UAE implements full foreign ownership of companies on June 1st, 2021

June 1st, 2021 / Haroon Juma / News Updates

foreign ownership

Annual compliance and key actions

The UAE recently took another step towards establishing itself as a global leader by enacting significant amendments to the Commercial Companies Law in the UAE. The new law in the UAE allows 100% ownership of companies for foreign investors and entrepreneurs. The Ministry of Economy has announced that this 100% foreign ownership in the UAE will come into effect from 1st June 2021.

The landmark changes to the 100% UAE foreign ownership laws will help attract foreign investors and entrepreneurs and further improve the ease of doing business in the country.

With effect from 1 June 2021, foreign shareholders in the United Arab Emirates (UAE) are entitled to hold 100% of the share capital in an onshore limited liability company, unless a restriction exists (full details below).

While the UAE government is still in the process of issuing the implementation regulations, it is an opportune time for shareholders to assess their current corporate structure and consider foreign ownership of their entity in the UAE.


What Are The Changes?

Under the UAE commercial companies Law No.2 of 2015, all onshore companies were required to have a UAE National or Emirati-owned company as a partner or sponsor.

Foreign shareholders were allowed to own up to 49% of a limited liability company (LLC), while the local sponsor holds the 51% majority.

The new UAE company rules have removed the need for a local sponsor for companies operating as onshore UAE businesses. These amendments also supersede the Foreign Direct Investment Law (FDI Law) of 2018. The FDI Law had allowed 100% foreign ownership of businesses of certain categories, on a case-by-case basis.

Companies conducting economic activities that have a ‘strategic impact’ will not benefit from 100% foreign ownership and require a local sponsor. A Cabinet Decision will be issued setting out the scope of these ‘strategic impact’ activities.

Based on earlier announcements, it is expected the following sectors qualify for 100% foreign ownership (a provisional list with activity codes is appended to this article):

  • Administrative and support services;
  • Agriculture;
  • Art and entertainment;
  • Construction;
  • Educational activities;
  • Healthcare;
  • Hospitality and food;
  • Information and communication;
  • Manufacturing;
  • Professional, scientific, and technical activities
  • Renewable energy;
  • Space;
  • Transport and storage.

This announcement is a major step forward for the UAE to create a more favorable legislative environment to attract inward investment and talent to grow the economy.


The change in the law provides more opportunities for foreign investors to establish a presence and conduct business in the UAE. Some immediate actions that can be undertaken include:

  1. Assessing your existing corporate structure and whether you are entitled to 100% ownership
  2. Foreign investors can explore the option of a fully owned Limited Liability Company in the onshore (mainland) in addition or as an alternative to a free zone set up


Affected Sectors


1. Agricultural Sector

Serial NoISIC4Business ActivityMinimum CapitalConditions and controls for foreign direct investment
101111Grain Cultivation (wheat, corn, barley, etc) 

– Use of modern technology

– Achievement of high added value

– Contribution in the research and development field

– Satisfaction with the requirements of the licensing entities in the state.

201112Cultivation of bean crops  
301113Cultivation of vegetables, melons, roots, and tubers  
401114Cultivation of sugar cane  
501116Cultivation of fiber crops  
60119001Flowers and flower buds cultivation  
70121Growing of grapes  
80123001Fruits and Citrus cultivation  
90124Growing of pome fruits and stone fruits  
100125Growing of other tree and bush fruits and nuts  



0126Growing of oleaginous fruits  
120127Growing of beverage crops  
1301289Growing of aromatic, drug, and pharmaceutical crops  
140161Support activities for crop production10 
150162Support activities for animal production  
160163Post-harvest crop activities  
170164Seed processing for propagation  
180210Silviculture and other forestry activities  
190240Support services to forestry  


2. Manufacturing Sector

Serial NoISIC4Business ActivityMinimum CapitalConditions and controls for foreign direct investment

Manufacture of food products (except):

1071 – Manufacture of bakery products

105 – Manufacture of dairy products

108 – Manufacture of prepared animal feeds



– Use of modern technology

– Achievement of high added value

– Contribution in the research and development field

– Satisfaction with the requirements of the licensing entities in the state.


Manufacture of beverages (except): 1101 – Distilling, rectifying, and blending of spirits.

1102 – Manufacture of wines

1103 – Manufacture of malt liquors and malt


Manufacture of wearing apparel (except): 14109 – Tailoring and sewing of wearing apparel.

1410122 – Military garments manufacturing

2315Manufacture of leather and related products15 
24`16Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials15 
252012002Straight or complex fertilizers manufacturing15 
262013Manufacture of plastics and synthetic rubber in primary forms15 
272021Manufacture of pesticides and other agrochemical products15 



2022Manufacture of paints, varnishes, and similar coatings, printing ink and mastics15 
292023Manufacture of soaps and detergents, cleaning and polishing preparations, perfumes, and toilet preparations15 
302029006Glues and prepared adhesives Manufacturing15 
312029008Manufacture of dyestuffs and pigments15 
322029009Textiles and leather finishing used15 
332029013Manufacture of photographic plates, films15 
342029019Gelatine and its derivatives Manufacturing15 
352029021Essential oils manufacturing (essence)15 
362029022Extracted natural aromatic products manufacturing15 
372029023Aromatic distilled waters manufacturing15 
382029024Matches manufacturing15 
392029025Welding power and pastes manufacturing15 
402030Manufacture of man-made fibers15 
412100Manufacture of pharmaceuticals, medicinal chemicals, and botanical products15 
4222Manufacture of rubber and plastic products15 
4323Manufacture of other non-metallic mineral products15 

Manufacture of basic metals (except): 242 – Manufacture of basic precious and other non-ferrous metals.

