How to Transfer a UAE Free Zone Company to a New Shareholder 2026
Transferring ownership of a UAE free zone company — whether selling 100%, adding a co-investor, or restructuring shareholders — requires formal approval from the free zone authority. This guide covers the complete share transfer process for UAE free zone companies in 2026.
Types of Ownership Transfers
- Full sale: 100% of shares transferred to a third-party buyer
- Partial sale: some shares sold, other shareholders retained
- Gift/inheritance: shares transferred to family member or heir
- Corporate restructuring: shares transferred between related entities
- Investor entry: new shares issued to bring in a co-investor (dilution)
Share Transfer Process
- Step 1: Review the MOA for transfer restrictions and pre-emption rights (existing shareholders have right of first refusal in most MOAs)
- Step 2: Draft Share Purchase Agreement (SPA) detailing the transaction
- Step 3: Due diligence by incoming shareholder: verify trade licence validity, outstanding fees, bank account, contracts, and liabilities
- Step 4: Board/shareholder resolution approving the transfer
- Step 5: Submit transfer application to free zone with all required documents
- Step 6: Free zone authority reviews (typically 5–15 business days)
- Step 7: Updated MOA and share certificate issued to new shareholder
- Step 8: Update bank account signatories if required
Required Documents for Share Transfer
- Signed and notarised Share Purchase Agreement
- Board resolution approving the transfer
- Passport copies of incoming and outgoing shareholders
- Emirates ID of UAE-resident shareholders
- Free zone transfer application form
- Payment of free zone transfer fee (AED 500–2,000)
- If transferring to a corporate entity: company documents of the acquiring entity
Seller Tax Implications (UAE CT)
UAE individual shareholders: no UAE CT or capital gains tax on share sale proceeds. UAE corporate shareholders: gain on disposal of shares may qualify for the participation exemption (0% CT) if holding period was 12+ months and ownership was 5%+. Consult a UAE CT adviser to confirm eligibility for participation exemption in your specific case.
Post-Transfer Steps
After the free zone approves the transfer: update the UAE company’s bank account mandate (add new signatory, remove old), update any power of attorney arrangements, notify existing commercial contracts parties if change of ownership is material, and file UBO register update (within 15 days of the ownership change — mandatory under UAE UBO regulations).