Key Takeaways
- For most mainland activities, a UAE national no longer has to own 51%. Federal Decree-Law 26 of 2020 scrapped that rule, and it stopped applying from 1 June 2021 (Dubai Media Office).
- Under the Commercial Companies Law (Federal Decree-Law 32 of 2021, in force 2 January 2022) there are five company forms, and an LLC has no minimum capital set by law.
- Cabinet Resolution 55 of 2021 sets apart seven groups of sensitive activities, banking, telecoms and defence among them. In those areas the sector regulator decides how much a foreigner may own.
- Federal Decree-Law 20 of 2025, issued in October 2025, changed 15 articles. One law firm reads it as bringing the onshore branch or office of a free zone company under the law.
- Whether you can own all of your company depends on your exact activity. The answer that counts is the licensing authority's written reply about your activity code.
Most foreign founders planning a company on the UAE mainland, meaning anywhere outside a free zone, start with one question. Do they need a local partner holding 51%? For most activities they don't. That rule ended on 1 June 2021. What's left of it is spread across the Commercial Companies Law, a short Cabinet list and the activity code that will be printed on your trade licence.
100% foreign ownership since 1 June 2021
Federal Decree-Law 26 of 2020 dropped the requirement for UAE nationals to hold 51% of most mainland companies. It took effect on 1 June 2021.
Two days later, on 3 June 2021, Dubai's licensing department explained what this meant in practice. That department is now the Department of Economy and Tourism (DET, formerly DED). More than 1,000 commercial and industrial activities were open to full foreign ownership, with no extra fees, guarantees or capital (Dubai Media Office, 3 June 2021).
The same release said an Emirati partner or a fixed Emirati share was no longer compulsory. Existing licences with an Emirati partner stayed as they were unless the partner chose to leave. One thing an LLC couldn't do was turn into a sole proprietorship in a foreign owner's name. It could, however, move its licence to a one-person LLC.
The Commercial Companies Law and what it still requires
The Commercial Companies Law (CCL) is Federal Decree-Law 32 of 2021. It has applied since 2 January 2022, and the Ministry of Economy and Tourism publishes the text. Article 9 allows five company forms: joint liability company, limited partnership, limited liability company (LLC), public joint stock company and private joint stock company. A company set up in any other form is "null and void". Federal Decree-Law 20 of 2025 rewrote Articles 8, 9 and 76. It kept the five forms, single ownership and the capital rule explained below.
You can own a company on your own. Article 8(3)(a) allows a company with one owner, and Article 71(2) lets a single natural or juristic person own all of an LLC. A juristic person is a legal body such as another company. Article 72 says the name must then include the words "Limited Liability (Sole Proprietorship)". An LLC with more than one owner has between two and 50 partners (Article 71(1)).
The law doesn't fix a minimum capital. Article 76 only asks for "sufficient capital", paid in full when the company is set up. It also lets the Cabinet set a minimum by decision. Nowhere in the 2021 text is there a clause that UAE nationals must hold a majority.
Limits can still come in another way, through powers the law hands to others. Article 10 leaves activities of national importance to the Cabinet. It also lets each licensing authority set a percentage that UAE nationals must hold in companies it licenses (Article 10(3)). That's why the answer can change from one activity to the next and from one emirate to another.
Activities with strategic impact
The activities that stay outside full foreign ownership are listed in Cabinet Resolution 55 of 2021. On its Promising Sectors page (2026), the Ministry of Economy and Tourism (MoET) calls them "excluded from obtaining 100% ownership by foreign investors". Law firms Clyde & Co and Afridi & Angell give 1 June 2021 as the start date in their briefings. MoET's summary names seven groups, each with the authority that oversees it:
- security, defence and activities of a military nature, under the Ministry of Defence or the Ministry of Interior;
- banks, exchange houses, finance companies and insurance, under the Central Bank;
- printing currency, under the Central Bank;
- telecommunications, under the Telecommunications and Digital Government Regulatory Authority (TDRA);
- Hajj and Umrah services, under the General Authority of Islamic Affairs and Endowments;
- centres for memorising the Holy Quran, under the same authority;
- services related to fisheries, which must be 100% Emirati owned.
If your activity is on the list, you apply through the economic department of your emirate. Once your papers are complete, the department passes them to the regulator within 5 working days. The regulator then has 14 working days to decide. It either approves, with a minimum Emirati share and other conditions, or it refuses (MoET, 2026).
Abu Dhabi's Department of Economic Development (ADDED) has a longer, more detailed list. Afridi & Angell reported in July 2021 that Administrative Decision 320 of 2021 names 85 strategic-impact activities. Outside those, any share of foreign ownership is allowed. That report dates from 2021, and the national list is the Cabinet's to change, so the current versions are worth confirming with the licensing authority.
