100% Foreign Ownership in Dubai, UAE

Honestly, the idea of needing a local partner to hold 51% of your business can feel discouraging. It is tough to imagine starting something of your own and ending up sharing its ownership simply because it is a legal requirement. But the UAE government recognized this challenge and responded with a game-changing move, allowing 100% foreign ownership UAE for investors and entrepreneurs worldwide for almost every sector.

Foreign entrepreneurs in UAE, including Dubai, can enjoy full control and freedom to operate their businesses independently, both in free zones and on the mainland. This is one of the key reasons why the UAE has become such an attractive destination for global business.

In this article, let us explore 100% foreign business ownership rights in UAE, what are the new rules around it and how it benefits both entrepreneurs and the UAE economy. We will also look at the process of starting a business with 100% foreign ownership in Dubai, UAE. Let us begin.

What is 100% foreign ownership UAE?

Foreign entrepreneurs looking to start a business in Dubai or elsewhere in the UAE can now enjoy 100% ownership of their company. This means that, for most industries, there is no longer a legal requirement to have a UAE national as a partner in the business.

While free zones in UAE have always offered the benefit of 100% foreign ownership, recent legal reforms have extended this advantage to mainland companies as well. As a result, foreign investors can now fully own and operate businesses across much of the UAE without the need for a local sponsor.

If need be, for example in case of foreign company branch or sole establishment, businesses may need to engage a Local Service Agent, who basically helps with licensing, administration, and legal formalities, without taking any share in the company. You still retain full control and ownership.

100% foreign ownership on UAE mainland – new rules

Previously, on the mainland, expatriates were restricted to owning only 49% of a business, while the remaining 51% had to be held by a local sponsor. Only a few professional service activities and businesses in free zones allowed 100% foreign ownership. On mainland, you had to search for a reliable sponsor, either a UAE national or a company owned by one. This was a major part of UAE’s commercial law.

However, there major update was introduced in around 2020. Foreigners, since then, have been allowed to establish companies with 100% ownership, based on the provisions of Federal Decree-Law No. 26 of 2020, which amended the provisions of Federal Law No. 2 of 2015 on Commercial Companies.

As a result, foreign entrepreneurs and investors now enjoy much greater freedom. The ownership restrictions have been lifted for most business activities on the mainland, and foreigners can now establish companies in the UAE mainland without the need for a local sponsor.

100% foreign business ownership in different Emirates of UAE

Each Emirate in UAE has its own list of business activities that allow 100% foreign business ownership:

100% foreign ownership activities in Dubai:

The Dubai Economic Department and Tourism (DET) has its own guidelines that allow 100% ownership in Dubai mainland for over 1,000 commercial and industrial activities. This includes many sectors such as manufacturing, trading, retail, hospitality, services, and technology companies. Freezones allow 100% ownership as well.

However, some strategic sectors, such as oil exploration, military-related activities, and certain banking and financial services, still require local shareholding.

100% foreign ownership activities in Abu Dhabi:

According to the Department of Economic Development (DED) of Abu Dhabi, for over 1,105 registered commercial and industrial activities, any foreign natural or legal person can establish a 100% foreign-owned company.

It aims to attract foreign direct investment (FDI) and promote a competitive business environment in the emirate of Abu Dhabi.

100% foreign ownership activities in other Emirates:

Recently, other emirates including Ajman and Sharjah have also approved 100% foreign ownership for most of the economic activities. However, some strategic sectors still remain dependent on local sponsorship.

Which activities allow 100% foreign business ownership in UAE?

There are many activities that offer 100% ownership in UAE, both in freezones and mainland. Although the list is extensive, few of them are as follows:

• Cosmetics
• Perfumes
• General trading
• Consulting
• Food & beverages
• E-commerce
• Education
• Digital marketing
• Fashion & apparel
• Cleaning services
• Accounting firm
• Import/export

How to start a 100% foreign-owned business in Dubai

Here are the steps to start a business with 100% foreign ownership in Dubai:

Step 1. Choose a business activity:

Many business activities in Dubai can be started by foreign entrepreneurs without relying on a local sponsor. These can include cosmetics, fashion, healthcare, education, IT, tech, and many more.

However, remember that some strategic sectors like oil, weapons, or certain financial services may still require a local sponsor. So, you need to check and select an activity that is permitted for 100% foreign ownership UAE.

Step 2. Decide the location:

Free zones in the UAE have always offered 100% ownership. And now, according to the amendments made in the UAE Commercial Companies Law, the mainland also offers the same benefits for many sectors. So, you must decide where you want to start the business. Each jurisdiction has its own benefits, features, and setup costs, which you should carefully consider.

Step 3. Choose the legal structure:

The legal structure of your business determines the tax requirements, ownership pattern, and overall functioning of the business. You can start a limited liability company (LLC), sole establishment, partnership firm, civil company, or a branch of an existing GCC/foreign company.

• LLCs in the UAE can enjoy 100% ownership for most activities with no need for a local sponsor.
• For sole establishments, a Local Service Agent (LSA) may be needed. However, LSAs do not take any ownership stake, they only assist with administrative processes.

