Investment Advisory in Dubai Mainland: Complete Guide

Start with the licence, not the pitch deck

If you intend to advise clients in Dubai on what to do with their money, the first question is not how your engagement letter reads. It is whether the activity you have in mind is one you are permitted to carry on at all, and which authority permits it. Advising on securities, arranging investments, managing portfolios and marketing funds are licensed activities in the UAE. Doing any of them from a Dubai mainland office without the right permission is not a documentation problem that can be fixed later; it is the reason files get closed and accounts get frozen.

A Dubai mainland investment advisory business normally sits under two permissions at once. The Securities and Commodities Authority regulates securities and investment activity onshore and issues the activity licence. The Department of Economy and Tourism issues the commercial licence that lets the company trade from a Dubai address. Neither substitutes for the other. Applicants routinely obtain the trade licence first, assume the activity is covered, and discover on their first client mandate that the regulated permission is missing.

Mainland, DIFC and ADGM are three different regimes

Onshore Dubai, the Dubai International Financial Centre and Abu Dhabi Global Market are not variations on one rulebook. DIFC and ADGM are common-law jurisdictions with their own courts and their own regulators, the DFSA and the FSRA. An advisory permission granted by one of them does not authorise onshore business, and a mainland licence does not let you solicit clients inside those centres. Choose the jurisdiction on the basis of where your clients actually are and which courts you want deciding a dispute, then build the entity to match. Retrofitting is expensive.

Foreign ownership is no longer the deciding factor it once was. Federal Decree-Law No. 26 of 2020, effective 1 June 2021, removed the general requirement for 51% UAE-national ownership of mainland companies, and full foreign ownership is available for most mainland activities, subject to a list of activities with strategic impact. A branch of a foreign company is a separate arrangement and still uses a local service agent. Confirm how your specific activity is treated before you build a shareholding around an assumption.

The corporate vehicle and who answers for it

The company itself is governed by the Commercial Companies Law, Federal Decree-Law No. 32 of 2021, which replaced Federal Law No. 2 of 2015. It sets how the entity is constituted, how managers are appointed and removed, what the constitutional documents must contain and what duties sit on the people running the business. For an advisory firm this matters more than it does for a trading company, because regulators look at named individuals. Approved persons, the compliance function and the money laundering reporting officer are personal appointments. If your articles and internal delegations do not match the individuals notified to the regulator, you have an inconsistency that surfaces at the worst moment.

Client documentation that does real work

The engagement letter is where most advisory disputes are won or lost, and most of them are lost on scope. State plainly whether the mandate is advisory or discretionary, because the two carry very different responsibility for a losing position. Record what the client told you about objectives, experience and capacity for loss, and record it in a form you can produce years later. Set out fees, and separately set out any commission, retrocession or other benefit you receive from a product provider; an undisclosed benefit is the single most common allegation in advisory claims. Say which reports the client gets and how often, and then send them.

Be equally clear about what you are not doing. If you do not advise on tax, on the client's home-country regulatory position, or on the legality of a product outside the UAE, say so in terms a court can read without help.

Client data and confidentiality

Client files in this business hold identity documents, source-of-wealth material and account details. Onshore, personal data is governed by Federal Decree-Law No. 45 of 2021; DIFC and ADGM have their own data protection regimes, so a group operating in more than one of them cannot run a single undifferentiated policy. Decide in advance what is retained, where it is stored, who inside the firm may see it, and on what basis it is disclosed to an authority that asks. Confidentiality clauses that stop at "we will keep your information confidential" do nothing when a regulator makes a request.

Tax and reporting are now part of the file

Corporate tax applies under Federal Decree-Law No. 47 of 2022 for financial years starting on or after 1 June 2023, at 0% up to AED 375,000 of taxable income and 9% above that. Advisory fees are business income. The old habit of describing the UAE as tax-free in client material is inaccurate and, in a document written by a regulated adviser, dangerous. VAT applies at 5% under Federal Decree-Law No. 8 of 2017 as amended by Federal Decree-Law No. 18 of 2022; whether a particular fee is standard-rated or falls within an exemption depends on what you are actually supplying, so get that assessed rather than assumed.

Economic substance reporting has been cancelled for financial years ending after 31 December 2022 under Cabinet Decision No. 98 of 2024. Obligations remain for the financial years from 2019 to 2022, so an entity that never filed for those years still has an open exposure, and buyers in a share sale still ask about it.

Staff, and what happens when an adviser leaves

Employment relationships are governed by Federal Decree-Law No. 33 of 2021, which replaced Federal Law No. 8 of 1980. Advisory firms lose value when a producer leaves with the client list, so deal with it in the contract at the outset: who owns the client relationship, what confidential information may not be taken, what happens to trailing fees. Restrictions on post-employment activity are enforceable only within the limits the law allows, and a clause drafted to be as wide as possible is often the one a court declines to apply.

Where a dispute will be decided

An onshore Dubai contract with no arbitration clause goes to the Dubai Courts, which work in Arabic and, in financial cases, lean heavily on court-appointed experts. That is a workable route, but it is a choice, and it should be a conscious one. Arbitration is governed by Federal Law No. 6 of 2018, amended in 2023. DIAC now administers cases that would previously have gone to DIFC-LCIA, which was abolished by Dubai Decree No. 34 of 2021, while the DIFC remains available as a seat. In Abu Dhabi, ADCCAC was restructured as arbitrateAD from 2024. Name the institution, the seat and the language in the clause itself; a clause that names none of them produces a preliminary fight before anyone reaches the merits.

Getting this right at the drafting stage is far cheaper than financial dispute resolution after a client complains, and it is what regulators look for when they assess whether a firm was run properly.

A short checklist before you take the first mandate

• Confirm the regulated activity and the authority that licenses it, in writing, before signing a lease.
• Match your constitutional documents, internal delegations and notified individuals to each other.
• Put scope, fees, third-party benefits and reporting in the engagement letter, in that order.
• Fix the data retention, storage and disclosure rules for client files before the files exist.
• Register for corporate tax and assess the VAT position on your fee model.
• Choose the forum, seat and language for disputes deliberately.

For advice on licensing an advisory business in Dubai or reviewing the documents you already use with clients, contact the Nour Attorneys team.

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Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.

Nour Attorneys Team

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