100% Foreign Ownership in Mainland Dubai Companies
Discover how the UAE's amended Commercial Companies Law now allows for 100% foreign ownership in mainland Dubai. Learn the key changes, benefits, and steps to establish your business without a local partner.
Historically, expatriate business owners in the UAE were restricted to a maximum ownership stake of 49% in their companies, with the remaining 51% mandatorily owned by a UAE national, known as an Emirati sponsor or partner. However, with the amendments to the Law on Commercial Companies (CCL) effective from June 1, 2021, expatriates can now enjoy 100% ownership of businesses in the UAE mainland.
Despite these progressive changes, there remains considerable confusion among investors regarding full ownership. Misunderstandings often arise from outdated information circulating online or provided by certain consultancies. This guide aims to clarify the key changes and their implications for investors.
What's New?
Before the amendments, only certain professional services and free zones permitted 100% foreign ownership. The revised law has significantly broadened this allowance, enabling most new mainland businesses to be fully owned by foreign investors.
Industries Exempt from Full Foreign Ownership:
Certain strategic sectors still require 51% local ownership, including:
- Oil exploration and production
- Security and military services
- Banking, finance, and insurance
- Water and electricity provision
- Fishing and related services
- Postal and telecom services
- Road and air transport
- Printing and publishing
- Commercial agency
- Medical retail (including pharmacies)
These amendments mean that foreign investors are no longer bound by the minimum UAE citizen ownership percentage for most business activities. Consequently, limited liability companies (LLCs) on the mainland can now be wholly owned by foreign individuals or entities, eliminating the necessity of a local partner. However, it's crucial to analyze each business activity to determine if a local partner or agent is needed.
Reasons for Revising the Law
The UAE government revised the ownership laws to achieve several strategic goals:
Enhancing the Legislative Environment: Creating a more favorable framework for business operations.
Attracting Foreign Investment: Encouraging investments from global businesses and startups.
Ensuring Full Operational Control: Allowing foreign partners to maintain full legal and operational control without local interference.
Simplifying Business Operations: Making it easier for businesses to operate and compete.
Boosting Competitiveness: Aligning the business environment with rapid global economic changes.
Responding to Business Community Needs: Addressing the evolving requirements of the UAE's business community.
Global Attraction: Drawing entrepreneurs and investors from around the world.
How to Proceed
If you're considering establishing a business on the UAE mainland, it's likely that you won't require a local partner. However, consulting with an expert can provide personalized feedback on your specific business initiative. Each activity must be meticulously assessed to determine any potential need for a local partner or agent.
For comprehensive guidance and support in setting up your business with 100% ownership in mainland Dubai, contact Strive Consultants today. Our team of experts is dedicated to helping you navigate the legal landscape and achieve your business goals seamlessly.