Step 4. Reserve a trade name:

Next, choose a name suitable for your business and get it registered. The name you select must comply with UAE trade name regulations. It should not already be taken by another business, make sure to check for availability before submission.

Step 5. Get the initial approval:

Obtain the No Objection Certificate (NOC) for your business from the Department of Economic Development (DED) or the respective free zone authority. This NOC is essentially the first permission required to start a business in the UAE.

Step 6. Get additional approvals:

Some business activities require approvals from specific government bodies such as the RTA, Dubai Healthcare Authority, and others. For example, if you are starting a limousine business, you will need RTA permits for your vehicles, drivers and operations.

Step 7. Finalize office space:

Dubai is known for its stunning infrastructure and the office facilities here will amaze you. They are packed with features and are located at typically high footfall areas. The size and nature of the office space will depend on the scale and nature of your business. For rented spaces, you will need to register a lease agreement.

Step 8. Apply for the license:

Now that you have all the approvals, you can approach the authority and apply for the business license. The license on the mainland is issued by the DET. In freezones, the respective freezone authority will issue the license. Here are the steps included:

• Fill out license application form.
• Attach the necessary documents.
• Pay the license fees.
• Submit the request.
• Await approval and finally collect your license.

Step 9. Apply for the visa:

As a foreigner, you will need to have a residence permit to stay and conduct business operations legally in the UAE. Therefore, you must apply for your visa. Once approved, you can also sponsor visas for your staff and eventually for your family members.

Step 10. Open a business bank account:

For financial and business transactions, you will need to open a business bank account in the UAE. Personal accounts cannot be used for business purposes. The process can be a bit overwhelming for foreigners, but experts at Dubiz can guide you through it from start to finish.

Benefits of 100% foreign ownership UAE for entrepreneurs

Entrepreneurs are the main entities who can benefit the most from 100% ownership in the UAE. For them, it means more freedom, more control, and better authority over their business decisions.

Here are the benefits of 100% foreign ownership in Dubai for entrepreneurs:

• More freedom: You do not need to share your ownership with any local sponsor. What you started will remain fully yours.
• No conflicts: No chances of conflict or disputes with a local national partner.
• Quick decisions: You can take quicker and more controlled decisions for your business.
• Cost reduction: No need to pay fees or shares to local sponsor.
• Business flexibility: You can sell, restructure or expand your business as per your own choice.
• Full profit retention: Keep 100% of your hard-earned business profits.
• Ease of business: Removal of sponsorship needs further simplifies the process of business setup in UAE.

Importance of 100% foreign ownership UAE for nation

By introducing 100% ownership rights for foreign entrepreneurs in most sectors, the UAE has paved the way for further growth of the nation. The UAE economy, which was already attractive to investors, businesses, startups and talented professionals, has further enhanced its appeal through this initiative.

Here are the benefits of 100% foreign ownership for the UAE’s economy:

• Increased FDI: Investors are more encouraged to set up businesses in the UAE.
• Boost to entrepreneurship: Startups, innovative companies, and tech firms are more willing to launch in the UAE.
• Industry development: Sectors like technology, healthcare, education, and renewable energy have become more active.
• Job creation: New businesses create more job opportunities for both UAE nationals and foreigners.
• Global competitiveness: Enhances the UAE’s position as a leading global business hub.
• Ease of doing business: Simplified business setup processes and reduced bureaucratic hurdles make the UAE a more attractive investment destination.

Cost of business license with 100% foreign ownership in Dubai

You can pay as low as AED 5,999* to start your 100% foreign owned business on freezone in UAE. The business setup cost can change based on your chosen jurisdiction, nature of business license, and other factors.

Final words

With the availability of 100% foreign ownership, the UAE has undoubtedly become more popular and a preferred choice for business establishment. Naturally, the removal of the foreign ownership restrictions UAE has made the overall process of company formation easier and faster for investors.

Starting a business in Dubai not only offers 100% ownership but also provides access to a tax-free environment, advanced infrastructure, a multi-skilled workforce and an affluent economy.

To start such a business, you just need to follow the legal procedures and obtain the required permits and licenses. For a smoother experience, you can consult our experts at Dubiz Business Setup, they can take over the process.

Start a 100% owned company in UAE with Dubiz

Dubiz Business Setup has been helping entrepreneurs start a wide variety of businesses in the UAE for over 8 years. Our specialized and qualified team includes PROs, legal experts, tax advisors, and accounting professionals who handle all aspects of company formation and compliance requirements across the UAE.

We have helped over 7,000+ brands find success in the UAE and we would be pleased to help you next.

Get:

• End-to-end licensing and registration support
• Visa and immigration assistance
• Golden Visa services
• Business bank account opening
• VAT and tax compliance services
• Expert document clearance
• Business center solutions
• Faster and transparent processes
• No hidden costs
• Customized packages for mainland, free zone, and offshore setups

Start your 100% ownership company in Dubai today, contact us:

📞 Call: ‪+971 563695485

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📧 Email: info@dubiz.co

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