Can Foreigners Own 100% of a Business in the UAE?
Yes. Under Federal Decree Law No. 26 of 2020, as codified in the UAE Commercial Companies Law (Federal Decree Law No. 32 of 2021), foreign investors can own 100% of most mainland companies without an Emirati partner or local service agent. Free zone companies have always permitted full foreign ownership. A limited number of activities are classified as having strategic impact and are subject to specific regulatory approvals, ownership requirements or other conditions. Services associated with fisheries are reserved for 100% UAE national ownership.
What changed under the UAE Commercial Companies Law
Before the 2021 amendment, most mainland limited liability companies needed a UAE national to hold at least 51% of the shares, or a local service agent (LSA) for professional licenses. The amendment removed the default 51% Emirati ownership requirement for commercial and industrial activities and eliminated the LSA requirement for branches of foreign entities. However, certain professional activities or legal forms may still have specific local service agent or other regulatory requirements, depending on the emirate and licensing authority. Foreign ownership is generally permitted across economic activities, subject to the requirements of the relevant local licensing authority and the restrictions applicable to activities of strategic impact. Eligibility, licensing requirements and any additional approvals should therefore be checked for the specific activity and emirate before incorporation.
Because licensing requirements can vary by activity, emirate and regulatory authority, the applicable ownership, approval and licensing requirements should be verified for the specific business activity before incorporation. A consultant checks the applicable ownership, licensing and activity requirements with the relevant authority before any paperwork starts, so it is worth confirming directly with the relevant DED or your consultant rather than assuming ownership rules are identical everywhere.
Which activities have foreign ownership restrictions?
Activities classified as having strategic impact are subject to specific regulatory approvals and requirements. The current strategic-impact categories include:
- Security and defence activities and activities that are military in nature
- Banking, exchange companies, financing companies and insurance activities
- Banking, exchange companies, financing companies and insurance activities
- Telecommunications
- Hajj and Umrah services
- Holy Quran memorisation centres
- Services associated with fisheries
Foreign investors may participate in strategic-impact activities subject to approval by the relevant regulatory authority and the applicable ownership, governance and licensing requirements. Services associated with fisheries are reserved for 100% UAE national ownership.
What Does a Business Setup Consultant in the UAE Actually Do
A licensed consultant is not just a paperwork filer. Their value is knowing which jurisdiction, activity code and structure will actually get approved on the first submission, and managing the multiple government touchpoints a foreign investor cannot easily navigate remotely.
Licensing and DED/free zone registration
This covers activity selection and coding, trade name reservation, initial approval, drafting the Memorandum of Association or free zone equivalent, and submitting the full application to the relevant mainland licensing authority or the chosen free zone authority until the trade license is issued.
Visa and PRO services
A Public Relations Officer (PRO) handles entry permits, status change, medical fitness testing, Emirates ID biometrics, and residence visa stamping for the investor and any employees, dependants or domestic staff. This is typically the most time consuming part of setup for someone unfamiliar with UAE government portals.
Bank account assistance
UAE banks apply strict know your customer checks on new corporate accounts, and a foreign owned company with no UAE trading history can face lengthy due diligence or rejection. Consultants prepare the business plan, source of funds documentation and shareholder
KYC file in the format banks expect, and in many cases introduce the client directly to a relationship manager.
Ongoing compliance (VAT, corporate tax, Emiratization)
Once licensed, a company has recurring obligations: VAT registration and periodic VAT return filing where the business is required to register, with the applicable filing period determined by the Federal Tax Authority, corporate tax registration and annual filing with the Federal Tax Authority, and, for private sector establishments that fall within the applicable Emiratisation requirements, obligations to employ UAE nationals in accordance with the applicable targets or pay the prescribed financial contribution for non compliance. Many consultants offer this as a retained compliance service after the initial setup is complete.
Mainland vs Free Zone vs Offshore: Which Is Right for You
A mainland company is licensed through the emirate's Department of Economic Development and can trade directly with the UAE local market, government entities and other mainland companies without restriction. Mainland companies generally require business premises that meet the requirements of the relevant emirate and licensing authority, with Ejari registration applicable in Dubai where required. Mainland companies are subject to UAE Corporate Tax, while Emiratisation obligations apply where the applicable workforce and regulatory criteria are met.
