UAE mainland companies: ownership, licensing and the rules that still apply

Licences are issued by type of activity: commercial for trading, professional for services provided on the basis of qualifications, industrial for manufacturing, and others for tourism and specific sectors. The activity on the licence determines what the company may do, which other approvals it needs, how many visas it can obtain and how it is treated for some regulatory purposes. Adding activities later is possible, but some combinations are not permitted on one licence.

Company law obligations also apply in full: annual accounts, audit where required, general assembly decisions, and directors' duties and liability under Federal Decree-Law No. 32 of 2021. The licence must be renewed every year, and renewal depends on a valid lease, current approvals and no outstanding violations.

Many mainland companies formed before 2021 still have a UAE national holding 51% of the shares on paper, with side agreements, powers of attorney or pledged dividends giving the foreign partner control and the economics. These arrangements carried risk even when they were common: side agreements may be unenforceable, the nominal partner has legal rights as a shareholder, and the structure misstates the beneficial ownership that must now be disclosed.

Where the activity now allows full foreign ownership, the clean solution is to transfer the shares, amend the memorandum of association with the licensing authority and update the beneficial ownership register. That requires the nominal partner's cooperation and usually a settlement of whatever fee arrangement existed. It is worth doing deliberately rather than waiting for a dispute, a bank's KYC review or a beneficial ownership inspection to force the question.

Mainland licences are issued emirate by emirate, and the choice of emirate matters more than many first-time investors expect. A company licensed in one emirate that wants a physical presence or regular operations in another typically needs a branch licence there, with its own premises and fees. Government entities often prefer, and sometimes require, suppliers licensed in their own emirate, so a company targeting Abu Dhabi government work may need an Abu Dhabi licence even if its main office is in Dubai.

Dubai offers the largest commercial market, the deepest pool of service providers and a well-developed licensing process through the DET, at a higher cost of premises. Abu Dhabi is the seat of federal government and of much of the energy and public sector spending, with ADDED and the Abu Dhabi Registration Authority as the licensing route. Sharjah and the northern emirates offer lower costs and suit manufacturing, logistics and businesses with lighter client-facing needs. The practical approach is to license where the main customers and staff are, and add branches as the business genuinely extends, rather than to choose the cheapest emirate and discover later that the work is somewhere else.

The Commercial Companies Law was amended again with effect from 1 January 2026 by Federal Decree-Law No. 20 of 2025, in ways that matter for investors in mainland LLCs. The amendments allow multiple classes of shares with different rights, recognise drag-along and tag-along provisions in the constitutional documents, clarify the rules for contributions in kind to capital, and open a route for re-domiciliation of companies between jurisdictions, including between the mainland and free zones.

For foreign investors these changes bring mainland LLCs closer to what they could previously achieve only in a free zone or a common-law financial centre: investor-friendly share structures and exit rights written into the company's own documents rather than in side agreements. Companies with outside investors, or planning to raise capital, should review their memorandum of association against the new options, and groups considering moving an entity between the mainland and a free zone should look at re-domiciliation before liquidating and re-forming.