Let’s Talk Mainland: Requirements to Register a Company in Dubai

How Does Foreign Company Ownership Work? 

While only specific legal corporate structures allowed for majority foreign ownership for Mainland enterprises, a recent decree led to changes. Foreigners can now have a full ownership stake than the previous maximum ownership stake of 49%. That means foreigners no longer have to hire a local Emirati sponsor who holds a membership stake of at least 51%. The corporation should be registered as an LLC to carry out commercial or trade activities.

If there is only one shareholder, there are more options for full foreign ownership. This is mainly because company formation for Sole Establishment/Civil Companies only requires foreigners to appoint a local service agent. However, it should be noted that a Local Service Agent (LSA) will only serve as a company representative and holds no financial rights. The local service agent only offers their services to represent the corporation’s interests in front of the Labour and Immigration ministries. The regulations state the LSA for this type of enterprise does not have any decision-making role in the company’s operations. Thus, the foreign business owner will have complete managerial control over their business entity.

In Dubai, there is also another option that allows for full foreign ownership for freelance activities. This option is opting for the Dubai Trader license, which is only available to those already residents in the United Arab Emirates. This license will not let entrepreneurs apply for any visas. In contrast to other paths for starting a business in the UAE, this option does not require renting a physical office space with Ejari because registering the business entity can be associated solely with the residential address. For this option, unlike the other formats, there is no need for appointing a local agent or sponsor. Like other enterprises, businesses can apply for a limited set of license activities for this category.