UAE Business Setup: Ownership Rules, Visa Regulations, and Permitted Activities Explained

The UAE continues to solidify its position as a global hub for investment, but before launching your business, it’s critical to understand the framework you’ll operate within. From ownership rights to visa eligibility and permitted activities, aligning your structure with UAE regulations is key to sustainable growth.

This guide covers the three most important elements every entrepreneur must understand before setting up: ownership restrictions, visa regulations, and business activity licenses.

1. 🏢 Ownership Restrictions: What You Can (and Cannot) Own

Free Zone vs. Mainland Ownership

The UAE offers two primary jurisdictions for company formation:

• Free Zones – Offer 100% foreign ownership from the outset. No need for a local partner or service agent.

• Mainland – Historically required 51% local ownership, but that has changed for most sectors.

Recent Reforms: 100% Ownership on the Mainland

As of the latest legal amendments, foreign investors can now fully own businesses on the Mainland in most non-strategic sectors. These include:

• Retail

• Manufacturing

• Real estate

• E-commerce

• Hospitality and more

However, industries deemed strategic (such as oil & gas, telecommunications, and military-related sectors) still require local shareholding or partnerships.

🔍 Tip: Always confirm ownership eligibility with the Department of Economic Development (DED) or the relevant Free Zone Authority before incorporating.

2. 🛂 Visa Regulations: Who Can Work and Live in the UAE?

The UAE’s visa system is tightly linked to your business structure and office location. Here’s how it works:

Types of UAE Visas for Business Owners and Staff

• Investor Visa – For business owners and shareholders. Typically valid for 3 years, with renewal options.

• Employment Visa – For employees hired under your trade license, based on job role and company quota.

• Dependent Visa – For sponsoring spouses, children, and domestic workers under your residency.

Free Zone Visa Advantages

Free Zones are known for:

• Streamlined visa processes

• Flexible quotas (especially with larger office space)

• Faster turnaround on approvals and renewals

Mainland visa quotas are often based on the size of your physical office, typically allowing 1 visa per 8–10 sqm.

3. 🧾 Permitted Business Activities: What You’re Allowed to Do

License Categories

To operate legally, every business in the UAE must apply for a license aligned with its core activity. These include:

• Commercial License – For trading goods or general commerce

• Professional License – For services such as consulting, legal, design, healthcare, or education

• Industrial License – For manufacturing and production

• Tourism License – For travel-related services

Mainland vs. Free Zone: Activity Flexibility

• Free Zones often specialize by industry (e.g., media, logistics, tech) and may restrict certain B2C or commercial activities.

• Mainland licenses offer broader activity scope and full access to the UAE domestic market, including government contracts and retail operations.

For example:

A software development firm may thrive in Dubai Internet City, while a B2C beauty brand looking to open physical stores will benefit more from a Mainland license.

🧠 Final Thoughts

The success of your business in the UAE depends heavily on understanding and complying with the legal structure, visa regulations, and licensing framework. Whether you choose the industry focus and tax benefits of a Free Zone or the market access and expansion potential of the Mainland, each choice comes with its own strategic implications.

Making the right call early can help you avoid delays, cut unnecessary costs, and scale more effectively.

🚀 Ready to Launch Your UAE Business?

Use LicenseMarket to compare Free Zones, check license pricing, and receive expert guidance in choosing the right business setup.

👉 Visit www.licensemarket.ae — your fast, clear, and hassle-free path to UAE business formation.