In the UAE, foreign franchisees often need a local partner or sponsor holding 51% for mainland businesses, while free zone setups allow 100% foreign ownership with fewer restrictions.

Because of recent reforms, in many cases you don’t need a local partner in the UAE anymore especially if your business activity is on the approved “positive list.” That means if you set up your franchise (or business) under one of those allowed sectors, you can be 100% foreign-owned full control, full profits, all yours. If your business activity is still restricted (some regulated or “strategic” sectors), a local partner or local service agent might still be legally required. So the rule now depends on what exactly you plan to do but honestly, the changes make it much easier for outsiders to start fresh in the UAE without needing to share ownership just to get started.

In the UAE, local partnership requirements vary depending on whether a franchise is set up in a mainland or free zone. For mainland operations, foreign investors traditionally needed a UAE national sponsor or partner holding 51% of the business, though recent reforms allow 100% foreign ownership in many sectors. Free zones, on the other hand, permit full foreign ownership but restrict trading directly in the mainland without a local distributor. Understanding these rules is essential for structuring ownership, ensuring compliance, and managing operational control effectively.