100% foreign ownership Dubai: Why You No Longer Need a Local Partner

Foreign entrepreneurs should weigh these options based on their market goals and industry, but the era of mandatory local partners is essentially over.

Dubai – and the UAE in general – has dramatically liberalized foreign ownership rules in recent years. Under the new Commercial Companies Law (Federal Decree-Law No. 26 of 2020, effective June 1, 2021), foreign investors can now establish and fully own onshore (mainland) companies in most sectors. In practice, this means that, except for a few “strategic” industries, expatriates may hold 100% foreign ownership Dubai mainland businesses, just as they always could in Dubai’s free-zone companies. The UAE Ministry of Economy confirms that after the 2020 law change, "Investors of all nationalities can establish and fully own companies in the UAE." Likewise, official UAE government guides note that as of June 2021 the local sponsor requirement Dubai 2025 was effectively removed for most commercial activities, allowing foreigners to own and run onshore companies outright.

Dubai Mainland (Onshore) Companies: New Rules

The changes to the federal Commercial Companies Law 2020 represent a paradigm shift.

New Ownership Rules: Any foreign individual or company may own up to 100% of a mainland UAE company (typically an LLC). This rule, which went into effect on June 1, 2021, means the historic 51% local-ownership rule has been virtually eliminated. For entrepreneurs and investors, this means they can now incorporate Dubai-based mainland companies with full foreign equity, allowing maximum control and profit repatriation.

Structure and Licensing: In Dubai, a mainland company is licensed by the Department of Economic Development (DED) or the new Department of Economy and Tourism (DET). Common structures now open to full foreign ownership include:

• Limited Liability Company (LLC): The most popular form for onshore business. Foreigners can now take 100% of the shares without a local sponsor.

• Professional / Civil Company: Now allows full foreign ownership, though certain professional licenses may still require a Local Service Agent (who holds no equity).

This applies to most commercial and industrial activities, meaning a DED license 100 foreign ownership is now the norm, not the exception.

Strategic Sectors – Exceptions: The one key caveat is that a small list of strategic sectors UAE foreign ownership is still restricted. Cabinet Resolution No. 55 of 2021 defines certain “activities with strategic impact” that require local participation or special approval. These include:

• Financial Services (Banking, Insurance, Money Exchangers).

• Telecommunications, Defense, and Security-related activities.

• Religious Services and Fisheries.

Dubai Free Zone Companies

100% Foreign Ownership by Design: All UAE free zones – including the nearly 30 in Dubai – have always allowed 100% foreign ownership. Free zones are independent jurisdictions designed to attract foreign investment. The Ministry of Economy confirms that expatriates and foreign investors can have full ownership in these zones.

Mainland vs Free Zone: Key Differences

When deciding between mainland and free-zone incorporation—a classic Dubai Free Zone vs Mainland 2025 debate—key points include:

1. Ownership: Both structures permit 100% foreign ownership in eligible sectors. The local sponsor requirement Dubai 2025 is generally a thing of the past for both.

2. Market Access: A Dubai mainland company foreign ownership license allows unrestricted trade across the entire UAE. A Free Zone company is generally limited to operating within its zone or internationally, though recent reforms allow them to obtain special permits to trade on the mainland.

3. Taxes: While the UAE now has a 9% corporate tax, many Free Zone companies can qualify for a 0% tax rate on their "qualifying income" if they meet strict substance and compliance rules. Mainland companies are subject to the 9% rate on profits over AED 375,000.

4. Visa Quotas: Mainland companies can typically sponsor more employee visas by leasing larger office spaces, whereas Free Zones have fixed visa limits per office size.

The new legal framework, particularly the Federal Commercial Companies Law 2020, has ensured that the primary decision is no longer about ownership (which is generally 100% in both) but about operational scope and tax structure.

Summary: 100% foreign ownership Dubai

In summary: yes, you can achieve 100% foreign ownership Dubai for your business, whether you choose the mainland or a free zone. By law, foreign nationals and companies may hold full equity in most businesses across the UAE. The new foreign ownership rules UAE 2025 are designed to let foreign investors be majority (or sole) owners, providing unprecedented control and flexibility.

Foreign entrepreneurs should weigh these options based on their market goals and industry, but the era of mandatory local partners is essentially over.