Want To Start an AI Company in the UAE? Here’s What To Know.

The UAE is pushing to be a global leader in artificial intelligence. And it’s already making waves. To name just a few feats, its $100 billion fund in AI investment in the UAE, MGX, is investing in AI companies and data centers worldwide while building up the UAE’s capacities at home.

Microsoft’s $1.5 billion investment in Abu Dhabi’s G42 is meanwhile just one of many local partnerships. The slew of deals are part of the UAE’s AI 2031, a national strategy to double down on breakthrough technology and transform the gulf country into a rising AI power.

To pull off such an ambitious feat, the UAE needs foreign talent. Luckily, establishing a business in the UAE as a foreigner has gotten much easier in recent years.

Looser restrictions and more benefits means there’s never been a better time to invest. Below we’ve broken down everything you need to know about starting an AI company as a foreigner in the UAE.

Read more about: What Is The 2031 UAE National AI Strategy ?

Can Foreigners Fully Own an AI Company in the UAE?

In short: yes. In recent years a number of major legislative and regulatory changes make it possible for foreigners in the UAE to fully own a company engaged in AI-related activities. The major highlights include:

- The 2020 Commercial Companies Law Amendment - In 2020, the UAE amended its federal code to allow foreigners to establish companies with 100 percent ownership. The 2020 law removed the need for an Emirati shareholder or local service agent for onshore companies (those outside of free zones), abolishing an earlier rule that required 51 percent local ownership.

The law also allows for the creation of joint stock companies that can sell up to 70 percent of the company via public offerings, up from 30 percent previously.

- Cabinet Resolution No. 16 of 2020 - In 2020, the UAE cabinet issued a resolution listing 122 economic activities on a so-called “positive list”, meaning they qualify for 100 percent foreign ownership.

While AI is not specifically named, the resolution broadly covers activities that include AI, like computer programming and scientific research. To qualify, companies must meet minimum capital requirements that range from 2-100 million AED, depending on the activity.

- Sector-Specific Guidance from Local Economic Departments (DEDs) - Under the new legislation, AI-related activities are typically included as approved positive list activities across multiple emirates.

For example, Dubai and Abu Dhabi DED each permit over 1,000 activities that can be fully foreign-owned, including AI and IT-related activities.

- Cabinet Resolution No. 55 of 2021 - This resolution designated “strategic impact activities” that have more restrictions on ownership – things like security, banking, and telecommunications.

So far AI is not explicitly part of the list, but it’s something to keep an eye on. If your AI-related activity is later added, it means a DED must submit your license application to a federal regulator, who in turn would set foreign ownership limits.

What Are the Compliance Requirements for Foreign-Owned AI Companies in the UAE?

1- Intellectual Property (IP) Rights

Foreign owned companies working in AI are afforded IP protection under the law, but there are limits. For example, under Federal Decree-Law No. 38 of 2021, “smart applications, computer programmes, databases and similar works” that are generated by AI can receive protection if there is an identifiable human author.

On the other hand, Federal Law No. 11 of 2021 excludes most software from patent protection, which can make it difficult to patent AI algorithms. Trademarks can be easily registered through the Ministry of Economy’s portal and it offers ten-year renewable terms.

2- Data Protection 

Foreign-owned AI companies must comply with Federal Decree-Law No. 45 of 2021 on the Protection of Personal Data.

This requires clear consent for data collection and stipulates that companies clearly specify the reason they are collecting data. It also stipulates that companies appoint a Data Protection Officer (DPO) if sensitive data is involved and that any cross-border data transfers be done securely. 

3- Residency Laws 

Under Cabinet Resolution No. 56 of 2018, long-term visas such as the 10-year Golden Visa are permitted for entrepreneurs, investors and highly skilled tech professionals. The UAE also offers so-called Green and Blue visas, which offer self-sponsorship if applicants meet certain criteria.

Read more: UAE Green Visa Vs. Blue Visa, 2025 Updates

4- AI Ethics and Algorithmic Fairness 

The UAE emphasizes that companies adhere to core principles of transparency, accountability and human oversight when building and working with AI systems.

It broadly outlined these principles in a 2024 public policy document. Digital Dubai’s AI principles meanwhile call for AI systems to make decisions that are free from bias or discrimination, whether in how they are trained or how they make decisions. That means using representative data and disclosing any potential sources of bias.

5- Corporate Tax and Economic Substance Rules 

In 2022, the UAE imposed a 9 percent corporate tax on profits exceeding AED 375,000, excluding some small businesses and free zone entities.

In addition, economic substance regulations require that UAE-based companies provide proof they are genuinely carrying out their activities in the UAE and not acting as a shell company. This can entail providing proof of employees and physical premises.

Read more: Is The UAE No Longer Tax-Free?

Frequently Asked Questions About  AI Investment in the UAE

1- Is it legal to open an AI company in the UAE as a non-resident?

Yes. Non-residents can establish AI companies in the UAE and can even enjoy 100 percent ownership. However you may need to appoint a UAE-based manager or obtain a residency visa to do certain activities, like open a bank account.

2- What visa do I need to start an AI company in the UAE?

If you’re looking for a visa ahead of starting an AI company in the UAE, you can pursue a Golden Visa (great for entrepreneurs and investors), a Partner Visa (if you’re becoming a shareholder or partner in an existing UAE firm), or a Green Visa (self-sponsored but with income requirements), among others.

Read more about: UAE Golden Visa

3- Is my company eligible for grants or funding as a foreign-owned AI startup?

Yes. The UAE offers a variety of grants and funding opportunities for foreign-owned startups focused on AI, including programs like the Mohammed Bin Rashin Innovation Fund (MBRIF), the Dubai Future Foundation, and other initiatives that fall under its ambitious AI 2031 agenda.

4- Can I join a UAE accelerator or AI sandbox as a non-Emirati founder?

Yes. The UAE is actively encouraging foreign talent to join and help build its AI ecosystem, including as part of its landmark Sandbox Accelerator, a VC-backed startup investment program.