Most guidance you will read about UAE company formation was written against a legal position that has since moved. Federal Decree-Law No. 20 of 2025 amended the Commercial Companies Law (Federal Decree-Law No. 32 of 2021), and the changes matter most to exactly the people least likely to hear about them: founders comparing jurisdictions on the basis of advice from two years ago.
The four changes worth knowing
1. Mainland foreign ownership was broadened again
The 2020 reforms already removed the blanket requirement for a UAE national to hold 51% of a mainland company. The 2025 amendment clarifies and widens that position further. The practical result is that full foreign ownership is now the default across most commercial, professional and industrial activities rather than an exception you argue for.
A limited set of strategic activities still requires UAE-national participation or a local service agent. These are concentrated in areas of national interest such as defence and utilities, not in the ordinary trading and services categories most founders are registering.
2. Ownership is assessed by activity, not by entity
This is the shift that trips people up most, and it is more useful than the headline. Whether you can own 100% depends on the business activity you register, not on the company structure you choose. Two mainland LLCs formed on the same day in the same emirate can have different ownership positions because they registered different activity codes.
It means the ownership question cannot be answered in the abstract. "Can I own a mainland company outright?" has no general answer — it depends entirely on what you are licensed to do. Check your intended activity before you commit to a structure, not after.
3. Re-domiciliation is now formally provided for
The amendment introduces formal rules for moving a company into the UAE from another jurisdiction while preserving its legal identity — rather than dissolving abroad and incorporating fresh here.
For founders with an existing offshore or foreign entity carrying contracts, banking history and trading records, this is the difference between a migration and a restart. Preserving corporate continuity means preserving the things banks and clients actually assess you on.
4. Single-shareholder LLCs were refined
The rules for single-shareholder LLCs have been clarified, making it more straightforward for sole founders and family offices to establish holding entities without resorting to nominee arrangements.
Nominee structures were always a source of risk — legal, commercial and reputational. A cleaner statutory route to a one-owner entity removes a workaround that a lot of small businesses were quietly relying on.
What this does not change
Three things people assume follow from ownership liberalisation, and do not:
- Market access. A free zone company still cannot, by default, sell directly to customers on the UAE mainland. Ownership rules and trading rights are separate questions.
- Corporate tax. The 9% rate above AED 375,000 of taxable income applies regardless of who owns the company. A free zone entity meeting the Qualifying Free Zone Person conditions under Federal Decree-Law No. 47 of 2022 can still apply 0% on qualifying income — ownership has no bearing on that.
- Regulatory load. Mainland companies still face economic department renewals, municipality permits, Civil Defence approvals for premises, and sector regulator oversight where applicable.
Who should reconsider their structure
If you chose a free zone specifically to get 100% ownership, and your customers are actually in the UAE, the original reason for that decision has largely evaporated while the market access constraint has not. That is worth a fresh look.
If you chose a free zone because your revenue is export-oriented, or because you want the QFZP 0% treatment, or because a sector-specific zone gives you the ecosystem and licensing you need — nothing here changes your position.
The Free Zone vs Mainland Tool works through the comparison on your own activity and customer base, and the Formation Timeline Estimator gives you a realistic picture of what a move would take.
This is general information, not legal advice. Confirm activity eligibility with the relevant Department of Economy or free zone authority before applying, and take proper advice on any re-domiciliation.