Updated August 2026. Federal Law No. 32 of 2021 on Commercial Companies — the UAE Commercial Companies Law (CCL), effective 2 January 2022 — is the primary statute governing the incorporation, operation, and dissolution of commercial companies on the UAE mainland. Issued in replacement of the prior Federal Law No. 2 of 2015, the CCL introduced transformative reforms including 100% foreign ownership in most sectors, reduced minimum share capital requirements, enhanced corporate governance standards for joint stock companies, and streamlined liquidation procedures. Mainland company formation costs range from AED 15,000 for a simple LLC to AED 150,000+ for a Public Joint Stock Company (PJSC), with ongoing annual compliance costs of AED 20,000–300,000.
- Federal Law No. 32 of 2021 allows 100% foreign ownership in most mainland sectors, eliminating the historical 51% UAE national ownership requirement for most activities.
- An LLC can be formed with a single shareholder (sole proprietor LLC) and there is no statutory minimum share capital for most sectors — capital is set by the founders.
- A PJSC requires a minimum share capital of AED 30,000,000 and at least 55% of shares offered to the public; a PrJSC requires a minimum of AED 5,000,000.
- Branch offices of foreign companies can be registered with 100% foreign ownership through the UAE Ministry of Economy, with an annual licence fee of approximately AED 15,000–25,000.
- The CCL imposes enhanced corporate governance obligations on PJSCs — including independent directors, audit committees, and annual general meeting requirements — with SCA oversight.
Overview of Federal Law No. 32 of 2021
Federal Law No. 32 of 2021 on Commercial Companies entered into force on 2 January 2022, replacing Federal Law No. 2 of 2015 and its amendments. The CCL regulates commercial companies incorporated on the UAE mainland under Department of Economic Development (DED) licences and applies to all forms of legal entity: Limited Liability Companies (LLCs), Public Joint Stock Companies (PJSCs), Private Joint Stock Companies (PrJSCs), General Partnerships, Limited Partnerships, and Simple Commandite Companies. The law does not apply to entities incorporated exclusively within financial free zones (ADGM, DIFC) which have their own company law frameworks.
Key reforms in the 2021 CCL include: (1) 100% foreign ownership permitted for most activities without a UAE national sponsor, subject to a Negative List of restricted sectors maintained by the Ministry of Economy and sector regulators; (2) single-shareholder LLCs allowed (previously two shareholders were required); (3) relaxed minimum capital requirements; (4) strengthened director liability rules and corporate governance requirements for listed companies; (5) expedited liquidation procedures; and (6) electronic shareholder meetings and e-voting for PJSCs.
Limited Liability Companies (LLC) Under the CCL
The Limited Liability Company (LLC) is the most popular vehicle for foreign investment on the UAE mainland. Under the CCL, an LLC can have between 1 and 50 shareholders and there is no statutory minimum share capital for most commercial activities — capital is set by the shareholders based on the business activity and DED requirements (some activities such as insurance intermediary or financial advisory have sector-specific minimums). Liability is limited to the shareholder’s capital contribution.
An LLC must have a Memorandum of Association (MoA) attested by the UAE Notary Public, a trade licence issued by the DED of the relevant emirate, and a physical registered office address in the UAE. The LLC is managed by one or more managers appointed in the MoA or by a separate management resolution — managers need not be shareholders. The CCL requires that LLCs maintain proper books of accounts but does not mandate annual audited accounts for private LLCs (though the Corporate Tax Law now requires audited financial statements for LLCs with revenue above AED 50 million).
LLC formation costs (Dubai DED): trade name reservation AED 620–1,050; initial approval AED 100–300; MoA drafting and notarisation AED 1,500–3,000; trade licence first year AED 5,000–20,000 (varies by activity); establishment card (immigration) AED 2,000–3,500; total first-year setup AED 10,000–30,000 for a basic LLC. Visa quota depends on office space leased — 1 visa per 9 sqm is the standard ratio.
