100% Foreign Ownership in the UAE: What Investors Need to Know in 2025

UAE Law Now Allows 100% Foreign Ownership

While earlier foreign companies and foreign investors could only have 100% ownership for companies established in UAE free zones, now 100% foreign investment is allowed in the UAE’s mainland as well.

Under the new law, there are provisions for 100% ownership for foreign investors in the UAE, and the requirement of a UAE national holding 51% ownership is virtually removed. The new provisions are subject to certain restrictions and strict procedures. The consequences of non-compliance range from:

• Fines and Penalties
• Deportation
• Reputational Damage
• Cancellation of Business License
• Criminal Charges

Understanding the UAE's foreign ownership rules is crucial for making investments in 2025 and avoiding ownership disputes. 

What Laws Govern 100% Ownership for Foreign Investors in Dubai?

Every foreign investor should be aware of how the following UAE laws and regulations work to effectively structure their investment and decide on the intended business activity in the UAE:

1. Federal Decree-Law No. 32 of 2021: The decree removed the requirement of at least 51% UAE national ownership for UAE LLCs and other corporate entities. 
2. UAE Resolution No. 16 of 2020: The resolution by the Department of Economic Development (DED) provides a ‘Positive List’ for sectors where 100% foreign ownership is permitted. 
3. Federal Decree-Law No. 19 of 2018: This is the primary legislation for Foreign Direct Investment in the UAE, and prescribes a ‘Negative List’ for foreign investment and ownership, restricting foreign participation in certain sectors.
4. UAE Cabinet Resolution No. 55 of 2021: This prescribes a list of strategic impact activities that require additional licenses from UAE regulatory authorities. 

Important: The UAE Cabinet FDI Law, allowing full foreign ownership, has specific foreign and UAE national shareholding pattern requirements. 

Legal Guidance: Kayoruz & Associates is a full-service law firm with top-rated legal experts in the UAE. Book a free legal consultation to discuss your business needs and start your investment process in the UAE. 

UAE Companies Law Foreign Ownership: Negative List, Positive List and Strategic Impact Activities

Under the UAE Law allowing foreign ownership, the business activities intended to be carried out by a foreign investor or company can be classified under three categories:

Positive List

The positive list contains a list of 122 economic activities in the following sectors, where 100% foreign ownership is permitted:

• Agriculture
• Manufacturing Industries 
• Hospitality and Storage
• Healthcare
• Transport and Storage
• Construction
• Science and Tech

Important: The above list is non-exhaustive, and investors should consult an expert UAE attorney. Kayrouz & Associates’ International Law team can assist foreign investors in making investments in the UAE. 

Critical Note: Any activity in the above sectors that is regulated by any law or decree specific to foreign shareholding or investment has to be complied with. 

Negative List

Certain sectors and activities in the UAE remain restricted and do not allow foreign investment (even 49%) to safeguard national interests. These include:

• Exploration and Production of oil and other petroleum products
• Banking, financial and insurance services
• Military, defence and security-related activities
• Water and electricity services
• Postal and telecommunication services
• Land and air transport services
• Fishery services

Please Note: It is advised that foreign companies do not use any nominee shareholders or “front arrangement” to enter any of the above activities, as the same may attract heavy penalties. 

Strategic Impact Activities

Several activities mentioned in the negative list have now been mentioned under the “Strategic Impact List”. This allows foreigners to invest in those activities. Whether 100% ownership for foreign investors in Dubai is permitted in these sectors depends on the type of activity. 

The following UAE regulatory authorities license and control the activities that form a part of the Strategic Impact List:

• Ministry of Defence and Ministry of Interior: They control, approve and provide requirements of foreign participation in security, defence, and activities of military nature.
• Central Bank of the UAE: Oversees and determines the shareholding percentage of UAE nationals and foreign investors for participation in Banks, Exchange Bureaus, Finance Companies, Insurance Activities, and Money Printing. 
• Public Authority for the Regulation of the Telecommunications Sector and the Digital Government: Determine the requirements and shareholding conditions for foreign ownership in telecom activities. 
• General Authority for Islamic Affairs and Endowments (GAIAE): Hajj, Umrah Services and Holy Quran Recitation Centres are approved and regulated by the GAIAE, including foreign ownership.

What are the Key Takeaways For Foreign Investors in the UAE?

Based on the current legal position for investment in the UAE, foreign investors looking to incorporate their company in the UAE, or invest in any business activity in 2025, need to know the following:

• 100% foreign ownership: Foreign investors are now permitted to have 100% ownership in a business in the UAE. While this process is straightforward in the free zone, additional laws must be complied with for investment on the UAE mainland as the FDI laws only permit investments in designated sectors. 

For instance, even for sectors in the positive list, if any activity forms a part of the negative or strategic impact list, there may be restrictions. 

• Negative vs Strategic Impact List: The negative list, which came in 2018, was heavily modified by the Cabinet Resolution of 2021. Although foreign investments in defence, banking and telecom have been liberalised, there are still restrictions on sectors like petroleum exploration and production. 
• Licensing and Minimum Capital Investment: Even in sectors where 100% foreign ownership is permitted (in the UAE mainland), there are certain conditions related to minimum capital requirements and approvals from UAE departments before investing in the UAE. 
• Exemptions and Exceptions: In some sectors where foreign participation is prohibited, strategic exceptions or joint ventures may be used to seek exemption from the investment restrictions. 

How Kayrouz & Associates Can Help with Foreign Ownership in the UAE?

Since its establishment in 2006 by Pierre Kayrouz, Kayrouz & Associates has become a leading full-service law firm in the UAE and the Middle East, renowned globally for its unwavering commitment to clients and novel, strategic legal solutions backed by real-world expertise. 

Kayrouz & Associates has resolved more than 570 cases, with a client satisfaction rate of 96%, and has three strategic offices in Dubai, Abu Dhabi and Beirut. 

Kayrouz & Associates’ Corporate and Commercial and International Law teams can assist foreign investors in:

• Cross-border contracts and transactions
• Foreign direct investment (FDI)
• International corporate structuring
• Business Formation and Incorporation
• International legal opinions
• Corporate records and compliance issues

Book a consultation or visit our offices to discuss your case.