Selling a UAE business requires careful planning to maximize value, minimize tax leakage, ensure clean transfer of ownership, and avoid post-sale liabilities. As of February 2026, exit options depend on jurisdiction (mainland, free zone, or offshore), company structure, shareholding composition, and whether the buyer is local or foreign. The process involves valuation, due diligence, share transfer approvals, regulatory clearances, and settlement of all obligations. Founders who treat exit as an afterthought often accept lower multiples, face disputes with buyers, or incur unexpected penalties from incomplete compliance or abandoned entities.
Preparing the Company for Sale
A sale-ready company demonstrates clean books, compliant records, and strong substance. Maintain audited financials (mandatory in many free zones for Qualifying Free Zone Person status or above certain revenue), up-to-date VAT and corporate tax filings, no outstanding fines, and clear beneficial ownership declarations. Resolve any shareholder disputes, formalize governance through shareholder agreements, and document key contracts, IP ownership, and client relationships. A digital services firm preparing for exit ensures transfer pricing documentation supports arm’s-length dealings and segregated income streams preserve any tax preferences.
Valuation Methods and Realistic Expectations
Valuation combines asset-based, income-based (discounted cash flow or EBITDA multiples), and market-based approaches. Multiples in UAE vary by sector: tech and digital services often achieve 4–8× EBITDA, professional services 3–6×, trading 2–4×, depending on growth, recurring revenue, and client concentration. Buyers discount for limited substance, short operating history, or dependency on the founder. A consulting business with stable international contracts commands higher multiples than one reliant on the founder’s personal relationships. Engage independent valuers early to set realistic expectations and support negotiations.
Share Transfer Process in Mainland and Free Zone Companies
Mainland share transfers require approval from the Department of Economic Development (DED) in the relevant emirate, updated memorandum of association, and registration with the trade license authority. No pre-emption rights exist unless specified in the shareholder agreement. Free zone transfers follow zone-specific rules: some require authority approval, others allow direct share assignment with updated license records. Both require buyer due diligence clearance and settlement of any outstanding fees or obligations. A free zone LLC sells shares by executing a share purchase agreement, obtaining zone approval, and updating the license register.
Regulatory Clearances and Approvals
Certain activities trigger additional approvals. Real estate brokerage requires RERA consent for license transfer, financial services need Central Bank or SCA nod, and regulated sectors demand ministry clearances. Buyers must meet fit-and-proper criteria in licensed activities. Free zone companies selling to mainland buyers may need to migrate or add mainland access permits. A trading company ensures customs code and import-export records transfer cleanly to avoid clearance disruptions post-sale.
Tax Implications of the Sale
Capital gains on share sales by UAE resident entities face corporate tax at 9 percent above AED 375,000 threshold unless qualifying for participation exemption (5 percent+ ownership, 12-month holding, subsidiary taxed at least 9 percent equivalent). Non-resident sellers may face withholding tax in the buyer’s jurisdiction, mitigated by UAE double taxation agreements. VAT does not apply to share transfers. A founder selling a free zone company with Qualifying Free Zone Person status structures the transaction to minimize non-qualifying income exposure during the sale period.
Payment Structures and Escrow Arrangements
Common structures include upfront cash, deferred payments tied to performance milestones, earn-outs based on future revenue, or vendor financing. Escrow accounts held by UAE banks or law firms secure deferred portions and protect against post-completion claims. A buyer pays 70 percent at closing and 30 percent over 12–24 months contingent on revenue targets, with escrow covering potential warranties.
Post-Sale Obligations and Clean Exit
The seller must settle all liabilities, cancel visas, close bank accounts if required, and file final tax returns. Abandoned companies accumulate penalties and damage future credibility. A clean exit involves full deregistration where the entity ceases operations or transfer of all obligations to the buyer. Founders planning multiple ventures ensure the sold company leaves no compliance shadows.
Partners such as ALand, guided by Dr. Pooyan Ghamari, support exits by conducting pre-sale compliance audits, coordinating valuation and due diligence, drafting share purchase agreements with protective clauses, securing regulatory approvals, structuring payments to minimize tax leakage, and managing post-completion obligations to deliver a clean, dispute-free handover. Selling a UAE business delivers maximum value when preparation begins early, documentation remains audit-ready, governance is robust, and the process aligns with regulatory and tax realities rather than rushed negotiations or incomplete cleanup.