For decades, most mainland UAE companies needed a UAE national shareholder holding at least 51% of the shares. That rule has now been relaxed. Amendments to the Commercial Companies Law, made by Federal Decree-Law No. 26 of 2020, allow full foreign ownership of mainland companies for most activities, with each emirate setting out which activities qualify.
It is one of the most significant changes to doing business in the UAE in years.
What has changed
- Foreign investors can now own 100% of a mainland company carrying out most commercial and industrial activities.
- The requirement for a UAE national shareholder has been removed for those activities.
- Branches of foreign companies no longer need a UAE national as an agent in many cases.
What has not changed
- A limited group of strategic-impact activities, such as those in certain sectors of national importance, still have ownership conditions, set by the authorities.
- Licensing authorities in each emirate decide which activities can be fully foreign-owned, and their lists are being published and updated in stages.
- The usual licensing requirements, such as premises and activity approvals, still apply.
What it means for new businesses
Founders who previously chose a free zone mainly to keep full ownership now have a real alternative. A mainland company can trade directly across the UAE, and can now be fully foreign-owned for most activities. The choice between mainland and free zone should be based on where your customers are and how you will operate, not only on ownership.
What it means for existing businesses
Existing mainland companies with a national shareholder may be able to restructure their ownership. This is not automatic: it requires agreement between shareholders, amended constitutional documents and approval from the licensing authority. Arrangements between the parties need to be unwound carefully, with legal and tax advice.
Next steps
Check whether your activity appears on your emirate’s list of activities open to full foreign ownership, and whether any conditions apply. If you are planning a new company or considering restructuring an existing one, we can help you assess the options.
This article is general information based on the rules as we understand them at the date of publication. It is not advice on your circumstances. Laws and practice change, so please speak to us before acting on it.
