Yes. You can generally sell a UAE free zone company to another investor by transferring some or all of its shares, subject to the rules and approval of the relevant free-zone authority.
The transaction is not completed simply by signing a private sale agreement or receiving payment. The free-zone authority must process the ownership amendment, conduct KYC checks on the buyer and issue updated corporate documents.
The company must also update its beneficial-ownership records, bank KYC, authorised signatories and other registrations affected by the sale. Requirements, fees and processing times differ between free zones, so the parties should confirm the current procedure before signing a binding agreement.
Is Selling the Company the Same as Selling Its Assets?
No. A share sale and an asset sale are different transactions.
Selling the company’s shares
In a UAE company share transfer, the investor purchases shares in the existing legal entity.
The company normally continues to own its:
- Trade licence
- Assets
- Contracts
- Bank account
- Receivables
- Intellectual property
- Employees
- Debts and liabilities
- VAT and corporate-tax registrations
The legal entity remains the same, but its ownership changes. This means the buyer may inherit the economic benefit—and the risks—of the company’s previous operations.
Selling selected business assets
In an asset sale, the buyer purchases specified assets, contracts, inventory, equipment, intellectual property or business operations. The buyer does not automatically acquire the shares of the existing company.
Asset transfers may require separate assignments, employee arrangements, landlord approvals, customer consents and licence changes. Tax treatment can also differ significantly from a share transfer.
The sale agreement should clearly identify whether the transaction involves shares, assets or a combination of both.
Can I Sell All or Only Part of My Shares?
Most free-zone structures permit both full and partial transfers, subject to the company’s constitutional documents and the authority’s rules.
A full transfer replaces the existing shareholder or shareholders with the buyer. A partial transfer allows the seller to retain an ownership interest while the buyer becomes a new shareholder.
DMCC, for example, defines a share transfer as a transaction in which a shareholder transfers shares partially or entirely to an existing or new shareholder. It requires the company to have an active licence, comply with applicable regulations and clear imposed sanctions before applying.
A partial transfer may require additional decisions about:
- Voting rights
- Profit distribution
- Management authority
- Reserved matters
- Bank-signing powers
- Future funding obligations
- Restrictions on later share transfers
- Dispute-resolution procedures
These matters should be documented in the amended MOA/AOA, shareholders’ agreement or both.
Can a Foreign Investor Buy a UAE Free-Zone Company?
Yes. UAE free zones generally allow foreign ownership, and an eligible foreign individual or corporate entity may acquire an existing company.
The buyer must still pass the free-zone authority’s KYC and compliance checks. The authority may review the investor’s:
- Nationality and country of residence
- Passport and identification
- Residential address
- Business background
- Source of funds
- Source of wealth
- Existing companies
- Sanctions and compliance profile
- Proposed involvement in the company
If the buyer is another company, additional documents may be required to identify its shareholders, directors, authorised representative and ultimate beneficial owners.
Certain regulated activities may require consent from another government body or sector regulator before ownership can change.
What Due Diligence Should the Buyer Complete?
Anyone planning to buy a business in Dubai or another UAE free zone should investigate the company before agreeing on the price.
Buyer due diligence should cover the following areas.
Corporate and licensing review
Confirm that the company has an active licence and that its activities, legal form, share capital, shareholders and officers match the official documents.
Check whether there are restrictions on the shares, outstanding authority penalties or pending licence amendments.
Financial review
Review:
- Audited or management accounts
- Bank statements
- Receivables and payables
- Loans and shareholder balances
- Inventory and fixed assets
- Cash flow
- Existing guarantees
- Unrecorded liabilities
- Related-party transactions
A high turnover does not necessarily mean the company is profitable or debt-free.
Tax review
The buyer should verify the company’s corporate-tax and VAT position, including registrations, filed returns, payments, penalties, voluntary disclosures and pending FTA queries.