Public Joint Stock Companies (PJSC)
A Public Joint Stock Company (PJSC) — designated by the suffix “PJSC” or “(Public)” — is the vehicle for companies that list their shares on a UAE stock exchange (DFM, ADX, or NASDAQ Dubai). Under the CCL, a PJSC requires: minimum share capital of AED 30,000,000; at least 55% of shares offered to the public through an Initial Public Offering (IPO) within two years of incorporation; a minimum of 10 founding shareholders (who retain up to 45% during the IPO lock-up); and registration with the Securities and Commodities Authority (SCA).
PJSCs are subject to full SCA corporate governance requirements: independent directors comprising a majority of the board; a mandatory Audit Committee; a Nomination and Remuneration Committee; annual audited financial statements compliant with IFRS; and an Annual General Meeting (AGM) to be held within 4 months of the financial year end. SCA’s Corporate Governance Rules (Board Resolution No. 7/R.M of 2016, updated 2024) apply to all listed PJSCs. SCA annual registration fees: AED 15,000–50,000 depending on market capitalisation. PJSC formation is typically a 6–18 month process involving SCA pre-approval, regulatory prospectus review, and IPO roadshow.
Private Joint Stock Companies (PrJSC)
A Private Joint Stock Company (PrJSC) — designated “PJSC (Private)” — is a closed joint stock company that does not offer shares to the public. It requires a minimum of 3 shareholders and minimum share capital of AED 5,000,000. PrJSCs are an intermediate vehicle between LLCs and listed PJSCs — they allow share capital divided into transferable shares, making them suitable for pre-IPO structures, employee share ownership plans (ESOPs), and larger family businesses seeking to formalise governance. PrJSCs do not require SCA registration or public prospectus — they are registered with the relevant emirate’s DED.
PrJSC formation costs: similar to LLC but with higher DED registration fees (AED 10,000–30,000 in licence fees depending on activity) plus capital verification by a UAE-licensed auditor (AED 10,000–25,000). Annual compliance includes audited IFRS financial statements, shareholder meetings, and maintained board resolutions.
Foreign Branch Offices and Representative Offices
A foreign company may establish a Branch Office on the UAE mainland by registering with the UAE Ministry of Economy (for federal activities) or with the relevant emirate’s DED (for local activities). A Branch Office is not a separate legal entity — it is an extension of the foreign parent and the parent bears unlimited liability for the branch’s obligations. The branch must appoint a UAE-resident General Manager (not necessarily a UAE national) and obtain a National Service Agent (NSA) — though the NSA role under the 2021 CCL reforms no longer carries profit-sharing rights; it is purely an administrative arrangement for a flat annual fee of AED 15,000–30,000.
A Representative Office may also be registered to undertake market research and promotional activities on behalf of the parent — it may not conduct revenue-generating commercial activities. Branch and representative office annual licence fees: MoE federal activity licence AED 15,000–25,000 per year; emirate DED local licence AED 8,000–20,000 per year. The NSA fee is additional (AED 15,000–30,000 per year). Total annual operating cost for a UAE branch: AED 40,000–80,000 in government fees alone.
100% Foreign Ownership: Sectors and Rules
The 2021 CCL eliminated the mandatory 51% UAE national ownership requirement for most commercial activities. Cabinet Resolution No. 55 of 2021 (the Positive List / Amended Foreign Ownership List) permits 100% foreign ownership across a broad range of sectors including manufacturing, logistics, trading, IT, professional services, and hospitality. Sectors requiring UAE national participation (the Negative List or restricted sectors) include: oil and gas exploration, onshore oil production, gas distribution, water production and distribution, certain military and defence activities, recruitment agencies, and a small number of media activities.
Sector-specific ownership restrictions may also apply under regulations from sector regulators — the Central Bank of the UAE (banks and finance companies), the Securities and Commodities Authority (listed companies), and the Telecommunications and Digital Government Regulatory Authority (TDRA) — regardless of general CCL provisions. UAE nationals or UAE-incorporated entities may still be required as channel partners or distributors in certain regulated sectors even where direct foreign ownership is permitted.
