Foreign investors can now own 100% of a Dubai mainland company without a local Emirati partner, for most business activities. This became legally possible on 1 June 2021, when Federal Decree-Law No. 26 of 2020 came into force and removed the longstanding 51% Emirati shareholder requirement from the UAE’s Commercial Companies Law (CCL). The more recent amendment (Federal Decree-Law No. 20 of 2025, issued October 2025 with key provisions taking effect January 2026) did not change that ownership percentage. It strengthened the corporate governance framework around it.
This guide explains what the law actually says, which sectors remain restricted, and how to correctly structure 100% foreign ownership in Dubai in 2026.
The Foundational Shift: What Changed in 2021
For decades, mainland UAE companies were required by law to have at least 51% of their share capital held by UAE nationals or entities wholly owned by UAE nationals. This rule was embedded in Article 10 of the Commercial Companies Law (Federal Law No. 2 of 2015) and was the single biggest legal barrier for foreign investors wanting full control of an onshore UAE business.
That changed fundamentally when Federal Decree-Law No. 26 of 2020, signed by the late President H.H. Sheikh Khalifa bin Zayed Al Nahyan in November 2020, amended Article 10 to remove the blanket 51% local ownership requirement. The change took effect 1 June 2021. Federal Decree-Law No. 32 of 2021 subsequently codified the full Commercial Companies Law, preserving and building on this reform.
Both the Dubai Department of Economy and Tourism (DET) and Abu Dhabi’s Department of Economic Development released lists of over 1,000 commercial activities open to 100% foreign ownership. The minimum share capital requirement was also confirmed not to apply to wholly foreign-owned companies beyond the standard statutory requirements.
Read more: Business Guide in Dubai: Expansion Opportunities for International Entrepreneurs
What the 2025 Amendment Changes (Effective 2026)
Federal Decree-Law No. 20 of 2025 was issued 1 October 2025 and took effect 15 October 2025, with certain provisions phased in over the following 12 to 24 months, making January 2026 the effective date for several of the most important changes. This amendment did not alter the foreign ownership percentages themselves; 100% foreign ownership was already established in 2021. What it did was modernise the corporate legal framework surrounding how foreign-owned companies operate, raise capital, and govern themselves.
Codification of the Dual-License Regime
Articles 3 and 5 of the CCL were revised to expressly recognise that companies incorporated in UAE free zones, including financial free zones like ADGM and DIFC, may establish branches and representative offices onshore if permitted by the relevant free zone legislation. The CCL now explicitly applies to their onshore presence. This codifies what had been an informal “dual licence” practice already developing in the market, giving it clear statutory authority.
For foreign investors, this means a free zone company can more confidently extend its reach to mainland UAE clients without needing to incorporate a completely separate onshore entity. The exact operational scope of dual-licensed entities still depends on the specific free zone’s rules and any implementing regulations to follow.
Re-Domiciliation Framework
New Article 15 creates a statutory process for companies to transfer their legal registration from one competent authority to another: between emirates, from mainland to free zone, or from free zone to mainland, without interrupting their legal personality, history, or existing contracts. This is a meaningful improvement. Previously, restructuring a company’s jurisdiction meant winding down one entity and incorporating a new one, with all the cost and disruption that entails.
Drag-Along and Tag-Along Rights in LLCs
Updated Article 14 gives statutory recognition, for the first time under UAE law, to drag-along and tag-along rights in limited liability companies. Before this amendment, investors relying on these mechanisms had to include them in private shareholder agreements, whose enforceability in UAE courts was uncertain. Companies can now embed these provisions directly into their constitutional documents (the Memorandum of Association), significantly strengthening shareholder protections and making UAE LLCs more familiar and attractive to international investors.
LLCs can now issue different classes of shares carrying different rights and privileges. Preferred equity structures, veto rights, and tiered governance arrangements that were previously difficult to implement in an LLC format are now available. For foreign investors structuring joint ventures or bringing in institutional capital, this is a significant expansion of flexibility.
