Business Setup UAE: How to Set Up a 100% Foreign-Owned Company in the UAE
Entrepreneurs around the globe are increasingly considering business setup UAE options thanks to favorable legislation, strategic location, and tax-friendly policies. If you’re looking to set up a 100% foreign-owned company in the UAE, this guide provides you with all the essential steps and insights to navigate the process successfully.
Why Choose the UAE for 100% Foreign-Owned Company Setup?
Setting up a business in the UAE offers numerous advantages, especially for international investors:
- Full ownership: Foreign investors can now own 100% of their company without a local sponsor (in most sectors).
- Strategic location: Access to markets in Asia, Europe, and Africa.
- Stable economy and political environment
- Tax benefits: 0% corporate and personal income tax in many jurisdictions
- World-class infrastructure and logistics
Key Legal Framework for Business Setup UAE
The UAE introduced amendments to the Commercial Companies Law in 2021, allowing foreign investors to have 100% ownership in mainland companies (excluding certain restricted sectors). Prior to this, full foreign ownership was only possible in free zones.
You can choose to set up in either:
- UAE Mainland: Operate anywhere in the UAE and tap into both local and international markets.
- Free Zones: Enjoy customs exemptions, repatriation of profits, and streamlined processes.
UAE Government Portal provides official guidelines on eligibility and updated laws.
Step-by-Step Process for Business Setup UAE
1. Decide on the Jurisdiction
The first step is selecting the most suitable jurisdiction. Each has its own benefits:
- Mainland: Ideal for those targeting the local UAE market
- Free Zones: Best suited for niche or international operations
Need detailed info on Dubai’s top zones? Read our guide on Best Places to Establish a Company in Dubai.
2. Choose Business Activity
This will determine the type of license and legal structure. Make sure your activity is permitted in your chosen jurisdiction.
3. Select the Legal Structure
Options may include:
- Limited Liability Company (LLC)
- Free Zone Company (FZC or FZE)
- Branch of a Foreign Company
4. Reserve Your Trade Name
Pick a unique and relevant trade name. It must comply with UAE’s naming conventions and be approved by the Department of Economic Development (DED).
5. Apply for Initial Approval
This certifies that there are no objections from the UAE government for your business operations.
6. Draft and Sign LSA/Memorandum
Although 100% foreign ownership is allowed in many sectors, some may still require a Local Service Agent (LSA). A Memorandum of Association (MOA) outlines the shareholders, capital distribution, and operations model.
7. Choose Office Space
You’ll need a registered address. Most free zones offer flexible office packages, while mainland companies must lease a physical office.
8. Get Your Business License
Submit all required documents and obtain the relevant license based on your business activity:
- Commercial License
- Professional License
- Industrial License
9. Register for VAT (if applicable)
Businesses with annual revenues above AED 375,000 must register for VAT with the Federal Tax Authority.
10. Open a Corporate Bank Account
Choose a bank that aligns with your business needs. You’ll need your license, MOA, passport copies, and business plan.
Business Setup UAE: Costs to Consider
Starting a company in the UAE is an investment, and understanding the costs upfront helps in budgeting effectively. Typical expenses include:
- Government Fees (license, registration, visas)
- Office rent (varies between zones and sizes)
- Bank setup fees
- Consultancy fees (optional, but advisable)
Depending on the activity and location, setting up a company may cost between AED 15,000 and AED 50,000.
Benefits of Full Ownership in UAE
Setting up a fully owned enterprise in the UAE brings with it various advantages, including:
- Complete control: Make all strategic and financial decisions
- Profit retention: No revenue sharing with local sponsors
- Simplified operations: Easier to expand and manage internationally
Common Challenges and Tips for Smooth Business Setup UAE
- Legal ambiguities: Work with a consultant for accurate and updated legal advice
- Banking hurdles: Meet compliance and KYC requirements thoroughly
- Cultural norms: Understand UAE’s business etiquette
Best Free Zones for Foreign Ownership
Some of the top-rated zones for foreign companies include:
- Dubai Multi Commodities Centre (DMCC)
- Jebel Ali Free Zone (JAFZA)
- Dubai Silicon Oasis (DSO)
- Abu Dhabi Global Market (ADGM)
- Sharjah Media City (SHAMS)
Final Thoughts: Is Business Setup UAE the Right Move?
Choosing to start a company in UAE opens doors to one of the world’s most dynamic markets. With full foreign ownership now accessible in many sectors, the UAE is primed for international business expansion.
If you’re looking for a comprehensive step-by-step strategy on launching a business in Dubai, check out our detailed Dubai company setup guide.
Frequently Asked Questions (FAQs)
Can I own 100% of a company in the UAE?
Yes, most sectors now allow full foreign ownership due to legal reforms in 2021.
How long does it take to complete a business setup in UAE?
Depending on documents and approvals, it may take from 5 to 15 working days.
Do I still need a local sponsor?
No, not for most commercial and professional sectors. However, some strategic sectors may require a local agent or distributor.
For detailed, official info, don’t forget to visit the UAE Government Portal.