Commercial agencies and regulated sectors
A commercial agency is an arrangement where a local agent sells or distributes a foreign company's products in the UAE. These agencies were left out of the open-ownership rules and still fall under the Commercial Agencies Law (Dubai Media Office, 3 June 2021). The same release said branches of foreign companies in Dubai don't need an Emirati agent.
Owning a company and being allowed to run its activity are two different things. A sector regulator can demand its own licence even when you may own every share. Examples are the Central Bank, the TDRA and Dubai's Virtual Assets Regulatory Authority. In Dubai, Executive Council Resolution 5 of 2024 lets DET issue the trade licence first. The regulator's permits must then be in place before the activity starts.
What about a local service agent, a UAE national who handles government paperwork for a fee but owns no shares? The 2021 text of the CCL says nothing about them. Any such condition comes from the licensing authority, and two pages on the government portal u.ae disagree.
One is the guide to starting a mainland business (16 July 2026). It says a business owned entirely by residents of countries outside the Gulf Cooperation Council (GCC) needs a local service agent, with the agreement attested by a notary public or the court. The other is the foreign ownership page (updated 6 April 2026). It says the 51 per cent Emirati ownership or local agent requirement was removed for most activities, and that branches no longer need an Emirati service agent. Your licensing authority is the one to settle whether your activity code comes with an agent condition, and what the agent contract may contain.
Setup advisers say founders are sometimes offered a "local partner" deal with a side letter, a private extra agreement that gives the partner control or a cut of the profit. It tends to be presented as routine.
The companies law has no place for hidden nominee shareholdings, where someone holds shares on paper for another person. The disclosure rules go the other way. A company has to record its beneficial owner, the real person at the top who owns or controls it, usually anyone with 25% or more. That record goes to the registrar within 60 days of licensing (Cabinet Decision 109 of 2023, as of October 2026).
Banks look at the same facts. In the Central Bank's guidance on customer due diligence (the checks banks run on new clients), nominee shareholders appear as a red flag. That's in the version listed as in force from 7 November 2025. A side letter can therefore cost you both control of your company and your bank account. To see how banks read ownership, look at the page on why bank accounts are declined.
Free zone companies and the Commercial Companies Law
A free zone company is a UAE company too. Article 9(3) of the CCL, as amended by Federal Decree-Law 20 of 2025, gives UAE nationality to every company incorporated in the country, including those in a free zone or a financial free zone. Under Article 5 of the 2021 text, the CCL stays out of a free zone company's affairs where the zone's own law covers them. It does apply where that law allows the company to work outside the zone.
The 2025 amendment, issued in October 2025, moved things on. A MoET press release of 6 January 2026 describes 15 amended articles and one new one. Baker McKenzie's alert from December 2025 reads the changes this way. A free zone company that's allowed to work on the mainland does so through a branch or a representative office, and that branch or office falls under the CCL.
The second change is re-domiciliation, which means moving a company's registration from one place to another. According to the same alert, a company can move its register entry between a free zone and the mainland without forming a new legal entity, as long as both authorities agree.
How much a foreigner may own inside a free zone depends on that zone's own regulations. In Dubai, a free zone company can also trade on the mainland through a branch or a six-month permit (Executive Council Resolution 11 of 2025). For more on that option, see the guide to mainland versus free zone.
Out-of-date advice on the 51% sponsor and AED 300,000 capital
You'll still find web pages describing a UAE sponsor who holds 51%. They were written before 1 June 2021. For most activities that rule is gone, and nothing in the 2021 law brings it back.
The same goes for capital of AED 300,000, which doesn't appear in the 2021 text. Article 76 asks for enough capital for what the company does, paid in full. The money goes into a UAE bank, which only releases it once the company shows proof of registration.
Does a quote or a website present either figure as a legal requirement today? Look at when it was written, and ask whoever is selling the service which article or resolution they're relying on. The guide to the LLC in the UAE explains how an LLC is set up under the current law.
How to confirm your activity
What you may own is decided by the licensing authority's list of activities. In Dubai, that list is reached through Invest in Dubai and DET. In Abu Dhabi it's TAMM, the government services platform. At federal level, MoET offers company set-up through its Basher service.
Send the authority these questions in writing. The replies tell you what percentage you can own and whether an approval or an agent condition applies:
- What percentage of ownership does my activity code allow a foreign shareholder?
- Do I need a regulator's approval before the licence is issued, or before I start trading?
- Is there any condition on an agent, Emirati participation or local presence for this activity?
A lawyer licensed in the UAE can send those questions for you and check the authority's reply against the Cabinet list.
Living abroad? The full sequence of steps is in setting up a UAE company from abroad. For licensing in Dubai specifically, read the guide to the trade licence in Dubai.
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