Exploring New UAE Investment Laws:
Opportunities for Foreign Investors

The UAE has long been regarded as a top business and investment destination, boasting a strategic position, a stable economy, and an abundance of opportunities. In recent years, however, the country has taken major steps to attract more foreign investors by implementing a series of changes aimed at improving the business climate. These initiatives aim to diversify the UAE’s economy, lessen its dependency on oil, and improve its status as a worldwide economic hub.

In this article, we explore the latest updates to the UAE’s investment laws and how they create exciting opportunities for foreign investors.

1. 100% Foreign Ownership in More Sectors.
One of the most significant changes implemented by the UAE government is the allowance for 100% foreign ownership in a broader range of industries. Historically, foreign investors had to collaborate with a local sponsor or shareholder who owned at least 51% of the company. However, beginning in 2021, the UAE has gradually eliminated this limitation, allowing foreign investors to own 100% of their enterprises in various mainland sectors.

This action is part of the country’s larger efforts to attract foreign investment, foster innovation, and reduce its reliance on oil. The change has been especially welcomed by international corporations seeking to establish a direct presence in the UAE without the necessity for a local partner. The policy applies to a variety of areas, including:

• Real Estate: Foreign investors can now purchase and own property in mainland areas without a local partner, further enhancing the attractiveness of the UAE’s real estate market.
• Retail & Wholesale Trade: International retail brands can now enter the UAE market with complete control over their operations, making it easier for global retailers to expand.
• Manufacturing & Industry: With new opportunities in sectors like manufacturing and logistics, foreign investors can set up factories and industrial plants in the UAE, contributing to the nation’s economic diversification.
• Technology & IT: The UAE continues to position itself as a regional leader in tech innovation, with many international tech firms able to establish 100% owned subsidiaries in key sectors such as artificial intelligence, software development, and fintech.

2. The expansion of free zones with additional benefits.
While the loosening of foreign ownership requirements on the mainland is a game changer, the UAE’s free zones remain an important aspect of the investment environment. These zones provide numerous benefits, including 100% foreign ownership, tax breaks, and minimum bureaucratic barriers. The UAE has constantly expanded and enhanced its free zone offers, with new zones being developed to match the demands of changing industries.

Key benefits of free zones include:

• Full Foreign Ownership: Investors can own 100% of their business in a free zone without the need for a local sponsor or partner.
• Tax Exemptions: Many free zones offer corporate tax holidays for a number of years, along with exemptions from import/export duties, making them ideal for businesses engaged in international trade.
• Simplified Processes: Business setup processes in free zones are streamlined, with fast-track licensing and fewer regulatory requirements. This makes it easier for businesses to establish a presence in the UAE quickly.

Some of the most prominent free zones in the UAE cater to specific industries, such as technology (Dubai Silicon Oasis), media (Dubai Media City), and healthcare (Dubai Healthcare City). With the UAE’s continued investment in free zone infrastructure, foreign investors have more opportunities than ever to establish and grow their businesses.

3. New Initiatives for the Start-up Ecosystem.
As part of its broader diversification strategy, the UAE is actively encouraging the expansion of its start-up ecosystem. The government has established various measures to recruit innovative start-ups, particularly in technology, finance, and green energy.

For example, the UAE has established dedicated incubators and accelerators to assist early-stage start-ups with finance, mentorship, and resources. Entrepreneurs benefit from initiatives such as the Mohammed Bin Rashid Innovation Fund, while the Dubai Future Foundation serves as a platform for innovative enterprises to access cutting-edge technology and resources.