What the 2021 change to UAE foreign ownership actually did

The rule that a UAE national had to hold at least 51 per cent of a mainland company was ended by Federal Law by Decree No. (26) of 2020, which amended Federal Law No. (2) of 2015 on Commercial Companies. It was issued at the Palace of the Presidency in Abu Dhabi on 27 September 2020, corresponding to 10 Safar 1442 AH. The Decree rewrote 51 articles of the 2015 law and added three new ones. It also repealed two things outright: Article 329, which obliged a branch of a foreign company to appoint a UAE national service agent, and Federal Law by Decree No. (19) of 2018 on Direct Foreign Investment.

Two details go missing in most accounts of it. The first is that the ownership provisions did not commence with the rest of the Decree. The second is that nothing in the Decree grants anyone 100 per cent ownership. It removes a federal floor and passes the discretion down to the licensing authority in each emirate, which keeps an express statutory power to set a national shareholding percentage of its own. The federal government portal records that the 2020 Decree was later refined and consolidated by Federal Decree-Law No. 32 of 2021 on Commercial Companies.

Commencement runs on two clocks

Article Eight of the Decree states that it comes into force as of 02/01/2021. Article Seven then carves three provisions out of that date. The amendments to Articles (10) and (151), and the repeal of Article (329), come into force six months from the date of publication in the Official Gazette. Those are precisely the ownership provisions. The Decree does not print its own Gazette date, so the commencement of the headline change must be worked back from the Gazette issue rather than assumed to be 2 January 2021. The federal portal describes the Decree only as having come into effect in early 2021.

What Article 10 says, and what it withholds

The replacement Article (10) is headed Activities with Strategic Impact. It sets up a sequence. A committee including representatives from the competent authorities is formed by Cabinet resolution on the Minister's proposal, and that committee proposes the activities with a strategic impact together with the controls required to license companies undertaking them. The Cabinet then issues the resolution defining them. No percentage appears anywhere in that sequence.

Read the scope of that clause carefully. It covers all companies incorporated within the authority's competence. Strategic activity or not. This is why a correct answer in Dubai and a correct answer in Sharjah can differ on the same activity, and why a general statement that the UAE permits full foreign ownership says nothing about a particular licence. Clause 4 of the same Article lets the Cabinet exclude a company governed by special legislation from any provision on national ownership or national involvement in management.

The activities that stayed restricted

The federal government portal publishes the categories that cannot be fully foreign-owned as:

• security and defence activities and activities of a military nature
• telecommunications
• banks, exchange, financing, insurance and bank note or coin production
• commercial agencies
• Hajj and Umrah organising
• Holy Quran recitation institutes
• fish catching, natural pearl catching and marine animals catching

Telecommunications is licensed by the Telecommunications and Digital Government Regulatory Authority, the body responsible for issuing licences under the telecommunications law. Banking and insurance carry a second constraint that has nothing to do with nationality. The amended Article (11) provides that only public joint stock companies may conduct banking and insurance activities, unless the laws regulating those activities or the resolutions issued under them provide otherwise. A foreign investor can clear the ownership question on those two and still be blocked by legal form.

Board nationality moved at the same time

Article (151) is headed Nationality of the Members of the Board of Directors. In its amended form it fixes no quota. It defers to Article (10) and to any requirements set by the Cabinet or the competent authority in the formation of the board. It then sets a cure period that is easy to miss. Where the proportion of UAE nationals on the board falls below what the Article requires, the deficiency must be filled within no later than three months, and the law provides that the board's resolutions are void on the expiry of that period. Three months. Not a grace period anyone should plan to use.

The national agent for branches

Article (329) of the 2015 law required a branch of a foreign company to appoint a UAE national service agent. Article Six of the Decree repealed it. The federal portal states the effect directly: the obligation for branches of foreign companies to appoint a UAE national service agent has been eliminated.

Published guidance has not caught up uniformly. As of September 2026 the same federal portal's step-by-step page on starting a mainland business still carries the line that businesses owned completely by non-GCC residents require a local service agent from the UAE. Service agent arrangements do survive at emirate level for certain professional licence and sole establishment structures, which are not commercial companies under the 2015 law. Read the guidance attached to the specific licence type, not the general page.

The 2018 foreign investment law went with it

Federal Law by Decree No. (19) of 2018 on Direct Foreign Investment, which governed foreign investment separately from the Companies Law, was repealed in full by Article Six. The permission now lives inside the Commercial Companies Law itself. The direction of the national list also reversed. What the Cabinet defines under Article (10) is a set of activities with a strategic impact, which is a list of what is restricted rather than a schedule of what is permitted. Emirate authorities publish their lists on the same basis. Anyone still looking for a list of approved activities is looking for an instrument of the repealed regime.

Existing companies were given a year

Article Four required companies already subject to the 2015 law to bring their position into line within no more than one year from the date the Decree came into effect, a period the Cabinet could extend for similar periods on the Minister's proposal. A company that failed to comply was to be deemed dissolved. The amended Article (357) sets the penalty for failure to adjust at AED 100 for each day of delay, calculated from the day following the expiry of the prescribed adjustment period.

Article Five is the provision that catches transactions rather than filings. While a company carries on any activity with a strategic impact, no amendment may be made to its memorandum or articles of association that affects the percentage of nationals' contribution to the company or to its board without the approval of the competent authority. Without that approval the action is void. Share transfers in restricted-sector companies sit squarely inside this.

Before you assume an activity qualifies

The licence decides this, not the law in the abstract. Abu Dhabi, Sharjah, Ajman, Umm Al Quwain and Ras Al Khaimah license through their respective Departments of Economic Development, Dubai through the Department of Economy and Tourism, and Fujairah through Fujairah Municipality. The federal portal also states the structural constraint in one line: the legal form of the business must match the business activity. The five mainland forms it lists are the general partnership, the limited partnership, the limited liability company, the public joint stock company and the private joint stock company. Since the 2020 amendments a single natural or legal person may incorporate and own a limited liability company, and the partner ceiling remains fifty.

Check the specific activity code against the restriction list published by the authority that will issue the licence, and check it on the date of application. Article (10) gives the Cabinet and that authority a standing power to change what sits on the list.