France-UAE Business Ties: Why French Companies Are Expanding in the UAE

French companies in the UAE have passed 11,000, up 44 percent in 2025, as France–UAE ties deepen across AI, defence, and energy. With 9 percent corporate tax, 100 percent  foreign ownership, and gateway access to the Gulf and beyond, the Emirates has become a fast, low-barrier base for European firms.

The number of French companies operating in the UAE has surpassed 11,000, following a 44 percent rise in registrations during 2025 that has continued into 2026. The growth reflects deepening France–UAE cooperation across artificial intelligence, defence, and energy, alongside a UAE operating environment that has steadily lowered the barriers to foreign market entry.

The milestone was confirmed during a meeting between Abdulla bin Touq Al Marri, the UAE’s Minister of Economy and Tourism, and Serge Papin, France’s Minister for SMEs, Trade, Crafts, Tourism and Purchasing Power, held on the sidelines of VivaTech 2026 in Paris.

For European businesses assessing a Gulf presence, the figures are a useful indicator of how far the practical conditions for market entry have improved.

France–UAE relations by the numbers (2026)

A 44 percent increase in company registrations over a single year reflects more than commercial momentum. It follows a bilateral relationship that has deepened across defence, energy, finance, and, most recently, artificial intelligence, supported by a UAE business environment that has become considerably more accessible to foreign companies.

France is already among the UAE’s most significant European partners, ranking as the UAE’s fourth-largest trading partner within the EU and its third-largest EU source of imports on 2023 figures. That commercial base is reinforced by several of the largest government-to-government agreements either country has concluded. The defence relationship is anchored by a Rafale fighter-jet agreement valued at approximately EUR 16.6 billion (US$18 billion) for 80 aircraft, with the UAE inducting its first Rafale into service in early 2025 — among the most substantial military deals in the history of the two nations’ ties.

For companies determining where to base regional operations, the depth of this relationship carries practical weight. Close intergovernmental ties tend to bring supporting infrastructure with them, including investment protections, more efficient visa and licensing channels, active bilateral business councils, and a shared interest in resolving administrative friction. Where governments are closely aligned, market entry generally carries lower risk.

The France–UAE AI agreement: a new pillar of cooperation

The most notable recent development is the speed with which artificial intelligence has become central to the relationship. In February 2025, France and the UAE signed a Framework for Cooperation in Artificial Intelligence, the centrepiece of which is an “AI campus” in France built around a data centre of up to one gigawatt of capacity. The associated investment is estimated at between EUR 30 billion and EUR 50 billion (US$32–54 billion), and the facility has been described as the largest of its kind in Europe. The framework was signed at the Élysée Palace following a meeting between UAE President Sheikh Mohamed bin Zayed Al Nahyan and French President Emmanuel Macron.

That project sits within a broader Emirati commitment to invest up to US$56.4 billion in French data-centre capacity, targeting as much as 1.4 gigawatts. The commercial relationship underpinning it became clearer in May 2025, when Abu Dhabi’s G42 and the French AI developer Mistral agreed to collaborate across the AI value chain, from model training to infrastructure. The rationale is complementary: European AI firms hold considerable research capability but face structural constraints in financing the energy and computing capacity that advanced AI requires, while Gulf investors are seeking long-term positions in strategic infrastructure. President Macron’s return visit to Abu Dhabi in December 2025 indicated that this represents a sustained strategic alignment rather than a single announcement.

For European companies, the implications are twofold. Capital is now moving in both directions, with Emirati investment entering French infrastructure and French firms and expertise establishing in the Emirates. The cooperation also extends beyond bilateral ties into the wider EU–UAE trade negotiations, which have addressed artificial intelligence, green hydrogen, and foreign direct investment. A French company establishing in the UAE today is therefore positioning itself within a corridor that continues to widen at the policy level.

Why European companies are choosing the UAE

If the strategic relationship explains the confidence behind the trend, the operating environment explains its scale. Several features of the UAE consistently attract European businesses.

A competitive tax position. The UAE levies no personal income tax, and its federal corporate tax is set at 9 percent, which remains low by European standards. Qualifying income in many free zones is still taxed at 0 percent, subject to substance and compliance requirements.

Full foreign ownership. Reforms now permit 100 percent foreign ownership across most mainland activities, removing the former local-partner requirement and giving European investors direct control of their entities.

A regional gateway. The UAE functions as a hub into the wider Gulf and onward into Africa and South Asia, supported by an expanding network of trade agreements. For a French exporter or services provider, a UAE base offers access to several markets rather than one.

Speed and infrastructure. Company formation, particularly through the free zones, is rapid and largely digital, and is supported by established logistics, banking, and connectivity infrastructure.

It is notable that the VivaTech meeting at which the 11,000 figure was confirmed was themed on translating artificial intelligence into measurable economic impact — precisely the technology, advanced-manufacturing, and services activity in which French firms are well represented.

Which businesses should take note

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The trend is broad-based, though the strongest alignment is clear. Technology and AI companies represent an evident cohort, given the infrastructure partnerships now connecting the two economies. Energy and clean-technology firms correspond to the green-hydrogen and energy-transition elements of the EU–UAE agenda, while defence and aerospace suppliers follow the industrial activity associated with the Rafale programme.

Beyond these sectors, a substantial group of small and medium-sized enterprises (in luxury goods, food and beverage, professional services, healthcare, and engineering) are finding that the Gulf’s purchasing power and stability justify establishing a regional base.

Companies in other EU economies may reasonably read the trend as an indicator rather than a specifically French phenomenon. A concentration of one major European economy’s firms in a single market at this rate generally signals that the practical barriers (banking, licensing, profit repatriation, and talent mobility) have eased sufficiently to accommodate mid-sized companies, not only large multinationals.

Establishing in the UAE: Key considerations for European businesses

Several matters warrant early assessment. The choice between a free zone and a mainland structure determines ownership, tax treatment, and the ability to trade directly within the UAE market, and should be matched to the company’s revenue model rather than selected by default.

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Corporate tax registration and the substance requirements attached to free-zone benefits should be understood before incorporation. Residency planning, including the UAE Golden Visa routes available to investors and senior professionals, affects how founders and key personnel relocate. Companies should also consider how a UAE entity fits within their wider European and tax structuring, particularly where multiple jurisdictions or shareholders are involved.

These are decisions rather than obstacles, and addressing them correctly at the outset helps avoid more costly restructuring later. The presence of more than 11,000 French companies indicates an established route into the market; the 44 percent increase indicates that it is becoming more active.

For European businesses considering a Gulf presence, an early assessment of the appropriate structure, tax position, and residency route can determine whether market entry proceeds smoothly or incurs avoidable cost.

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