Non-Profit Company Structure
The amendment introduces the non-profit company as a recognised corporate form under the CCL. Entities incorporated as non-profits may pursue social enterprise or philanthropic objectives, with all revenues directed toward the company’s stated purpose rather than distributed to shareholders. The detailed rules governing permitted purposes, regulatory oversight, and exemptions will be set out in a forthcoming Cabinet decision.
Deadlock Resolution Mechanism
When shareholders cannot agree on board appointments, the relevant emirate’s licensing authority can now appoint independent, non-shareholder directors for up to one year. This addresses a structural weakness in the prior regime and provides a practical resolution path for governance disputes without resorting to litigation.
Sectors Still Restricted for Foreign Investors
100% foreign ownership is not universal. Cabinet Resolution No. 55 of 2021 established the list of “strategic impact activities” that remain subject to ownership restrictions or require special approval from the relevant regulatory authority. The list, as defined in that resolution, includes:
- Security, defence, and military activities
- Banking, money exchange, finance companies, and insurance
- Currency printing
- Communications and telecommunications
- Hajj and Umra services
- Quran centres
- Services related to fish traps (the only category still requiring 100% UAE national ownership)
For all other strategic impact categories, the relevant regulatory authority determines what percentage of foreign ownership is permissible on a case-by-case basis. This means that foreign investment is not automatically prohibited in banking or telecoms, but it requires regulatory approval and is subject to conditions set by the Ministry of Economy, Central Bank, Telecommunications and Digital Government Regulatory Authority (TDRA), or other applicable authority.
Certain commercial activities have also historically been reserved for UAE nationals, including real estate brokerage services, commercial agency activities, and some labour supply services. Investors should verify their specific activity against the current DET-approved list before proceeding.
One important nuance: the Dubai International Financial Centre (DIFC) operates under a separate common law framework governed by its own courts and regulations. Financial services activities conducted within the DIFC are regulated by the Dubai Financial Services Authority (DFSA), not by the mainland UAE framework described above.
Three Ways to Structure 100% Foreign Ownership in Dubai
Investors have three main structural options, each suited to different business models and market access needs.
Option 1: Mainland LLC
A mainland limited liability company registered with the Dubai Department of Economy and Tourism can now be 100% foreign-owned for most commercial activities. It can operate freely throughout the UAE, bid on government contracts, and engage directly with local clients and suppliers without geographic restriction.
The trade-off: mainland companies are subject to UAE corporate tax at 9% on taxable income above AED 375,000 per financial year. There is no minimum share capital requirement beyond the standard statutory floor (which varies by activity). For many businesses targeting the UAE domestic market, the mainland LLC is now the most direct and flexible option.
Option 2: Free Zone Company
Free zones have always permitted 100% foreign ownership, well before the 2021 mainland reform. Dubai has more than 40 free zones, each structured around specific industry clusters. DMCC is the largest, covering commodities, trading, and general commerce. DIFC is the hub for financial services under an English common law framework. JAFZA serves logistics and manufacturing. Dubai Internet City and Dubai Silicon Oasis cater to technology and digital businesses.
Free zone companies that qualify as a “Qualifying Free Zone Person” (QFZP) under the UAE Corporate Tax Law can access a 0% tax rate on qualifying income. The dual-license codification in the 2025 amendment also makes it legally clearer for free zone companies to extend their onshore reach, though the operational details vary by free zone and will be further defined by implementing regulations.
The key limitation: free zone entities cannot, by default, directly trade with mainland UAE customers without either a local distributor or an additional mainland licence. For businesses whose primary market is export or international, this is usually not a constraint.
Read more: How to Start a Business in a Dubai Free Zone: A Complete Guide for International Investors
Option 3: Branch Office
A branch office is a direct extension of an existing foreign company, not a separate legal entity. It carries the same legal identity, liabilities, and obligations as the parent. The 2025 CCL amendment expressly brought branches and representative offices of free zone companies operating onshore within the scope of the CCL, providing clearer regulatory coherence.