UAE CCL Setup and Compliance Costs 2026
| Activity | LLC | PrJSC | PJSC (Listed) | Branch Office |
|---|---|---|---|---|
| Government Formation Fees | AED 10,000–25,000 | AED 20,000–50,000 | AED 50,000–200,000 | AED 20,000–50,000 |
| Minimum Share Capital | None (sector-specific) | AED 5,000,000 | AED 30,000,000 | N/A |
| Annual Trade Licence Renewal | AED 5,000–20,000 | AED 10,000–30,000 | AED 15,000–50,000 | AED 15,000–30,000 |
| Annual Audit (IFRS) | AED 15,000–100,000 | AED 50,000–200,000 | AED 150,000–500,000 | AED 20,000–100,000 |
| Legal/Company Secretary | AED 10,000–30,000 | AED 20,000–60,000 | AED 100,000–300,000 | AED 10,000–30,000 |
| Corporate Tax Registration | AED 0 (free via EmaraTax) | AED 0 | AED 0 | AED 0 |
| Estimated Total Annual Compliance | AED 30,000–150,000 | AED 80,000–300,000 | AED 300,000–1,000,000+ | AED 45,000–160,000 |
CCL vs Free Zone: Key Differences
The mainland CCL structure and UAE free zone entity differ in four critical dimensions. Jurisdiction: a mainland LLC operates under the CCL and trades freely anywhere in the UAE and internationally; a free zone entity operates under free zone authority regulations and must use a mainland distributor or branch to sell directly to UAE mainland customers. Ownership: both allow 100% foreign ownership, but the historical distinction (mainland required UAE partner; free zone did not) has been eliminated by the 2021 CCL reforms. Tax: the UAE 9% corporate tax applies to both, but free zone QFZPs may benefit from 0% on Qualifying Income — not available to mainland LLCs. Licence cost: mainland DED licences are generally more expensive (AED 10,000–30,000/year) than many free zone licences (AED 5,000–15,000/year) but free zones may require minimum office space rentals.
Can a single foreign investor own 100% of a UAE mainland LLC?
Yes, since the 2021 CCL amendments. A single foreign individual or foreign company can own 100% of a UAE mainland LLC for most commercial activities without a UAE national partner, sponsor, or agent. The historic 51% UAE national requirement was eliminated for all activities not on the Restricted/Negative List. Restricted sectors (oil production, water/gas distribution, some defence activities) still require UAE national participation at levels specified by sector regulators.
What is the minimum capital for a UAE mainland LLC?
There is no statutory minimum share capital for a general commercial LLC under the 2021 CCL — the founders determine the appropriate capital based on business needs. However, sector-specific minimum capital requirements apply for regulated activities: insurance intermediary (AED 3,000,000), investment adviser (AED 1,000,000), pharmaceutical trading (AED 500,000), healthcare facility (varies by emirate). DED may also require evidence of adequate working capital during the licence application review.
What are the ongoing annual obligations of a UAE mainland LLC?
Annual LLC obligations include: trade licence renewal with the DED (must be completed before expiry to avoid penalties); renewal of establishment card and any employee residence visas; MOHRE payroll registration and WPS compliance; Corporate Tax registration (if not already done) and annual CT return filing within 9 months of year end; VAT return filing (quarterly or monthly, if VAT-registered); beneficial ownership register update filing with the DED; and maintenance of proper books of accounts and supporting documents for 7 years.
How long does it take to incorporate a UAE mainland LLC?
Incorporating a mainland UAE LLC in Dubai typically takes 3–7 business days for activities approved on the standard DED activity list. Complex activities requiring sector regulator NOC (e.g., medical, financial services, education) can take 2–8 weeks. The process involves: trade name reservation (1 day); initial approval (1–2 days); MoA notarisation (1–2 days); DED licence issuance (1–2 days); and post-licence registration (municipality, immigration establishment card) (3–5 days). Using a registered formation agent or corporate service provider can streamline the process.
Can a UAE company have a sole director who is also the sole shareholder?
Yes, for LLCs and PrJSCs. A single-shareholder LLC under the 2021 CCL may also have its sole shareholder act as the manager (equivalent of director). There is no requirement for an independent director or separate manager in a private LLC. For PJSCs, the CCL and SCA regulations require a board of at least five directors, with a majority being independent directors and the chairman being different from the CEO. For LLCs, directors/managers can be any nationality — UAE residency is not required for the manager role, though a UAE-resident contact person is required for government correspondence.