Foreign Ownership in Dubai: Mainland, Free Zones and Offshore

Prior to the 2020 amendments to the UAE Commercial Companies Law (Federal Decree-Law No. 32 of 2021, which came into force in 2022), most mainland companies required at least 51% ownership by a UAE national — either as a sponsor or as an active partner. This was one of the most significant barriers for foreign investors seeking to operate in the local UAE market. The reforms removed this requirement for the majority of commercial and professional activities. Foreign nationals can now own 100% of a mainland company in Dubai without a local sponsor or service agent for most activities. The UAE government simultaneously published a list of Restricted Activities — those that still require Emirati majority ownership or participation for strategic national interest reasons. For free zones, 100% foreign ownership was already the standard long before 2020. Free zones were specifically created to attract international investment without local ownership requirements, and this has remained unchanged. For offshore entities (JAFZA Offshore, RAK ICC), 100% foreign ownership has always been permitted. The practical effect of the 2020 reforms is that, for most business activities, the choice between mainland and free zone is now made on operational, commercial, and financial grounds — not on the basis of ownership structure.

Under the updated framework, foreign nationals can own 100% of a mainland company in Dubai for most commercial and professional activities. The key structures available to foreign investors in the mainland are: Limited Liability Company (LLC): The most common structure for commercial businesses. Foreign nationals can hold 100% of the shares for the vast majority of commercial and professional activities. Sole Establishment: A single-owner entity typically used by professionals such as consultants, freelancers, or individual traders. Non-GCC nationals in certain professional categories may still require a local service agent (distinct from a local sponsor — a service agent does not hold equity or receive a profit share). Civil Company: A structure for professional firms such as legal, medical, engineering, or accounting practices. The ownership rules in this category depend on the specific profession and the regulatory body governing it. Branch of a Foreign Company: A UAE branch of an overseas parent. Foreign companies can own 100% of a UAE branch. A National Service Agent may be required in some cases, acting as a liaison with government authorities without any ownership stake. For all these structures, the 100% foreign ownership position is subject to the activity not being on the Restricted Activities list.

A relatively small but important category of activities remains subject to Emirati ownership requirements. These are defined in the UAE Cabinet Resolution on Restricted Activities and generally include sectors considered strategic to national security, sovereignty, or economic policy. Activities that may require Emirati participation or majority ownership include: activities related to oil and gas exploration and production under specific concession arrangements; certain utilities and energy infrastructure; activities related to national defence and security equipment; certain specialised media activities where specific regulatory conditions apply; and a limited number of other strategic sectors. Crucially, the restricted list does not include most commercial trading, services, technology, consulting, manufacturing, hospitality, healthcare (subject to regulatory approvals), real estate (subject to RERA), or financial services (subject to the relevant regulator). The vast majority of commonly sought activities are fully open to 100% foreign ownership on the mainland. Before proceeding with any mainland incorporation, it is advisable to have your specific business activities reviewed by a qualified adviser to confirm their status. This is a step we routinely include in our initial consultation.

Free zones have always permitted 100% foreign ownership and this remains one of their defining characteristics. All of Dubai's free zones — DMCC, DIFC, IFZA, JAFZA, Dubai Media City, Dubai Internet City, and the rest — allow foreign nationals to hold 100% of their shares with no Emirati ownership requirement. The trade-off, as discussed in our Mainland vs Free Zone guide, is that free zone companies face restrictions on trading directly within the UAE mainland market. They can operate internationally and within the free zone itself, but selling goods or services to mainland UAE clients requires either a local distributor arrangement or a dual licence. For foreign investors whose primary concern is 100% ownership without local partner risk, a free zone is the simplest and most straightforward solution. For those who need mainland market access alongside full foreign ownership, the updated mainland rules now make both available simultaneously — a significant shift from the pre-2020 landscape.

Offshore companies in the UAE — typically incorporated through JAFZA Offshore or RAK ICC — permit 100% foreign ownership. They are designed for international business operations, holding company structures, and asset ownership rather than local trading. An offshore entity cannot hold a physical office in the UAE, cannot employ staff directly in the UAE, and cannot conduct business with customers in the UAE mainland. However, it can own shares in other companies (including UAE companies), hold bank accounts in the UAE, and own real estate in designated areas (in the case of JAFZA Offshore). The offshore structure is used primarily for asset protection and international corporate structuring. For entrepreneurs looking to establish a fully operational business in Dubai, an offshore entity is typically a holding layer above a mainland or free zone operating company, rather than a standalone solution.

Your ownership structure has a direct impact on your ability to open and maintain a corporate bank account in the UAE. Banks conduct their own Know Your Customer (KYC) and Ultimate Beneficial Owner (UBO) assessments that go beyond the licensing authority documentation. For individually-owned companies (single foreign shareholder), the process is relatively straightforward. The shareholder provides their passport, proof of address, source of funds documentation, and business overview. Banks will ask about the nature of the business, the expected transaction volumes, and the client base. For companies with corporate shareholders, the bank requires a full ownership chain tracing through to the ultimate individual beneficial owners. This means providing certified corporate documents, board resolutions, and UBO identification for every level of the structure. Complex ownership chains — particularly involving offshore holding companies — require more comprehensive documentation and may take longer to process. Banks are particularly careful when the structure involves jurisdictions on FATF grey lists or involves activities that are inherently higher-risk (cryptocurrency, precious metals trading, certain financial services). Having a clean, well-documented corporate structure — and being able to explain it clearly — significantly improves the bank account opening experience.