For years, the defining feature of a UAE mainland company was the local partner: a foreign investor could own only a minority, with an Emirati holding the majority. The reforms to the ownership rules changed that for most activities, and with it much of the reason businesses chose a free zone in the first place. But the change is not universal, and the old assumptions and the new ones both mislead if applied without checking the specific activity.
Before and after
The shift is easiest to see set against what came before it.
| Before the reform | After the reform | |
|---|---|---|
| Most commercial activities | Local majority owner required | Up to 100% foreign ownership |
| Role of a local partner | Majority shareholder | Not required for most activities |
| Strategic-impact activities | Local ownership | May still carry ownership or approval conditions |
| Free zone appeal | Full ownership was a key draw | Ownership gap narrowed; other factors now decide |
What changed, and what did not
The core change is that full foreign ownership is now available on the mainland for the large majority of commercial and industrial activities, without the local majority partner that defined the old regime. What did not change is that a defined set of activities considered to have strategic impact can still carry ownership requirements or additional approvals. The reform opened most of the door, not all of it, and the exceptions are specific rather than general.
The local sponsor is gone for most businesses, not all. The safe move is to confirm the rule for your exact activity, because both the old assumption and a blanket new one can be wrong.
Why it reshapes the mainland versus free zone choice
Full ownership used to be one of the strongest reasons to choose a free zone. Now that most mainland activities allow it too, that particular advantage has narrowed. The decision between mainland and free zone increasingly turns on other factors: direct access to the domestic market, the ability to take government contracts, the cost base, and the fit of a specific zone to the business. Ownership is no longer the deciding line it once was, which is a genuine shift in how the choice should be made.
Practical implications
For a new business, the reform means a mainland structure with full foreign ownership is now a realistic default rather than a compromise. For an existing company set up under the old rules, it may be possible to restructure the ownership to remove a local majority partner, though that is a deliberate legal step with its own process and cost. In both cases the first task is the same: confirm that the specific activity qualifies, because the exceptions are where the reform does not reach.
What to do about it
Confirm the ownership rule for your exact activity rather than relying on either the old regime or a blanket assumption that everything is now open. If you are forming a new business, weigh mainland and free zone on market access and cost, not on ownership alone, since that gap has closed for most. If you hold an older structure with a local majority partner, consider whether restructuring now makes sense. The reform is a real and welcome change, and it rewards businesses that apply it to their specific case rather than to the headline.
This article is general information and is not legal advice. Ownership rules and the list of restricted activities change and should be confirmed against current regulations. We would be glad to review your ownership and structure.