Free zone company (100% ownership, sector-specific zones)
Free zones are purpose built jurisdictions, each with its own regulator, fee schedule and permitted activity list, generally organised around a sector such as media, technology, logistics or financial services. Free zone companies enjoy 100% foreign ownership by default and can qualify for 0% corporate tax on qualifying income, but access to the UAE mainland market depends on the nature of the activity and the applicable licensing, regulatory and distribution requirements.
Offshore company (international structuring)
Offshore companies, such as those registered in JAFZA Offshore or RAK ICC, are used for holding assets, international trade invoicing or group structuring. They cannot lease UAE office space, sponsor residence visas, or trade within the UAE, and are best suited to investors who do not need to be physically resident in the country.
| feature | Mainland | Free Zone | Offshore |
| Foreign ownership | 100% for most activities | 100% | 100% |
| Access to UAE local market | Yes, direct access | Limited, needs a distributor or mainland branch for onshore trade | Not permitted, for international structuring only |
| Physical office requirement | Generally required; requirements vary by emirate, activity and licensing authority | Flexi-desk or office, varies by zone | Not required |
| Corporate tax treatment | 0% on taxable income up to and including AED 375,000; 9% on taxable income exceeding AED 375,000 | 0% on Qualifying Income for a Qualifying Free Zone Person; 9% on Taxable Income that does not meet the Qualifying Income definition | Depends on UAE Corporate Tax residence, UAE nexus, permanent establishment and the nature and source of income |
| Typical government setup cost | AED 15,000 to 50,000+ | AED 12,000 to 40,000+ | AED 8,000 to 20,000+ |
| Employee/investor visas | Based on office size and activity | Package-based, limited by zone quota | Not eligible |
Step-by-Step: How to Set Up a Business in the UAE as a Foreigner
Step 1: Choose your business activity
Every UAE license is tied to one or more specific, government coded business activities. The activity determines which authority can license you, whether 100% foreign ownership applies, and what approvals from other regulators, such as the Central Bank or a health authority, might be needed.
Step 2: Select a jurisdiction (mainland/free zone/offshore)
Match the activity and target market to mainland, a specific free zone, or an offshore structure using the comparison above.
Step 3: Reserve your trade name
Trade names must follow UAE naming conventions, avoid names that are already registered or that reference religious or political bodies, and typically need to reflect the licensed activity.
Step 5: Draft the MOA and lease office space
Mainland companies may require a Memorandum of Association or other constitutional documents depending on the legal form and ownership structure, with notarisation or authentication requirements where applicable. Free zones generally use their prescribed constitutional documents and templates. Where required, an approved lease, office or workspace arrangement must be completed before the licence can be issued, with specific requirements varying by jurisdiction and activity.
Step 6: Get your trade license
Once all documents and fees are submitted, the DED or free zone authority issues the trade license, which enables the company to proceed with corporate banking and company-sponsored visa applications, subject to the requirements of the relevant bank and immigration authority.
Step 7: Apply for your residence visa
The investor and eligible employees can apply for a UAE residence visa linked to the company, which involves an entry permit, status change, medical test, Emirates ID application and visa stamping.
Step 8: Open a corporate bank account
With the license and visa in hand, the company can approach UAE banks for a corporate account, a process that can take anywhere from a few days to several weeks depending on the bank's due diligence requirements.
Documents Required for Foreign-Owned Company Setup
Passport and shareholder documents
- Valid passport copies of all shareholders and managers
- Passport size photographs meeting UAE visa specifications
- Proof of residential address for each shareholder
- No objection certificate, if a shareholder is currently on another UAE residence visa
Business plan
Most free zones and some banks request a short business plan covering the activity, projected revenue, and hiring plan, particularly for licenses tied to visa quotas or for bank account opening.
Trade name and initial approval certificates
These are issued by the DED or free zone once Steps 3 and 4 above are complete, and are needed to proceed to lease registration and license issuance.
Cost of Business Setup in the UAE for Foreigners (2026)
Government and free zone fees change periodically and vary by activity, number of visas, and office type, so treat the figures below as an indicative starting range to budget against, and always request a written, itemised quotation before signing anything.
