Can I own 100% of the company as a foreign investor?

The business setup landscape in 2026 has changed vastly since I established Kiltons Business Setup Services in 1999. The visionary policymakers have been quick to identify changing concepts, necessities to cope with rapid globalization, and the enhancements required to remain one of the top global business destinations.

Mainland Jurisdiction – Companies established in the UAE mainland can trade freely in the local markets as well as internationally. You can form a Mainland Company:

o   Under 100% foreign investment in most of the commercial, industrial, and professional sectors.

o   A few sensitive and strategic sectors such as defence and telecommunications still do not allow 100% foreign ownership. An Emirati sponsor or additional approvals are mandatory for company formation in the subject fields.

o   No need to find a local sponsor or hand over 51% of shares when you set up a business that allows 100% foreign investment.

Freezone Jurisdiction – There are free zones designed exclusively for some sectors and those suited for multiple business activities. A free zone entity can have 100% foreign ownership by default.

o   100% foreign ownership by default.

o   Best option to set up a business in the UAE without a local sponsor.

o   Trade inside the jurisdiction and B2B in the UAE as well as internationally.

A paradigm shift occurred in the business environment after the amendments allowing 100% foreign ownership in mainland businesses in the UAE. The move has eliminated apprehensions about foreign investment and has considerably transformed the investment scenario.  Here we will look at how the amended regulations work, aspects you must understand, and the step-by-step process for business setup in the UAE.

Federal Law 26/2020 has been the fundamental element behind the tectonic shift. It has introduced decisive amendments to the Commercial Companies Law of 2015.  

Consequent to Decree 26 of 2020, the amendments to investment policy came into effect in June 2021. The mandatory requirement for an Emirati sponsor, who would hold 51% of the shares, was removed for commercial and industrial business activities. More than 1,000 business activities in the UAE Mainland jurisdiction are presently free from local partnership requirements. The globally renowned business destinations, Dubai and Abu Dhabi, have been proactive in implementing the amended regulations.

On the other hand, free zones in the UAE have already been offering 100% foreign ownership. Entities focusing on international trade, exploring the advanced infrastructure, investor-friendly regulations, and diverse business spectrum have already been forming companies in UAE free zones. Nevertheless, the possibility of 100% foreign ownership in the mainland jurisdiction has offered flexibility for investments.

A wise decision based on an elaborate analysis is crucial in every field. Business is not different either. Understanding the key aspects of a business setup in the mainland and freezone jurisdictions before making a decision. It would help in establishing a successful business empire.  

Free zones are more suitable if you are planning a quick and budget-friendly business setup with 100% foreign ownership. Drop us a message if you want a free consultation regarding business setup in the UAE.

Strategically crucial business activities that can affect national security have been excluded from 100% foreign ownership. Permitting foreigners to own 100% shares in these activities can be detrimental to the country’s sovereign stability. These activities are termed “Strategic Impact Activities”.  

Foreigners generally cannot have 100% ownership in the following Strategic Impact Activities in the UAE. Ownership can be obtained after acquiring bespoke government approval.

• Defence: Business activities related to the defence sector cannot be operated by foreigners independently. Business operations such as weapon manufacturing, spares for military aviation, professional support for military systems, security services, and repair services for military equipment are not allowed under 100% foreign ownership owing to obvious reasons.
• Telecommunications: Telecommunications are the mouth and ear of a country. Any intrusion into the subject system can create havoc and lead to lethal security issues. Enemy states can exploit the situation and may try to destabilize the country. Hence, business activities in the telecom sector, including network operations, critical digital communication systems, and digital telecom infrastructure, are not permitted under 100% foreign ownership.
• Banking and Financial Institutions: Banking, insurance, finance, and currency exchange operations cannot be wholly owned by a foreigner.
• Utility Sectors: Utility sectors such as water, electricity generation and distribution, and oil & gas are the lifeline of the UAE. Company formation in the utility sector necessitates local sponsorship or bespoke government approvals.

Here are some of the key advantages of a business setup under 100% foreign ownership:

• No Complex Agreements: You will own 100% of the property and profits. No need for a complicated agreement detailing authority and asset ownership.
• Own and Control: You are free to make decisions and control the company completely. Go ahead with decisions on policy changes, appointment to key positions, operational decisions, expansions, and profit distribution without any external pressure.
• Repatriate Capital: A foreign investor is free to repatriate capital and profit to their home country. No currency regulations or restrictions in this regard. The profits can be reallocated for company expansion or investment in new sectors.
• Credible Identity: The UAE has been a globally recognized business destination. A business in famed commercial hubs such as Dubai and Abu Dhabi creates a strong identity for the entity. The credibility thus earned will fuel future growth.
• Golden Visa: The UAE has launched a 10-year Golden Visa that allows residence for 10 years and multiple entries. High-value investors can get the Golden Visa if required.

The steps for business setup in the UAE under 100% foreign ownership are:

• Identify the business activities
• Choose the jurisdiction
• Obtain initial approval and register the trade name
• Finalize the legal structure and license type
• Prepare the required documents
• Lease office/commercial space
• Obtain additional approvals if required
• Apply for a trade license
• Pay the license fee
• Receive the trade license
• Open a corporate bank account
• Obtain visas for the investors and employees
• Start business operations

A trade license is not the end of compliance requirements. There are compliance requirements that companies in the UAE must comply with. Three key compliance requirements are:

License Renewal: A trade license in the UAE is issued for 12 months. The license must be renewed annually. Renewal of Ejari, lease agreement, and external approvals (if any) also must be undertaken before initiating the trade license renewal. Standard minimum validity of the license is 12 months. However, there is an option to get the license registered for multiple years.

Corporate Tax: Mainland companies are subject to 9% corporate tax on net profits above AED 375,000. Freezone entities with QFZP status can claim a tax rebate and need not pay corporate tax. However, the company must adhere to the strict regulations to remain in 0% corporate tax status. Both the mainland and freezone companies must register for corporate tax in FTA.

UBO Registry: The Ultimate Beneficial Owner (UBO) registry must be maintained meticulously. The details of the person (not a corporate entity) must be submitted to the authorities. Changes in the UBO must be reported within 15 days.

Kiltons Business Setup Services can help you with business setup in 100% ownership. We focus on delivering the best support. Because each of our clients has been our brand ambassador. Beginning as a small firm in 1999, we have expanded to business operations across the UAE with the wholehearted support of our clients.

Contact Kiltons now. Let’s get the ball rolling.