100% foreign ownership does not make a UAE acquisition legally simple

Foreign investors can fully own companies across a wide range of UAE economic activities, subject to the activities identified by the competent local authorities and the framework for activities with strategic impact. For an acquisition, however, the relevant question is narrower: can this buyer own and control this specific target, carrying this specific licence, under this regulator?

That distinction matters for regulated and strategic activities, where sector approvals, ownership parameters or governance conditions can become part of the transaction timetable. It is therefore risky to promise a completion date in an LOI before the target's licensing and regulatory position has been screened.

Under the UAE beneficial-owner framework, the starting test generally looks to the natural person who ultimately owns or controls 25% or more of the capital or voting rights, including through indirect ownership chains or other means of control. The rules also require beneficial-owner records to be kept current.

For acquisitions, this matters because ownership changes can require statements on whether the transfer changes the beneficial owner and, where relevant, updated beneficial-owner information. Complex holding structures should therefore be mapped early rather than reconstructed when the transaction is ready to complete.

A target can report attractive revenue and margins while a material part of that value is conditional on contracts that do not automatically survive a change of control. Customer, supplier, financing, distribution, franchise, lease and technology agreements can contain consent, termination, pricing, exclusivity or control-change provisions.

Due diligence should therefore go beyond confirming that a contract exists. It should test whether it survives the transaction, whether consent is required, whether economics change, whether termination rights arise, and whether the commercial relationship depends personally on the seller.

A contract generating AED 10 million of annual revenue is not worth the same to the buyer if the counterparty can exit when ownership changes.

Agreeing valuation is not the same as allocating transaction risk. The acquisition agreement may need to deal with conditions precedent, regulatory approvals, warranties, indemnities, disclosure, completion accounts or locked-box mechanics, escrow or retention, non-compete obligations, change-of-control consents and post-completion actions.

The objective is not a longer document. It is to ensure that issues found in diligence are translated into price, structure, responsibility or completion conditions. A risk discovered but not reflected in the deal is merely a well-documented surprise.

The legal points in this guide have been checked against official UAE sources current to 23 October 2026. Transaction teams should still obtain matter-specific advice because the applicable regime depends on the target's activity, regulator, legal form, ownership chain and deal structure.