Full Foreign Ownership in the UAE and Saudi Arabia: What Investors Need to Know in 2025?

Are you planning to expand your business into the Gulf? The good news is that as of 2025, investors no longer need a local sponsor to establish companies in the UAE or Saudi Arabia for most sectors. 

 
Major reforms in foreign ownership and corporate regulations have removed longstanding Kafala rules, giving international businesses more control, flexibility, and opportunities for UAE company formation, as well as in Riyadh. 

- UAE: 100 Percent Foreign Ownership Across Most Sectors 

The UAE has long been a preferred destination for global investors, and recent reforms have made company formation in Dubai and other Emirates even easier. The Foreign Direct Investment Law of 2018 allows 100 percent foreign ownership for most business activities, eliminating the requirement for a UAE national partner holding 51 percent equity. 

- Sector-Based Considerations 

1. Retail, Trading, and Construction
Most retail and trading activities in the mainland now allow full foreign ownership. Capital requirements vary depending on the size of operations. While a local partner is no longer required, they can still provide operational or licensing support if needed. 

2. Professional Services
Consulting, legal, medical, and engineering services can operate entirely under foreign ownership, using a Local Service Agent (LSA) for administrative liaison only. The LSA does not hold equity and is typically engaged to assist with licensing, regulatory approvals, visas, and PRO services. Investors retain full legal and operational control. 

 
- Alternative Routes: Free Zones and Incentives 

For those seeking simplified setup, tax advantages, and streamlined operations, UAE free zones offer an excellent alternative. Under the One Freezone Passport program, businesses can operate across 30 participating free zones with a single license.

Benefits include zero corporate or personal income tax, full capital and profit repatriation, and simplified regulatory compliance. This makes business setup in the UAE highly attractive for multinational operations. 

- Saudi Arabia: Empowering Foreign Investors Under Vision 2030 

Saudi Arabia’s Vision 2030 reforms have also transformed the investment landscape. Foreign entities can now establish 100 percent foreign-owned companies through the Ministry of Investment (MISA) licenses, eliminating the requirement for a local sponsor. This applies across many sectors, including retail, manufacturing, professional services, and IT. 

 
- Key Requirements for Foreign Ownership in Saudi Arabia 

• MISA Licensing: Investors must obtain either a Service or Industrial License depending on their sector. 

• Capital Requirements: Minimum paid-up capital is generally SAR 500,000 for most businesses, with adjustments depending on activity type. 

• Experience and Compliance: Applicants need to demonstrate at least one year of operational experience in their home country and commit to Saudization requirements relevant to their sector. 

 
- Sector Highlights 

• Retail and E-commerce: Global brands can set up fully foreign-owned LLCs under the MISA Service License with capital as low as SAR 25,000. Companies retain full profit rights and operational control without a local partner. 

• Manufacturing: Light industry investors can establish fully foreign-owned entities with responsibilities including licensing, industrial land acquisition, and compliance with local safety and environmental regulations. 

• Professional Services: IT, consulting, legal, and engineering firms can enter as a branch or a fully owned Saudi LLC. The investor maintains full management control, with MISA assisting in interfacing with relevant ministries and professional councils. 

 
- Optional Role of Local Agents 

While a local sponsor is no longer mandatory, engaging a local agent can be advantageous for administrative, regulatory, or operational support. In both the UAE and Saudi Arabia, agents can: 

• Facilitate licensing and approvals 

• Assist with labor and immigration procedures 

• Manage customs clearance and logistics 

• Support market entry and local networking 

 
- Benefits of Full Foreign Ownership 

• Complete Control: Investors decide strategic direction, operations, and profit distribution. 

• Regulatory Certainty: Clear sector-specific licensing frameworks reduce ambiguity and streamline company formation. 

• Profit Repatriation: Both countries allow full repatriation of capital and profits. 

• Flexibility for Growth: Businesses can expand freely across sectors, invest in real estate, and leverage free zones (UAE) or industrial incentives (Saudi Arabia) without local equity restrictions. 

 
- Practical Steps for Investors 

1. Identify the appropriate licensing framework (mainland or free zone in UAE; MISA Service/Industrial License in Saudi Arabia). 

2. Confirm capital requirements and eligibility criteria for your sector. 

3. Decide whether to engage a Local Service Agent or consultant for administrative support. 

4. Complete registration, licensing, and visa procedures through official portals and regulatory authorities. 

5. Ensure ongoing compliance with labor quotas, regulatory standards, and sector-specific requirements. 

 
The Gulf’s leading markets, the UAE and Saudi Arabia, have opened doors to full foreign ownership, transforming the business landscape for international investors. For companies looking to expand regionally, these reforms simplify UAE company formation and business incorporation in Saudi Arabia, while maintaining operational control and accessing strategic markets.

By understanding sector-specific regulations and leveraging professional guidance, investors can confidently navigate the Gulf market and take full advantage of its evolving business ecosystem.