The Federal Tax Authority states that gains from disposing of business assets generally form part of taxable income. Gains from selling shares may qualify for an exemption only when the relevant Corporate Tax conditions are satisfied.
Because the treatment depends on the seller, transaction structure and relevant conditions, professional tax advice should be obtained before completion.
Legal and commercial review
The buyer should examine:
- Customer and supplier contracts
- Lease agreements
- Employment contracts
- Intellectual-property ownership
- Insurance policies
- Legal claims and disputes
- Regulatory approvals
- Outstanding fines
- Change-of-control clauses
- Personal guarantees given by shareholders
A contract may allow the counterparty to terminate or require consent when ownership changes.
How Should the Company Be Valued?
There is no single formula for every UAE business sale. The valuation method depends on the company’s activity, profitability, assets, contracts and growth prospects.
Common approaches include:
- Asset-based valuation
- Earnings or profit multiple
- Discounted cash flow
- Revenue multiple
- Market-comparable transactions
The price should not be based only on the paid-up or nominal share capital shown in the MOA. Nominal share value may be very different from the commercial value of an operating business.
The parties should also decide whether the agreed price assumes that the company is debt-free, includes cash, includes shareholder loans or requires adjustments at completion.
What Is a Share-Purchase Agreement?
A share-purchase agreement, or SPA, is the contract between the buyer and seller. It explains what is being sold, the price, payment method, completion conditions and each party’s responsibilities.
A properly prepared SPA may cover:
- Number and percentage of shares
- Purchase price
- Deposit and payment schedule
- Conditions before completion
- Buyer and seller warranties
- Disclosure of liabilities
- Indemnities
- Treatment of shareholder loans
- Employee and contract matters
- Handover obligations
- Confidentiality
- Non-compete provisions
- Governing law and dispute resolution
- Steps required if authority approval is refused
Signing an SPA does not replace the free-zone authority’s official transfer process.
Which Documents Are Commonly Required?
Exact requirements vary, but a free zone company ownership transfer may involve the following documents.
Company documents
- Valid trade licence
- Certificate of incorporation or registration
- Existing MOA/AOA
- Existing share certificates
- Shareholder register
- Establishment card
- Current UBO records
- Office lease or facility agreement
- Corporate-tax and VAT certificates
Seller and buyer documents
- Passport copies
- UAE visas and Emirates IDs, where applicable
- Address proof
- KYC forms
- Source-of-funds evidence
- Corporate documents if a party is a company
- Board resolutions and powers of attorney
- Specimen signatures
Transaction documents
- Share-purchase agreement
- Buyer and seller resolutions
- Share-transfer forms
- Amended MOA/AOA
- Updated shareholder and UBO information
- Regulatory NOCs, where applicable
- Proof of payment, if requested
- Updated manager or authorised-signatory resolutions
JAFZA’s published process, for example, requires buyer and seller share-transfer resolutions and passport documents, while the full requirements depend on the type of incoming shareholder.
What Is the Step-by-Step Share-Transfer Process?
Although the exact workflow differs, a typical process includes:
- Review the company’s eligibility
Confirm that the licence is active and clear outstanding authority issues. - Conduct buyer and seller due diligence
Review legal, financial, tax, employee and commercial matters. - Agree on the valuation and structure
Decide whether the transaction is a full transfer, partial transfer or asset sale. - Prepare the SPA and resolutions
Document the commercial terms and required corporate approvals. - Submit the authority application
Upload the buyer’s KYC documents, transfer forms and resolutions. - Complete compliance checks
The free zone reviews the incoming shareholder, UBOs and source of funds. - Sign amended corporate documents
The parties sign the updated MOA/AOA and official transfer records. - Pay applicable authority charges
Transfer, amendment, document and administrative charges may apply. - Receive updated documents
The authority issues the amended licence, share certificate, register or incorporation documents. - Complete post-transfer updates
Update the bank, tax records, UBO register, establishment card, visas, signatories and business systems.
Do UBO Records Need to Be Updated?