Free zone setup cost range
| Cost component | Indicative range (AED) |
| License fee (single activity, flexi-desk package) | 12,000 - 25,000 |
| License fee with multiple activities or dedicated office | 25,000 - 50,000+ |
| Per-visa cost (entry permit, medical, Emirates ID, stamping) | 3,500 - 7,500 |
Mainland setup cost range
| Cost component | Indicative range (AED) |
| DED license fee (standard commercial activity) | 15,000 - 30,000 |
| Professional or regulated activity license | 20,000 - 50,000+ |
| Ejari office registration (varies widely by size and location) | 10,000 - 60,000+ |
Hidden costs to budget for (visa, office, renewal fees)
- Annual license renewal, generally similar to the initial license fee
- Health insurance, where required under the applicable emirate and visa/employment rules
- PRO service retainer for ongoing visa and government liaison work
- Bank account minimum balance requirements, which vary by bank
- Corporate tax and VAT filing support if not handled in-house
Taxes Foreign Business Owners Need to Know
9% corporate tax and the AED 375,000 threshold
UAE corporate tax applies at 0% on taxable income up to AED 375,000 and 9% on taxable income above that threshold, for financial years starting on or after 1 June 2023. UAE juridical persons that are Taxable Persons generally need to register for Corporate Tax even where their taxable income does not result in Corporate Tax payable. The AED 375,000 threshold is a rate threshold and should not be treated as a general exemption from Corporate Tax registration.
5% VAT
Value Added Tax is charged at a standard rate of 5% on most goods and services. For UAE resident businesses, VAT registration is mandatory once taxable supplies and imports exceed AED 375,000 in the preceding 12 months or are expected to exceed that threshold in the next 30 days, with voluntary registration available above AED 187,500. Non UAE-resident businesses making taxable supplies in the UAE may be required to register regardless of the threshold, depending on the applicable VAT rules.
0% personal income tax
The UAE does not impose a general personal income tax on individuals' employment income. However, individuals conducting a business or business activity in the UAE may fall within the UAE Corporate Tax regime where their total turnover from such activities exceeds AED 1 million in a Gregorian calendar year. Employment income, personal investment income and real estate investment income are generally excluded from this calculation.
Free zone tax exemptions (qualifying income)
A free zone company that meets the conditions to be a Qualifying Free Zone Person, including earning qualifying income, maintaining adequate substance in the UAE, and meeting a de minimis limit on non qualifying revenue, can apply a 0% corporate tax rate on that qualifying income. A Qualifying Free Zone Person can benefit from a 0% Corporate Tax rate on Qualifying Income and a 9% rate on Taxable Income that is not Qualifying Income, subject to the applicable conditions and de minimis requirements. These conditions are set by the Federal Tax Authority and should be reviewed with a tax advisor for the specific free zone and activity involved.
How to Choose the Right Business Setup Consultant in the UAE
Licensing and registered agent status
Confirm that the consultancy is authorised or appropriately registered to provide the relevant incorporation and government liaison services in the jurisdiction you are targeting, and verify whether the relevant authority requires applications to be submitted through an approved or authorised service provider.
Transparent, itemized pricing
Ask for a line by line quotation covering government fees, the consultant's service fee, visa costs and any third-party charges such as typing centres or notarisation, so there are no surprises once the process is underway.
Track record with foreign investors
Look for a consultancy with documented experience handling non-resident shareholders, remote onboarding and multi-jurisdiction structuring, since these cases involve more compliance checks than a purely local setup.
Post-setup support (banking, renewals, compliance)
Setup is only the beginning. A consultant worth retaining should also support bank account opening, annual license renewal, VAT and corporate tax filing, and Emiratisation compliance, so the relationship does not end the day the license is issued.
Talk to Legacy Partners
Ready to set up your business in the UAE? Our consultants can walk you through the ownership rules, costs and licensing steps for your specific activity and jurisdiction, and give you a free, itemised quotation. Email us at info@legacypartners.ae to get started
Frequently Asked Questions
Updated On: 31 Aug, 2026
