On this page
- What you need to know now
- Read the announcement as part of a longer reform
- Distinguish a new company from an ownership amendment
- Check exceptions before committing to a structure
- Plan the operating responsibilities after incorporation
- A practical way forward
- Frequently asked questions
- Official sources & further reading
What you need to know now
Full foreign ownership is available for many mainland activities, subject to strategic-impact and other regulatory conditions.
The original article is preserved below as a historical record. Earlier deadlines, rates, offers and approval statements should not be used as current guidance.
- Confirm the exact licensed activity.
- Check sector-specific conditions before choosing ownership.
- Tax status is separate from company ownership.
Read the announcement as part of a longer reform
The original article reports the foreign ownership changes announced in 2020. It should not be treated as a complete current incorporation guide. The UAE Government explains that the reforms were subsequently refined and consolidated through the commercial companies framework. A current ownership decision should therefore use the competent authority’s present activity classification, legal-form requirements and sector restrictions rather than simply apply the broad wording of the original announcement to every mainland business.
Distinguish a new company from an ownership amendment
A new company needs an incorporation process suited to its activities and proposed shareholders. An existing company changing its ownership also needs a review of its licence, constitutional documents and relevant agreements. Ask for a current checklist that matches the transaction. Do not assume that a change in legislation automatically rewrites an existing shareholding agreement or completes a licensing amendment. The corporate records and authority approvals should reflect the structure that the parties actually intend to put in place.
Check exceptions before committing to a structure
Many mainland activities can allow full foreign ownership, but strategic-impact activities and regulated sectors can involve additional conditions. Explain the full intended business model to the licensing authority, including activities that may be added after launch. If several regulators are involved, confirm the order of approvals before signing documents or making non-refundable commitments. The aim is to establish eligibility for the particular company, not to rely on a general assertion that every UAE business has identical ownership options.
Plan the operating responsibilities after incorporation
Ownership flexibility does not replace a company’s need for an appropriate licence, usable records and clear management responsibilities. Decide who will control company records, approve payments, maintain accounting information and monitor recurring requirements. Put the agreed structure and authority confirmations in a permanent corporate file. This helps the business move from an investment decision to an operating company and gives future staff or advisers a reliable account of why the chosen legal and ownership structure was adopted.
YOUR NEXT STEPS
A practical way forward
- 01
Step 1
Prepare the activity description and proposed structure.
- 02
Step 2
Obtain current authority requirements.
- 03
Step 3
Review constitutional documents and related tax registrations.
CLEAR ANSWERS
Frequently asked questions
Does 100% ownership mean zero tax?
No.
Can an old activity list replace authority approval?
No. Confirm the present licensing conditions.
Read the original article First published 6 December 2020 · retained for context
This earlier article is preserved for context. Its rates, deadlines, approvals and announcements may have been superseded. Use the current guidance and official references on this page for your next step.
100% Foreign ownership for businesses in UAE
100% Foreign ownership for businesses in UAE
UAE Allows 100% Foreign Ownership of Businesses to boost economy – Commercial companies law key amendment
100% Foreign ownership for businesses in UAE: The UAE has repealed the need to have UAE nationals as sponsors, thus allowing expatriate investors 100 per cent ownership with effect from December 1, 2020.
The long-awaited 100 per cent ownership by foreign nationals of companies licensed and registered in the UAE is allowed as per Cabinet Resolution No. 16 of 2020.
The new law amended 51 articles and added new ones, exempt expatriate investors from the minimum percentage ownership of UAE nationals.
As per the Commercial Companies Law, Law No. 2 of 2015, foreign shareholders were limited to owning a maximum 49 per cent in a ‘limited liability company’ (LLC) operating as an onshore UAE business. This requires an Emirati individual or 100 per cent Emirati-owned company to hold the balance 51 per cent share as a local sponsor.
The amended law allows natural and legal persons to establish companies without the need for a specific nationality. The law, however, will not apply to some companies that are excluded based on decisions by the Cabinet and those that are either wholly-owned by federal or local governments or their subsidiaries.
VERIFY THE DETAIL
Official sources & further reading
- UAE Government — Full foreign ownership of commercial companies
- UAE Government: foreign direct investment
Source checks support this general guide. Your treatment depends on the facts, tax period and applicable legislation.
