For decades, the question of foreign business ownership in the UAE was met with a complex answer. The requirement for a local sponsor (a UAE national holding 51% of the company) was a defining feature of the Mainland commercial landscape. If you’re an entrepreneur or investor looking at the UAE market, you need to know the rules.
The good news? The legal framework has undergone a historic transformation. Yes, expats can now own 100% of a business in the UAE, but it depends on your chosen location and business activity. This guide breaks down the latest 2025 updates to help you make an informed decision.
The Landmark Shift: UAE Commercial Companies Law Update
The most significant change came with Federal Decree-Law No. (26) of 2020, which amended the Commercial Companies Law. This law, fully effective from June 1, 2021, removed the long-standing requirement for UAE nationals to own a majority share in onshore companies.
What does this mean for you?
This amendment allows expatriate investors to own 100% of the shares of limited liability companies (LLCs) established on the UAE Mainland, without the need for a local service agent in most cases. This was a strategic move by the UAE government to boost foreign direct investment (FDI), attract skilled professionals, and solidify the country’s position as a global business hub.
However, it’s crucial to understand that this 100% ownership is not absolute across all sectors. The law grants individual emirates and specific regulatory authorities the power to define a “Positive List” of economic activities and sectors where 100% foreign ownership is permitted.
Where Can Expats Own 100% of a Business?
Your path to 100% ownership primarily depends on where you choose to set up your business. The UAE offers three main pathways, each with its own rules.
1. UAE Mainland Companies
The Mainland allows you to do business directly with the UAE market and government entities without restrictions.
- The Positive List: The UAE Cabinet regularly issues a list of economic activities that qualify for 100% foreign ownership. This list is extensive and covers over 1,000 activities across sectors like:
- Construction and Building
- Hospitality and Food Services
- Information Technology
- Education and Healthcare
- Manufacturing and Industry
- Management and Logistics Consultancy
- The Requirement: For activities not on the Positive List, the previous rule of 51% UAE national ownership may still apply. It is critical to verify your specific activity with the Department of Economic Development (DED) of the respective emirate (e.g., Dubai DED, Abu Dhabi DED).
2. Free Zone Businesses
This has always been the most straightforward route for 100% expat ownership.
- How it Works: Free Zones are designated economic areas with their own independent regulations, authorities, and infrastructure. They are designed to encourage foreign investment.
- Key Benefits:
- 100% foreign ownership and full control over your business.
- 100% repatriation of profits and capital.
- Corporate tax incentives and often 0% import/export duties.
- Streamlined processes for licensing and company formation.
- Consideration: A Free Zone company is typically limited to operating within the Free Zone or overseas. To conduct business directly within the UAE Mainland market, you will generally need to either establish a separate Mainland entity or work through a local distributor/service agent.
3. Setting Up in Abu Dhabi’s ADGM or Dubai’s DIFC
These are not just Free Zones; they are international financial centers with their own common-law legal frameworks and judicial systems.
- ADGM (Abu Dhabi Global Market): Located on Al Maryah Island.
- DIFC (Dubai International Financial Centre): Located in the heart of Dubai.
- Why they are unique: They offer 100% foreign ownership, a robust legal system based on English common law, and a world-class ecosystem for financial services, innovation, and technology companies. They are ideal for fintech, venture capital, and professional services firms targeting international markets.
Key Considerations for 100% Expat-Owned Companies
Owning your business outright comes with important responsibilities.
Licensing and Regulatory Compliance
Whether on the Mainland or in a Free Zone, you must obtain the correct trade license for your activity (commercial, professional, industrial, or tourism). Annual license renewals and adherence to specific authority rules (e.g., Dubai Healthcare City Authority for medical practices) are mandatory.
UAE Corporate Tax Law
Introduced in June 2023, the UAE Corporate Tax law applies to most businesses. However, many Free Zones offer a 0% Corporate Tax incentive on qualifying income for qualifying activities. Understanding your tax obligations from the outset is non-negotiable. Consulting with business setup consultants in Dubai or a tax advisor is highly recommended to structure your company optimally.
Local Partner vs. Local Service Agent
It’s vital to distinguish between these two:
- Local Partner (Shareholder): Previously required to hold 51% of a Mainland LLC. This is no longer required for activities on the Positive List.
- Local Service Agent (LSA): A mandatory requirement for certain professional license holders and Free Zone companies wishing to conduct limited activities on the Mainland. An LSA is a UAE national or a 100% UAE-owned company that facilitates government liaison services for a fixed annual fee. They do not have any ownership of or liability for your business.
Step-by-Step: How to Set Up Your 100% Expat-Owned Business
- Determine Your Activity: This is the most critical step. Your business activity will dictate your licensing authority and ownership eligibility.
- Choose Your Jurisdiction: Decide between Mainland (if your activity is on the Positive List), a Free Zone, or a financial center (DIFC/ADGM) based on your target market and operational needs.
- Select a Trade Name: Choose a unique name and get initial approval.
- Apply for Initial Approval: Submit your business plan and application to the relevant authority (DED or Free Zone).
- Draft Your Legal Documents: This includes the Memorandum of Association (MoA) for Mainland companies or the Incorporation Documents for Free Zones.
- Secure Your License: Upon approval and payment of fees, you will receive your trade license.
- Open a Corporate Bank Account: Present your license and company documents to a UAE bank to open your business account.
Given the nuances, many expats find immense value in partnering with experienced business setup consultants in Dubai. They navigate the bureaucracy, ensure compliance, and save you significant time and potential costly errors.
Read More: Islamic Inheritance Laws: What Expats Should Know in 2025
Conclusion
The UAE’s progressive legal updates have unequivocally answered the question: Can Expats Own 100% of a UAE Business? The answer is a resounding yes. The landscape is now more open and attractive than ever before. Your ability to do so hinges on selecting the right jurisdiction—Mainland, Free Zone, or Financial Centre—that aligns perfectly with your commercial goals and activities. By understanding the regulations, prioritizing compliance, and seeking expert guidance, you can confidently claim full ownership of your venture and tap into the immense potential of the UAE market.
Ready to secure your 100% business ownership in the UAE? Schedule a free, no-obligation consultation with our team of expert business setup consultants today. We’ll guide you through every step, ensuring your company formation is seamless, compliant, and optimized for success in 2025 and beyond.
Related FAQs - Can Expats Own 100% of a UAE Business
Q: Are there any industries where 100% foreign ownership is still not allowed?
A: Yes, although the “Positive List” is very extensive, certain strategic activities may still require majority UAE national ownership. These typically include sectors like oil and gas exploration, banking, insurance, and water and electricity provision. It’s best to check the latest Cabinet resolution for the definitive list.
Q: What is the difference between a Free Zone and Mainland company for tax purposes?
A: Both are subject to the UAE Corporate Tax law. However, Mainland companies are taxed on their worldwide income (with potential foreign tax credit). Many Free Zone companies can benefit from a 0% corporate tax rate on “qualifying income” if they meet certain conditions and do not conduct business with the UAE Mainland.
Q: Do I need a physical office space for a 100% owned business?
A: It depends on the jurisdiction and license type. Most Free Zones offer flexible options, including virtual offices or desk spaces, to meet the requirement. Mainland companies often require a physical lease agreement (an Ejari in Dubai) to process their license.
Q: Can a Free Zone company now operate freely in the Mainland market?
A: Not freely. A Free Zone company can only conduct business within its Free Zone or outside the UAE. To engage in commercial activities with the Mainland market, it typically must go through a registered local distributor, set up a separate Mainland branch, or apply for a permit for specific limited activities.
