Full foreign ownership of commercial companies

The UAE Government amended the Commercial Companies Law, granting foreign investors full ownership of specific businesses. This means that foreign investors’ share will not be limited to 49 per cent as before; instead, it can be as much as 100 per cent.
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Federal law on commercial companies

Federal Decree-Law No. 26 of 2020 (PDF 500 KB), which came into effect in early 2021, overhauled the UAE’s Commercial Companies Law No. 2 of 2015 by permitting 100 per cent foreign ownership of mainland companies. It removed the requirement for 51 per cent Emirati ownership or a local agent for most business activities, aiming to boost foreign investment, though strategic sectors still require approvals. This decree was a major step toward economic diversification, aligning with the UAE's goal of fostering a more open, competitive investment environment. The changes introduced by this decree were later further refined and consolidated by Federal Decree-Law No. 32 of 2021on Commercial Companies. 

Key changes and impact
The law brought the following changes: 

  • 100 per cent foreign ownership - the law abolishes the requirement for a majority Emirati shareholder or local partner, allowing foreign investors to fully own onshore (mainland) companies established in the UAE
  • removal of local agents - the obligation for branches of foreign companies to appoint a UAE national service agent has been eliminated
  • enhanced IPO flexibility - companies seeking to convert into joint stock companies may, subject to approval from the relevant authorities, offer up to 70 per cent of their shares through initial public offerings (IPOs), compared to the previous limit of 30 per cent
  • strategic sectors exception - the law authorises the UAE Cabinet to establish a committee comprising representatives of relevant authorities to identify activities of ‘strategic impact’. Based on the committee’s recommendations, the Cabinet will determine these activities and set specific licensing requirements, which may include restrictions on foreign ownership.

Restricted activities

The activities that are not allowed to be owned fully by foreigners are those related to:

  1. security and defence activities and activities of a military nature
  2. telecommunications
  3. banks, exchange, financing, insurance and bank note or coin production
  4. other categories
  • commercial agencies
  • Hajj and Umrah organising
  • Holy Quran recitation institutes
  • fish catching
  • natural pearl catching
  • marine animals catching.

Updated on:

06 Apr 2026

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