UAE Investment Procedure, Requirements for Foreign Investors

Foreign investors in the UAE can secure 100 percent ownership by following a 16-step Basherenabled licensing path, satisfying AED capital rules, and enjoying a 0–9 percent corporate tax ceiling.

The United Arab Emirates (UAE) has combined Federal Decree-Law No. 26 of 2020 (which modernized the Commercial Companies Law) with the Foreign Direct Investment Law 2018 and its Cabinet Decision No. 16 of 2020 to let most sectors move to one-hundred percent foreign ownership. These laws also ring-fence a short negative list, define activities of strategic impact, and delegate day-to-day licensing to the Department of Economic Development (DED) in each emirate.

The payoff shows in United Nations Conference on Trade and Development (UNCTAD)’s World Investment Report 2024: the UAE pulled in US$30.68 billion of FDI during 2023, a jump of almost US$8 billion from the year before, ranking second worldwide and first in West Asia at 47.1 percent of regional inflows.

Positive list, negative list, and the gray zone of strategic impact

Projects that match the Positive List include activities in the agriculture, industry, manufacturing, transport and storage, hospitality and food services, information and communications, science and technology, healthcare, education, art and entertainment, and construction. Positive list sectors qualify for full foreign ownership once they clear the standard DED process.

Everything on the Negative List keeps sector-specific restrictions or extra federal controls. Strategic-impact activities, such as telecoms or defense, sit between the two extremes: they are not prohibited, but they demand a second-layer approval from the sector regulator, which may set Emirati equity or board quotas under Article 10 of the Foreign Direct Investment (FDI) Law.

Other barred fields, such as military manufacturing, Hajj and Umrah services, or medical retail trading, appear in full in Article 4 of the FDI Law’s schedule.

Choosing how to incorporate: Digital or conventional

Investors can register entirely online through the federal Basher platform, which stitches together local and federal databases so that a trade name, initial approval, and commercial license issue in minutes, according to the Ministry of Economy. Conventional filing remains available at each emirate’s DED service center, useful when a venture involves complex leases, construction approvals, or multiple regulators.

A step-by-step journey of investment in the UAE

A foreign entrepreneur normally begins by pinpointing the activity code on the Positive List and confirming that the chosen legal form, limited liability company, private joint-stock company, or their sole-proprietorship variants, fits DED rules. The nominal capital, expressed in dirhams, must meet any activity-specific floor and be divided into shares of at least one dirham each. Foreign capital may be cash, reinvested UAE profits, securities, or intangible rights such as patents; in-kind contributions follow the valuation method in the Companies Law.

Next comes the trade-name reservation. The name must end with the legal form plus “Foreign Direct Investment (FDI),” steer clear of government titles or religious terms, and reflect the chosen activity.

With those basics set, the investor files an initial-approval request. The packet usually holds passports or Emirates IDs, draft articles and memorandum of association, and a feasibility study. If the activity is regulated, private health care, for example, the file also includes pre-clearance from the Ministry of Health. The General Directorate of Residency and Foreigners Affairs must sign off before DED can grant the initial nod.

An actual premises lease is mandatory, and the municipality’s land-allocation rules will dictate size and zoning. The investor then submits a full license application, attaching the signed constitutional documents and, if relevant, the parent company’s memorandum for a branch. DED circulates the file to any remaining regulators and, by statute, must decide within five business days once documents are complete. Silence after that period counts as a refusal, forcing the applicant to refile or appeal.

After receiving the FDI company license, the entrepreneur opens a local bank account and deposits at least twenty percent of the stated capital. It is the duty of the auditors to certify that the remainder investment amount arrives within two years. The company is then registered with the Ministry of Economy and the emirate’s Chamber of Commerce, followed by a brief written notice to DED when operations or production actually begin.

Branch offices of foreign companies face a nearly identical timeline, but must add an attested board resolution, passport copies, and, where the manager already lives in the UAE, a no-objection certificate from the current sponsor.

Tax and other benefits after the ribbon-cutting

Corporate income earned from June 2023 forward is taxed at 0 percent on the first AED 375,000 (US$102,109.7) of taxable profits and 9 percent thereafter. All entities must register with the Federal Tax Authority and file electronic returns within nine months of the end of the relevant financial period. The UAE imposes no withholding tax on dividends, interest or royalties, preserving cashflow efficiency for crossborder groups.

The Commercial Companies Law permits a single natural or legal person to own a limited liability company, with liability capped at the subscribed capital. Neither the chairman nor a majority of board members must be Emirati nationals unless the Council of Ministers or a sector regulator imposes that condition for strategicimpact activities. Foreign investors may also take full control of board seats in public jointstock companies unless a later cabinet resolution states otherwise.

An FDI company also enjoys national treatment under Article 11 of the FDI Law. Article 14 shields projects from expropriation, attachment or license cancellation except for public interest and against fair compensation. Should a license be revoked for breach of conditions, the company has 30 days to appeal in local courts. The law further guarantees confidentiality of technical and financial information submitted to regulators.

The UAE layers additional benefits onto the statutory guarantees. NextGenFDI, a joint publicprivate initiative, offers cuttingedge technology firms expedited visas, subsidized office space and assistant for onboarding. FDI companies and their employees may freely repatriate profits, liquidation proceeds, and salaries. They are protected under confidentiality arrangement which extends to commercial information provided during licensing.

Looking ahead

The Ministry of Economy highlights sixteen highgrowth niches, fintech, ecommerce, agritech, health care, education, tourism, space, logistics services, information and communications technology, manufacturing, medical tourism, renewable energy, media and entertainment, creative industries, gaming and smartcity solutions, where freezone incentives and federal accelerators converge to attract inbound capital.

Once an activity aligns with the positive list, the process advances in a welltimed arc with tradename reservation, initial approval, premises, final license, capital injection and federal registration, backed by guarantees against expropriation and an investorfriendly tax regime. Thus, the UAE presents a lucrative destination for global capital.

(AED 1 = US$3.67)

• Previous Article The EU and UAE CEPA Negotiations: Gateway to Deeper Gulf-Europe Integration
• Next Article