2432 – Casting of non-ferrous metals


Manufacture of fabricated metal products, except machinery and equipment

(except) 2529 – Manufacture of weapons and ammunition

4626Manufacture of computer, electronic and optical products15 
4727Manufacture of electrical equipment20 
4828Manufacture of machines and equipment n.e.c. (except) 28259 – Tobacco Processing Machinery Manufacturing100 
4929Manufacture of motor vehicles, trailers, and semi-trailers100 
503011101Building of commercial vessels100 
513011103Ships and Floating structures sections Manufacturing100 
523011905Construction of drilling platforms, floating or submersible100 
533011906Construction of floating structures100 
543011907Building of Hovercrafts100 
553012Building of pleasure and15 
563020Manufacture of railway, locomotives, and rolling stock20 
573030Manufacture of air and spacecraft and related machinery (except): 30300006 – Military Ballistic and Guided Missiles Manufacturing100 
583090Manufacture of transport equipment n.e.c20 
5931Manufacture of furniture15 
603220Manufacture of musical instruments2 
613230Manufacture of sports goods3 
623240Manufacture of games and toys3 
633250Manufacture of medical and dental instruments and supplies20 
643290Other manufacturing n.e.c.3 
653312001Repair and maintenance of train engines15 
663312002Repair and maintenance of engine ships15 
673315001Repair and maintenance of ships15 
683315004Repair and maintenance of trains and railway equipment15 
693315005Maintenance and Repair of Aircraft engines15 
703315006Repair and maintenance of aircraft15 


3. Service Sector

Serial NoISIC4Business ActivityMinimum CapitalConditions and controls for foreign direct investment
716910002Legal Consultancy OfficesAs per the applicable regulations

– Not to advocate before the UAE courts

– Not to carry out any judicial procedure before courts, arbitral tribunals, and judicial and administrative committees

– Not to carry out attestation activities

– To obtain the approval of the relevant entities in charge of licensing such activities in the State

– To be a natural or legal person known for their excellence in this field

72692Accounting, bookkeeping, and auditing activities; tax consultancyAs per the applicable regulationsOnly permissible for tax planning for business and consultancies, preparing and reviewing taxes on businesses
73711Architectural and engineering activities and related technical consultancyAs per the applicable regulationsTo be a natural or legal person known for their excellence in this field.
74862Medical and dental practice activities  
7575Veterinary activities  
76620Computer programming consultancy and related activitiesAs per the applicable regulationsTo provide a technical team of no less than 5 specialized programmers by the end of the first year of the company
7772Scientific research and developmentAs per the applicable regulationsAs per the applicable regulations
787730-77300Renting and leasing of other machinery, equipment, and tangible goods  
79471Retail sale in non-specialized stores (except Cooperative Societies 4711001)  
81732Market research and public opinion polling  
82702Management consultancy activities  
83712Technical testing and analysis  
84331Repair of fabricated metal products, machinery, and equipment (except ships or aircraft and other transport equipment)  
858121-81210General cleaning of buildings  
86742Photographic activities  
878292-82920Packaging Activities  
88823Organization of conventions and trade shows  
89741Specialized design activities  
907490005Legal Translation services  
917490006Translation services, movies, and television programs  
927490012Translation publication services  
938299002Translation Services  
9441Construction of buildingsAs per the applicable regulationsOnly permissible for large-scale infrastructure projects such as airports, highway roads, sports facilities, and projects whose value exceed AED 450,000,000
9542Civil Engineering  
96432Electrical, plumbing, and other construction installation activities  
97433Building completion and finishing  
98431Demolition and site preparation  
99439Other specialized construction activities  
1007730009Construction and Building or Demolition Machines and Equipment renting  
101851Pre-primary and primary educationAs per the applicable regulationsPublic education is excluded. To obtain the approval from the entities in charge of education to license such activities and to comply with such standards and controls as may be determined by them. To comply with the conditions and standards of school facilities and to ensure a high level of education quality.
102852Secondary Education  
103853Higher Education  
104854Other Education  
105370SewerageAs per the applicable regulationsAs per the applicable regulations in this regard
106382Waste treatment and disposal  
1073900001Pollution consequences treatment and environmental protection  
108861Hospital Activities100Subject to the approval of the relevant authorities in light of the economic need taking into account the number of hospitals, medical and health centers in a specific area. Dubai Health Care City is excluded from the above condition.
109869Other human health activities70As per the applicable regulations
1108211001Hotel ManagementAs per the applicable regulations 
1118211004Restaurant Management  
11290009Creative activities and presentation of art drama (theatre)Permissible only for theatre activities and live bands. As per the applicable regulations 
1139000104Music Band  
1158130002Landscape and gardening services  
1169103 – 91030Botanical and zoological gardens and nature reserves activitiesPermissible only for public garden services and specialized garden services 
1175012 – 50120Sea and coastal freight water transportAs per the regulations applicable 
1185022001Internal water transportation of goods  
1197730016Commercial ships rental  
1205222002Ship piloting and towing  
1215222007Marine towing of boats and jet skis  
122NewActivities of holding companies in intellectual properties  


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