As economic ties between the UAE and France deepen, businesses on both sides are navigating a complex but highly strategic legal landscape. A strong understanding of cross-border legal frameworks is becoming essential for investors, founders and international advisors.
Here are the key legal pillars shaping UAE–France trade and investment today :
- Bilateral agreements that enable business
The fundamental stability and attractiveness of cross-border investment are secured by key agreements designed to mitigate risk and incentivize capital flow. Investment protection treaties, double taxation agreements and air transport agreements play a crucial role in reducing risk, encouraging foreign investment, and supporting smoother commercial activity across both jurisdictions.
For instance, the Double Taxation Avoidance Agreement (DTA): in force since 1990 (and subsequently amended), the UAE–France DTA is a crucial tool for financial planning. For investors and businesses, one of the most commercially significant provisions is the mutual agreement to impose a 0% withholding tax (WHT) rate on key passive income streams specifically: dividends, interest and royalties.
- Company formation in the UAE
Businesses expanding into the UAE must evaluate the differences between mainland and free zone structures—each with distinct rules around ownership, licensing and regulatory oversight. Choosing the right setup has long-term implications for operations and compliance.
- Mainland (Onshore): Recent amendments to the UAE Commercial Companies Law have now permitted 100% foreign ownership in most mainland sectors, eliminating the historical need for a local partner or sponsor. This structure is typically chosen by entities that require direct access to the wider UAE domestic market and plan to bid on government or infrastructure projects across the Emirates.
- Specialised Free Zones (FZ): While 100% foreign ownership is now common on the Mainland, FZs retain their primary competitive advantage: specialised regulatory regimes, specific industry focus, and tax efficiency (historically 0% corporate tax, though subject to the new 9% corporate tax regime).
- Company structures in France
Foreign investors looking at France typically consider entities such as SARL, SAS, branches and representative offices. Each structure carries different levels of flexibility, governance obligations, projected scale and shareholder control.
- The Société par actions simplifiée (SAS): This is often the preferred choice for foreign investors and venture-backed entities due to its high degree of contractual flexibility. The SAS allows founders and shareholders to define internal governance rules, share classes, and transfer restrictions almost entirely in the by-laws, reducing statutory constraints.
- The Société à responsabilité limitée (SARL): A simpler structure, often preferred for SMEs and joint ventures, offering limited liability with more stringent statutory governance requirements than the SAS.
- Branch or Representative Office: These options are typically used for market exploration or limited activities (e.g., procurement) that do not constitute a “permanent establishment” and therefore do not require full incorporation, simplifying initial compliance.
- Compliance for cross-border ventures
Corporate governance, due diligence, accurate documentation, and sector-specific regulatory requirements form the foundation of successful cross-border operations. Businesses must remain aligned with both UAE and French compliance expectations.
- Managing cross-border disputes
Clear contract drafting, enforceability across jurisdictions, governing law clauses, and well-structured dispute resolution mechanisms (including mediation and arbitration) are critical to reducing risk when international disagreements arise.
As cross-border trade continues to expand, companies that understand these legal frameworks are better positioned to protect their investments, operate confidently, and build sustainable international partnerships.
If your organisation is exploring opportunities between the UAE and France, a strong legal strategy is not just helpful—it’s a competitive advantage.