Branch offices suit companies that want a legal presence in Dubai to test the market or service existing clients before committing to a fully independent incorporated entity. They are typically simpler to establish but offer less structural flexibility than a standalone LLC.
Mainland vs Free Zone: A Practical Comparison
| Factor | Mainland LLC | Free Zone | Branch Office |
|---|---|---|---|
| Foreign ownership | 100% (most activities) | 100% (always available) | 100% (via parent) |
| Operating area | All UAE | Free zone + export; mainland requires additional licence | UAE (limited to parent’s activities) |
| Corporate tax | 9% above AED 375,000 | 0% if QFZP qualifying; 9% otherwise | Depends on activities |
| Setup speed | Moderate | Generally faster | Moderate to slow |
| Government contracts | Yes | Generally no | Limited |
| Best for | Businesses targeting the UAE domestic market | Export-oriented or international businesses | Market testing or existing company expansion |
This table reflects general principles. Specific tax treatment, capital requirements, and licensing conditions vary by activity, chosen free zone, and individual circumstances. Verify with a qualified advisor before committing to a structure.
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How to Correctly Structure 100% Ownership: Key Practical Steps
Getting the structure right from the start avoids costly restructuring later. Here is the general process:
- Verify your business activity. Confirm that your intended commercial activity is not on the strategic impact list (Cabinet Resolution No. 55 of 2021) and is included on the DET’s list of activities open to 100% foreign ownership. If your activity sits in a grey area, seek a formal legal opinion before proceeding.
- Choose your jurisdiction and structure. Decide between mainland LLC, free zone, or branch office based on your target market, tax position, and operational needs. If you need to serve mainland UAE clients directly, mainland or dual-license is the cleaner path.
- Reserve a trade name. Submit a name reservation application through DET (for mainland) or the relevant free zone authority. Names must comply with UAE naming conventions and cannot include prohibited terms or references that conflict with public order or religion.
- Draft and notarise constitutional documents. For a mainland LLC, the Memorandum of Association (MOA) must be notarised. Following the 2025 amendment, you can now include provisions for drag-along and tag-along rights and multi-class shares directly in the MOA. Consider taking advantage of these if relevant to your investor structure.
- Apply for your business licence. Submit the application to DET or the free zone authority along with required documents: passport copies of all shareholders and directors, proof of address, application form, and activity specification. Some free zones accept applications entirely online.
- Establish a corporate bank account. UAE banks apply thorough due diligence to foreign-owned companies. Prepare a detailed business plan, source of funds documentation, and complete corporate records. Expect the banking process to take several weeks and plan accordingly.
- Arrange visas and residence permits. Shareholders and employees will need UAE residence visas sponsored by the company. The number of visas a company can sponsor is linked to its office space and licence type. Plan visa requirements as part of your setup budget.
Total setup timelines range from a few days for some free zones to several weeks for more complex mainland structures. These timelines do not include the bank account opening process, which is often the longest step.
For investors based in Indonesia or elsewhere in Southeast Asia, the Dubai company registration service from vOffice can guide you through structure selection, document preparation, and the incorporation process without needing to be physically present in Dubai for most steps.
Read more: Dubai Tax Regulations: What Businesses Need to Know
Frequently Asked Questions
Can a foreign investor really own 100% of a Dubai mainland company in 2026?
Yes, for the vast majority of commercial activities. This has been legally possible since 1 June 2021 under Federal Decree-Law No. 26 of 2020, which removed the mandatory 51% Emirati shareholder requirement from the Commercial Companies Law. Exceptions apply to sectors listed as strategic impact activities in Cabinet Resolution No. 55 of 2021, including banking, defence, and telecoms.
Which sectors still require an Emirati partner or have foreign ownership restrictions?
Cabinet Resolution No. 55 of 2021 identifies these strategic impact categories: security, defence, and military activities; banking, money exchange, finance companies, and insurance; currency printing; telecommunications; Hajj and Umra services; Quran centres; and fish trap services. Services related to fish traps are the only category still requiring 100% UAE national ownership. For all other restricted sectors, the relevant regulatory authority determines permitted foreign ownership levels on a case-by-case basis.
