The UAE finished 2025 with a record-breaking economic performance. By adding 250,000 new companies in a single year, the nation has now surpassed 1.4 million active businesses. A 118% increase since 2021 for UAE company formations. This surge is the foundation of a bold new vision led by Abdulla bin Touq Al Marri, Minister of Economy and Tourism, to reach two million companies by 2035.
The Strategy Behind the Surge
A large contributing factor of the most recent growth could be a direct result of the updated 2021 Commercial Companies Law allowing 100% foreign ownership.
New 2025 amendments have further simplified the business landscape by:
- Strengthening corporate identity: Formally grants “UAE nationality” to all firms (including 100% foreign-owned and Free Zone entities). By legally recognizing them as Emirati companies, this boosts their global credibility, unlocks global trade benefits (CEPAs), and ensures their business history remains intact during relocation or restructuring.
- Increasing flexibility in share structures and shareholder exits: Companies can now issue multiple classes of shares (like Class A and B) and embed “drag-along” and “tag-along” rights directly into their legal documents, making it easier to attract investors and manage exits.
- Streamlining digital licensing: Simplifies incorporation through fully digital paths, reducing paperwork and procedural hurdles to accelerate business setup and conversion.
Economic Impact and Job Growth
This business boom has transformed the national economy and labour market:
- Non-Oil Dominance: Non-oil sectors now drive 77.5% of the GDP, led by tourism, fintech, and logistics.
- Population Growth: The workforce demand pushed the UAE population to 11.51 million in 2025; a half-million increase in one year following a 5.7% rise to 11.3 million in 2024. Dubai specifically crossed the 4 million resident mark in late 2025.
- Tourism Success: The sector’s contribution to GDP has more than doubled since 2021, now reaching 15%.
Local Innovation: Small businesses owned by UAE citizens grew by 63% over the last five years.
The 10-Year Vision: 2 Million Companies
The UAE goal is to host two million companies by 2035. To achieve this, the government is focusing on:
- Global Trade: Leveraging Comprehensive Economic Partnership Agreements (CEPAs) to give UAE-based firms easier access to international markets.
- Intellectual Property: A 74% rise in registered trademarks shows growing investor confidence in the UAE’s legal protections.
- Tech Leadership: Plans are in place to nurture 10 “unicorn” startups (valued over $1 billion) within the next decade.
Global Wealth Attraction: The UAE remains a top destination for the world’s wealthy, with a projected net inflow of 6,700 millionaires in 2024 alone, significantly outpacing the US (+3,800), Singapore (+3,500), and Canada (+3,200).
Looking Forward to 2026
With GDP growth projected to hit 5.6% this year, the momentum from 2025 remains strong. The UAE continues to evolve from an oil-reliant nation into a diversified, knowledge-based global hub, offering unparalleled opportunities for investors and professionals alike. There has never been a better time to consider setting up a business in the UAE.
