Many UAE mainland business activities historically required a UAE national (“local sponsor” or “service agent”) as part of the business structure. Here is what has changed in 2021 and what still applies.
The 2021 Commercial Companies Law Amendment
Federal Decree-Law No. 32 of 2021 fundamentally changed UAE mainland company ownership rules. Since June 2021: 100% foreign ownership is now permitted for most commercial and professional activities on the UAE mainland (Dubai DED, Abu Dhabi DED, and other emirate mainland authorities). The requirement for a 51% UAE national shareholder in most mainland companies has been eliminated. This means: for most businesses, you NO LONGER need a UAE national sponsor or partner as a mandatory equity holder in a mainland company.
When Is a UAE National Still Required?
Despite the 2021 amendments, a UAE national is still required as a mandatory partner or licence condition for: certain strategically restricted commercial activities (a reserved list published by the Ministry of Economy — includes some trading of strategic goods, certain military-related activities, certain media broadcasting activities), licensed professional activities in some regulated sectors (legal counsel to courts requires UAE national advocacy licence holder), and entities contracting with certain UAE government bodies that have Emiratisation-specific procurement policies.
Service Agent (Branch Companies and Professional Licences)
Even after the 2021 amendments, UAE branch offices of foreign companies must maintain a UAE national service agent. The service agent: does NOT hold shares in the company, is a liaison between the foreign branch and UAE government authorities, receives an annual service fee (AED 5,000–30,000 negotiated directly), and has no operational role or liability in the business. The service agent role is required under UAE Commercial Agencies Law for foreign company branches — it is separate from the abolished 51% shareholder requirement for mainland LLCs.