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Saturday, September 24, 2022

Can Owners Get 100% Ownership In Mainland Business Setup UAE?

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A UAE corporation could historically only have 100% foreign ownership in one of two situations: either it had to be established in a free zone or as a professional services firm. When foreign nationals intended to establish a Mainland Business Setup UAE, the prevailing norm up until recently required 51% of the shares to be owned by UAE citizens. This stipulation was contained in the UAE Companies Law.

What’s different now?

The emphasis of the updated legislation is on the control of rules governing the formation of limited liability business entities. There may be one owner or many stockholders in a Limited Liability Company (LLC).

Expats were only permitted to possess 100% of a limited number of businesses in the professional services sector and specific free zones in the UAE. As a result, legitimate and legal individuals are now able to have a mainland company formation in Dubai without the requirement for a local partner.

Important aspects of the new amendment

According to the new amendment, the following ownership patterns will alter most.

  • Removes the need that UAE enterprises registered in Dubai to have a majority of UAE shareholders and local agents.
  • 100% foreign ownership of enterprises based in the UAE is permitted, as long as they abide by the rules set forth in a cabinet resolution that was approved by the UAE cabinet.
  • In an Initial Public Offering, a Joint Stock Company may sell 70% of its outstanding shares (IPO). Previously, this number might have been as low as 30%.
  • The shareholders have the right to file a lawsuit against the business in court if the corporation, through its directors and general managers, participates in an activity that results in financial loss.
  • Provides local governments with the power to recognize the necessary capitalization, ownership ratios, and permission for onshore Mainland Business Setup UAE that are governed by cabinet resolution regulations. Previously, the Ministry of Economy or each Emirate’s Economic Departments were the only ones with access to these capabilities.
  • Meetings of corporations no longer need to be presided over by an Emirate; they are now accessible to foreigners as well.
  • In a similar vein, the restriction on expatriates serving on the board of directors of the corporation has been repealed.
  • The worldwide epidemic has made electronic voting possible at annual general meetings.
  • If executive executives or company chairs misuse their position of authority, there is a procedure for their removal.

The 100% Ownership Rule for Mainland Business Setup UAE: 3 Things You Should Know

  1. The law will support the growth of the many economic sectors. With the help of foreign investment and skill, eco-friendly activities including hybrid power plants, solar panels, and other green technology will expand.
  2. A favorable FDI law will entice new foreign investors from all over the world who see development potential in the Middle Eastern market’s high demand.
  3. Additionally, this action will make the world more competitive.


Business setup consultants have assisted local and foreign business owners and investors in their initial steps of mainland company formation in Dubai. Their qualified experts take care of all the processes and legalities, allowing firms to focus on their core business activities.

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