Yes. An ownership change may alter the company’s ultimate beneficial owners.
Cabinet Decision No. 109 of 2023 requires an applicable legal entity to record changes in its beneficial-owner register within 15 days of becoming aware of the change. Financial free zones such as DIFC and ADGM apply their own beneficial-ownership frameworks.
The company should update both its internal registers and the information filed with the relevant registrar or free-zone authority.
What Happens to the Corporate Bank Account?
The account does not automatically become the buyer’s personal account. It remains an account belonging to the company, but the bank must be informed about changes to shareholders, UBOs, directors, managers and authorised signatories.
The bank will normally conduct updated KYC and may request:
- Amended licence and MOA/AOA
- New share certificate
- Updated UBO information
- Buyer’s passport, visa and Emirates ID
- Source-of-funds and source-of-wealth evidence
- Board resolution
- New signatory forms
- Business plan and transaction expectations
- Explanation of the sale and purchase price
Central Bank guidance requires banks to keep corporate customer information accurate and current. A transfer to a shareholder from a higher-risk jurisdiction may require enhanced due diligence.
The bank may temporarily restrict transactions, online access or signing powers until the review is completed. Continued operation cannot be guaranteed, and the buyer should never assume the existing banking relationship will remain unchanged.
Will Visas and the Establishment Card Be Affected?
A share transfer does not always cancel every employee visa because the employing company may remain the same legal entity. However, the free zone must review:
- Shareholder or investor visas
- Manager appointments
- Establishment-card information
- Immigration-system records
- Authorised immigration signatories
- Visa allocation or facility eligibility
The treatment differs between free zones and transaction structures. The parties should confirm whether any existing shareholder visa must be cancelled, amended or replaced.
How Much Does the Transfer Cost and How Long Does It Take?
There is no universal fee or guaranteed timeline.
Costs may include:
- Free-zone share-transfer fee
- Licence and registration amendments
- New share certificates
- MOA/AOA amendment
- Establishment-card changes
- Visa amendments
- Notarisation, attestation or translation
- Legal and financial due diligence
- Tax advice
- Bank KYC and signatory changes
A straightforward individual-to-individual transfer may be completed relatively quickly after all documents are accepted. A transaction involving corporate shareholders, overseas documents, regulated activities or complex due diligence can take several weeks or longer.
Always request the current fee schedule and processing estimate from the relevant free-zone authority.
Contact KIF Consultancy
Selling a free-zone company requires more than finding a buyer. The parties must structure the transaction, verify liabilities, obtain authority approval and complete banking, tax, immigration and UBO updates.
KIF Consultancy can assist with company-document reviews, authority coordination, ownership amendments, banking updates and the practical steps required to transfer free zone licence ownership. Contact our business setup consultants Dubai to discuss your proposed UAE free-zone company sale.
Authority approval, banking continuity and processing timelines cannot be guaranteed. Legal, tax and financial advice should be obtained where appropriate.
Frequently Asked Questions
1. Can a foreign investor buy an existing UAE free-zone company?
Yes. A foreign individual or corporate investor can generally acquire shares in an eligible free-zone company, subject to the authority’s KYC, ownership and regulatory requirements.
2. Can I sell only part of my company’s shares?
Yes, many free zones allow partial transfers. The amended ownership percentages, voting rights and management arrangements must be properly documented and approved.
3. What documents are required for the ownership transfer?
Common documents include the licence, incorporation certificate, MOA/AOA, share certificates, shareholder register, buyer and seller IDs, resolutions, UBO records, SPA and source-of-funds evidence.
4. Will the company’s bank account remain active after the sale?
It may remain open because the legal entity continues, but the bank must approve the updated ownership, UBOs and signatories. Temporary restrictions or further review may apply.
5. How long does a UAE free-zone company transfer take?
The timeline depends on the free zone, ownership structure, document readiness and compliance review. Straightforward transfers may take several business days, while complex cases can take several weeks.
