How to Setup a 100% Ownership Mainland Company in UAE

The Past Law

Previously, expatriates aiming to set up a business in Dubai or other Emirates faced significant restrictions on company ownership. Under the old regulations, a foreign businessperson could own a maximum of 49% of their business, while the remaining 51% was required to be held by a UAE national, commonly referred to as an Emirati Sponsor or local partner.

While the chosen sponsor had no active role in the business operations, they were entitled to a fixed annual fee from the company owner. This arrangement not only raised the cost of starting a business but also posed challenges for expatriates in finding a trustworthy local sponsor to safeguard their investment.

Fortunately, these barriers have been removed with the introduction of the Foreign Direct Investment (FDI) Law, which brought sweeping changes to the Commercial Companies Law No. 2 of 2015. The revised framework, comprising 51 updated articles, now focuses on facilitating the establishment of Limited Liability Companies (LLCs), providing greater autonomy and opportunities for foreign investors.

The Current Law

Under the new provisions, expatriates can now establish a business in Dubai Mainland or any other Mainland in the UAE without the requirement of a local sponsor. In practical terms, this allows foreigners and immigrants to enjoy 100% ownership of their company’s assets, a significant shift from the previous regulations.

These updated laws extend across 13 key sectors and encompass 122 economic activities, opening the doors to greater opportunities for international investors. This transformative change has been widely celebrated for simplifying business setups and fostering a more inclusive investment environment in the UAE.

However, it is important to note a minor caveat within these amendments. Certain companies excluded during cabinet decision-making sessions, as well as entities that are fully owned by federal or local governments, remain exempt from these revised laws. As such, while the changes are extensive, they do not apply universally across all sectors and types of businesses.

 

Sector	Economic Activities	Investment	FDI Requirements
Agriculture	Growing of leguminous crops, grapes, non-perennial crops, beverage crops, seed processing, drug and pharmaceutical crops, animal production, silviculture and other forestry activities, etc.	7.5 – 10 Million Dhs.	Must meet the requirements of licensing entities in the State Must contribute immensely to the R&D Dept. Must use modern technology and be encouraged to use newfangled technology Must add a high value
Manufacturing	Manufacture of food products, beverages, apparel, wood products, plastics, pesticides, detergents, welding products, metallic products, machinery equipment, hovercrafts, engines, missiles, etc.	2 – 100 Million Dhs.	Must meet the requirements of licensing entities in the State Must contribute immensely to the R&D Dept. Must use modern technology and be encouraged to use newfangled technology Must add a high value
Services	>Assorted	Payments in accordance with the enforced legislation	Highly varied

Source: Cabinet Resolution 16 Concerning the Determination of the Positive List.

Benefits you can Procure

The recent amendment to foreign ownership rules marks a significant shift in how mainland companies in the UAE operate. By introducing these changes, the amendment not only reshapes the foreign investment landscape but also fosters a more favorable environment for business setups. This structural overhaul, allowing 100% ownership in UAE for mainland companies, makes the business ecosystem more accessible and appealing to entrepreneurs planning their ventures in Dubai or other Emirates.

The benefits of this amendment are multifaceted. Firstly, it eliminates the long-standing challenge of relinquishing a majority of your company’s shares to a third party, a key deterrent for many aspiring entrepreneurs. Secondly, it streamlines the process for overseas investors by removing the need to search for and partner with a local sponsor. This change empowers business owners to directly initiate their setups in Dubai or any other Emirate with full autonomy over their ventures.

Most importantly, businesses established on the mainland enjoy unparalleled advantages. Unlike Free Zone companies, which face limitations on office size, trade boundaries, and staffing capacities, mainland companies operate without such restrictions. This flexibility allows for greater scalability and operational freedom, ultimately driving rapid economic growth across the Emirates.

In essence, the amendment has redefined the UAE’s business environment, transforming it into a fertile ground for innovation and growth while removing barriers that previously hindered foreign investment.

Where you must start

While the removal of these restrictions is undoubtedly a game-changer for aspiring entrepreneurs, setting up a business in Dubai or any other Emirate remains a significant and complex undertaking. Without expert guidance, navigating the intricacies of the process can be overwhelming, potentially leading to delays or missteps. That’s where business setup professionals like Cross Link International come in, ensuring a seamless and efficient journey to launching your dream business.

If you’ve already outlined your business plan and are ready to take the next step, we’re here to help you make it a reality. With the most affordable packages and a reputation as the most reliable business setup consultants in the UAE, we are committed to simplifying the process for you.

Take the first step towards your business success today! Contact us at +971 4 321 6631 or +971 55 744 6445, or fill out this form for a callback. Let Cross Link International transform your vision into a thriving business.