What specifically changed in 2026 under the CCL amendment?
Federal Decree-Law No. 20 of 2025, with provisions effective from January 2026, codified the dual-license regime allowing free zone companies to operate onshore, introduced a statutory re-domiciliation process enabling companies to migrate between jurisdictions without losing their legal identity, added explicit recognition of drag-along and tag-along rights in LLCs, permitted multiple share classes in LLCs, and introduced a formal non-profit company structure. The 100% foreign ownership rule itself dates from 2021. The 2025 amendment is about what you can do with that company once it exists.
What is the difference between a free zone and mainland company in Dubai?
A mainland company can operate throughout the UAE and engage with government clients. A free zone company has always offered 100% foreign ownership but is traditionally limited to operating within its free zone or internationally. Trade with mainland UAE clients generally requires a distributor or additional licence. The 2025 CCL amendment formalised the dual-license path, making it easier for free zone companies to extend their onshore reach.
Does the UAE’s 9% corporate tax apply to free zone companies owned by foreigners?
Not necessarily. A free zone company that qualifies as a “Qualifying Free Zone Person” (QFZP) under the UAE Corporate Tax Law can apply a 0% tax rate to qualifying income. However, if the company derives income from mainland UAE activities or fails to meet QFZP conditions, the 9% standard rate applies. The precise tax treatment depends on the company’s specific activities and structure. Consult a UAE-registered tax advisor to confirm your position.
Is physical presence in Dubai required to incorporate a company there?
Requirements vary. Many free zones allow most of the incorporation process to be completed remotely. However, corporate bank account opening almost always requires in-person identity verification at a UAE bank branch. Shareholders should factor in at least one visit to Dubai for banking purposes, even if the corporate registration itself can be handled remotely or through an authorised agent.
How does the new re-domiciliation framework benefit existing investors?
Before the 2025 amendment, moving a company from one UAE jurisdiction to another, say from a free zone to the mainland, effectively required dissolving the old entity and incorporating a new one. Article 15 of the amended CCL now provides a statutory process for transferring registration while preserving the company’s legal identity, contracts, and history. For investors who set up in a free zone initially and later want mainland access as their business grows, this significantly reduces the cost and disruption of restructuring.
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References
1. UAE Government Official Portal. (2021). Full foreign ownership of commercial companies. UAE Government. Retrieved from
https://u.ae/en/information-and-services/business/doing-business-on-the-mainland/full-foreign-ownership-of-commercial-companies
2. UAE Legislation Portal. (2021). Cabinet Resolution No. 55 of 2021 on the Determination of the List of Activities with a Strategic Impact. Retrieved from
https://uaelegislation.gov.ae/en/legislations/1520
3. Gibson Dunn. (2025, December 17). Recent Amendments to the UAE Commercial Companies Law. Gibson Dunn Client Alert. Retrieved from
4. Cleary Gottlieb. (2025, December 18). UAE Companies Law Update 2025: Multiple Share Classes and Other Modernized Tools for Investments and Exits. Retrieved from
https://www.clearygottlieb.com/news-and-insights/publication-listing/uae-companies-law-update-2025
5. Reed Smith. (2026, January 15). UAE Commercial Companies Law: Key changes and what they mean for business. Retrieved from
https://www.reedsmith.com/articles/uae-commercial-companies-law-key-changes-and-what-they-mean-for-business/
6. Norton Rose Fulbright. (2025). Key amendments to the UAE Commercial Companies Law and their practical impact. Retrieved from
https://www.nortonrosefulbright.com/en/knowledge/publications/b1b71a5e/key-amendments-to-the-uae-commercial-companies-law-and-their-practical-impact
7. National Law Review. (2026, January 9). New UAE Corporate Law Update: Federal Decree-Law No. (20) of 2025. Retrieved from
https://natlawreview.com/article/new-uae-corporate-law-update-federal-decree-law-no-20-2025-amending-federal-decree
