more:

• Where are your customers? If you will sell directly to UAE consumers and businesses, ask each authority what your licence allows you to do and where.
• Do you need government contracts? Our post on SME government procurement covers where to start.
• What does your activity need? Some activities are only available, or easier, in particular jurisdictions.
• What office or visa setup do you need? Requirements differ by authority.

The Startup Roof blog has a full comparison in "Free zone vs mainland" and a checklist in "Choosing a free zone: 10 questions to ask".

Planning ownership when you have co-founders

Being allowed to own 100% is not the same as deciding who owns what. With the local-partner question gone, founders need to make their own ownership decisions early and clearly.

1. Agree the split before you apply

Licensing authorities will ask for the shareholder details at application. Settle the split between co-founders before that point, in writing. Our post on finding a co-founder covers the conversations to have early.

2. Think about future hires and investors

A company with one or two founder-shareholders is simple. If you plan to bring in more shareholders later, ask the authority how shareholder changes are handled for your legal form, and what documents they require.

3. Record your beneficial owners

Whatever your ownership, UAE companies must keep records of their ultimate beneficial owners. Our UBO register post explains what to record and when.

4. Choose the legal form deliberately

The Ministry of Economy and Tourism notes that full ownership applies across the legal forms in the Commercial Companies Law. The right form depends on your plans. Get proper advice before you choose.

Common misunderstandings

• "Every activity can now be 100% foreign-owned." No. Strategic-impact activities have their own conditions, and a few are reserved.
• "I still need a local service agent for my branch." The u.ae page says this obligation was eliminated for branches of foreign companies.
• "Ownership rules are the same in every emirate." The federal law sets the framework, but licensing is done by the competent authority in each emirate. Check the local requirements, such as the Department of Economy and Tourism in Dubai.
• "An old article from 2019 is still accurate." Many web pages pre-date the 2021 changes. Check the date and the source.

A simple checklist before you apply

1. Write down your exact business activity.
2. Check whether it falls under a strategic-impact or restricted category.
3. If it does, find the regulator named in Cabinet Resolution No. 55 of 2021 and read its requirements.
4. Decide your legal form and shareholder split.
5. Confirm the current requirements with your emirate's licensing authority.
6. Keep your UBO records from day one.

Official sources

• UAE Government portal, Full foreign ownership of commercial companies: https://u.ae/en/information-and-services/business/Doing-business/doing-business-on-the-mainland/full-foreign-ownership-of-commercial-companies
• Ministry of Economy and Tourism, 100% Company Ownership: https://www.moet.gov.ae/en/-/100-company-ownership
• Cabinet Resolution No. 55 of 2021 on the list of activities with strategic impact: https://www.visitdubai.com/-/media/Files/invest-in-dubai/corporate-legislation-docs/companies-legislation/en/cabinet-resolution-no-55-of-2021

Last checked: 18 October 2026.

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