corporate law
The United Arab Emirates (UAE) has evolved into a key business hub, attracting global investors to its varied commercial environment. Comprising seven emirates, entrepreneurs aiming to set up companies in Dubai or other emirates must comply with UAE commercial law. As of 2017, the UAE hosted 131,000 registered businesses, with approximately 80% of the population being foreign nationals, demonstrating significant opportunities for foreign investment in the region.
In 2019, the UAE introduced provisions allowing 100% foreign ownership across 122 economic activities in 13 sectors, including renewable energy, logistics, hospitality, food services, and manufacturing. However, it is crucial to note that each emirate may implement its own regulations. Specifically, seven sectors remain barred from 100% foreign ownership: defense, banking, insurance, currency printing, communications, Hajj/Umrah services, and Quran centers.
Starting a business in the UAE has become more attainable thanks to amendments to the Commercial Company Law in 2020. These changes eliminated the previous requirement for a local Emirati to hold a 51% stake in onshore businesses. Consequently, foreign investors can own up to 100% of companies in most sectors, except those deemed to have ’Strategic Effect’. Moreover, foreign firms no longer need to appoint UAE nationals as directors in joint stock companies. Business activities eligible for full foreign ownership are listed by the respective Department of Economic Development in each emirate.
Businesses may register in the UAE under various structures:
Free zone businesses are established within designated jurisdictions across multiple emirates. There are over 40 Free Zones in the UAE, known for facilitating free trade in goods and services. Free zone companies can now also operate on the mainland, following the Dubai Executive Council Resolution No. 11/2025.
Tax Rates:
Emiratization and Labor Laws (2025):
An offshore company operates in the UAE without a physical office or address. This entity allows for complete foreign ownership, making it an attractive option for investors focused on confidentiality and asset protection.
A mainland company obtains its business license from the Department of Economic Development (DED) in the relevant emirate and can operate both locally and internationally without restrictions.
Sole Proprietorship:
A sole proprietorship is owned and controlled by one individual who retains all operational authority and profits. While individuals of all nationalities can form this type of business, only UAE and GCC nationals can own commercial or industrial enterprises.
Civil Company:
Civil companies can be established by professionals, such as doctors, accountants, and lawyers. This structure requires a UAE national to own 51% of the business, who must also possess relevant qualifications and experience. Consulting the Department of Economic Development for compliance is advisable.
Limited Liability Company (LLC):
LLCs must have between two and 50 shareholders, each liable only for their share. They can be 100% foreign-owned; however, a UAE national must hold a minimum of 51% of the shares, and companies with more than seven partners must form a board comprising at least three shareholders.
Foreign Company Branch:
Foreign businesses may establish branches within the UAE, retaining 100% ownership, but are required to import goods through a local trading entity.
Free Zone Company:
Free Zone companies typically require two to five stakeholders and offer various advantages. Resolution No. 11/2025 allows these entities to operate on mainland Dubai with necessary permits from the Department of Economy and Tourism (DET).
Freelancers:
Establishing a freelance business is a straightforward process. Registration in a Free Zone necessitates an application form, CV, bank reference, and a notarized Registry Identification Code Form. Freelancers can also pursue a visa.
Digital Registration:
The Basher platform facilitates company registration in just 15 minutes, as per the guidelines from the UAE Ministry of Economy.
Corporate Tax Compliance:
Non-resident investors involved in Qualifying Investment Funds (QIFs) and Real Estate Investment Trusts (REITs) must comply with new tax nexus regulations under Cabinet Decision No. 35/2025.
National Economic Register (NER):
All businesses must register on the NER to access license details and compliance status.
Remote Setup:
Entrepreneurs can initiate registration remotely via a Power of Attorney. However, biometric verification will necessitate a physical visit.
Recent developments allow foreign investors to register limited liability and joint stock companies as holding entities in Dubai, with full ownership accessible exclusively in Dubai Free Zones.