Registering a company rarely gives permission to carry on a regulated business. Most markets add a second layer: a general trade or business registration, then a sector permission from a regulator for activities such as financial services, payments, telecoms or defence, sometimes with foreign ownership limits. The order matters, because some regulators must approve before the company can even be incorporated.
Two layers: business registration and sector permission
In Germany anyone starting a trade, a branch or a dependent branch office must notify the competent authority at the same time (Gewerbeanzeige). France expects a business to complete any preliminary step its activity requires, such as an authorisation for a regulated activity, before choosing a legal form and registering. In the UAE a foreign investor needs a company licence from the federal or emirate authority for a mainland business, or from the free zone authority for a free zone business, and sector regulators for banking, insurance, aviation, real estate development and higher education may add their own licensing requirements or ownership limits on top.
The practical lesson is that the trade licence or registration shows the company exists and may trade in general; it does not authorise regulated work. Business plans should list each activity and map it to the permission it needs in each country.1234
Regulated activities and foreign ownership limits
Financial services show the pattern clearly. In the UK no one may carry on a regulated activity, or claim to, unless authorised or exempt. Singapore's Payment Services Act requires a licence to carry on a business of providing a payment service unless exempt. In Saudi Arabia, where an activity falls under the Saudi Central Bank, a SAMA licence or preliminary approval is needed to incorporate the company at all.
Some sectors also cap foreign ownership. India caps foreign investment in private sector banks at 74%, with the automatic route up to 49%. US federal law bars broadcast and common carrier radio licences from being held by a corporation more than one fifth of whose capital stock is owned or voted by aliens. In the UAE mainland, activities of strategic impact such as security and defence, banking and insurance, and telecommunications need approval from the relevant federal authority.5678910
| Market | Rule | Example | Source |
|---|---|---|---|
| United Kingdom | General prohibition, FSMA 2000 s19 | Regulated financial activities need authorisation or exemption | legislation.gov.uk |
| Singapore | Payment Services Act 2019 | Licence needed to provide a payment service unless exempt | Singapore Statutes Online |
| Saudi Arabia | Ministry of Commerce incorporation service | SAMA licence or preliminary approval before incorporating a financial company | mc.gov.sa |
| India (central) | FDI policy sectoral cap | Private sector banking: 74% cap, automatic route to 49% | FIFP FDI FAQ |
| United States (federal) | Communications Act s310 | Broadcast and common carrier licences: one-fifth alien ownership limit | Cornell LII, 47 USC 310 |
| UAE (mainland) | Cabinet Decision No. 55 of 2021 | Strategic-impact activities need federal approval | Chambers guide (secondary) |
| Germany | Trade Regulation Code s14 | Trade notification for any trade, branch or branch office | gesetze-im-internet.de |
| France | Company creation steps | Authorisation for regulated activity before registering | service-public.gouv.fr |
Decisions to make
- Which planned activities are regulated in each market, and which regulator licenses them?54A general trade licence does not cover regulated work, and carrying on a regulated activity without authorisation breaches the UK general prohibition.
- Must the licence or approval be obtained before the company is incorporated or registered?72Saudi Arabia requires SAMA approval to incorporate a financial company, and France expects authorisations before registration.
- Does a foreign ownership cap or approval requirement apply to the sector?8910Caps such as India's 74% in private banking or the US one-fifth limit on certain radio licences shape the shareholding structure.
- In the UAE, should the business be on the mainland or in a free zone?34The licensing authority, and in financial free zones the regulator, depends on that choice.
Documents usually needed
- Activity map listing each product or service and the permission it needs in each country
- Regulator application with business plan, financial projections and compliance arrangements
- Fit-and-proper information on controllers, directors and senior managers
- Ownership chart showing foreign ownership percentages against any sectoral caps
- Evidence of capital, premises and local staff required by the regulator
Common mistakes
- Assuming a trade licence or company registration authorises regulated activities
- Starting to market a regulated service before authorisation is granted
- Incorporating first and only then discovering that the regulator had to approve incorporation
- Overlooking indirect foreign ownership when testing sectoral caps
- Using a free zone licence to serve customers in a market the licence does not cover
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- US state-level licensing, such as state money transmitter licences, was not covered.
- Licence processing times and fees were not confirmed for any regulator.
- The text of UAE Cabinet Decision No. 55 of 2021 could not yet be checked; the strategic-impact list comes from a secondary source.
- Sector permissions in telecoms, energy, healthcare and defence were not compared systematically.
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
Anyone starting an independent standing trade, a branch or a dependent branch office must notify the competent authority at the same time. Trade notification (Gewerbeanzeige) under the Trade Regulation Code; applies to subsidiaries, branches and dependent establishments.
Before choosing a legal form and registering, a business must complete any preliminary steps its activity requires, such as obtaining an authorisation for a regulated activity. Which activities are regulated depends on the sector; the official guide lists this as step 3 of company creation.
A foreign investor needs a company licence from the relevant federal or emirate authority for a mainland business, or from the free zone authority for a free zone business. Emirate economic departments (for example in Dubai and Abu Dhabi) issue mainland trade licences; each free zone authority licenses entities in its zone.
Secondary source.
Sector regulators, including those for banking, insurance, aviation, real estate development and higher education, may impose licensing requirements or ownership limits in addition to the trade licence. Mainland; free zones and the financial free zones have their own regulators for regulated activities.
Secondary source.
No person may carry on a regulated activity in the United Kingdom, or claim to do so, unless authorised or exempt (the general prohibition). Financial Services and Markets Act 2000 s19. Regulated activities (for example deposit-taking, lending, payments-related and investment activities) are defined in secondary legislation; authorisation is granted by the Financial Conduct Authority and, for dual-regulated firms, the Prudential Regulation Authority.
The role of the FCA and PRA in granting authorisation is general background and is not stated in section 19 itself.
The Payment Services Act 2019 provides for the licensing and regulation of payment service providers and the oversight of payment systems, and section 5(1) requires a person to hold a licence to carry on a business of providing a payment service unless exempt. Licences are granted under section 6 as standard payment institution or major payment institution licences, and MAS also refers to a money-changing licence. Defined services include account issuance, domestic and cross-border money transfer, merchant acquisition, e-money issuance, digital payment token services and money-changing. Most provisions commenced on 28 January 2020.
The section 5(1) requirement is seen through the statutory definition of exempt payment service provider; section 5 itself was not visible. The three licence classes are named on the MAS Payment Services Act page.
Where a company's activity requires it, a licence or preliminary approval from the Saudi Central Bank (SAMA) is needed to incorporate the company. Financial activities supervised by SAMA, for example banking, finance and payment services.
Foreign investment in private sector banking is capped at 74%, with the automatic route up to 49% and government approval above 49%. Banking licences are separately regulated by the RBI. Central rule.
The FAQ is undated and its table still shows insurance at 74%, so confirm this cap against the current Consolidated FDI Policy.
A broadcast, common carrier, aeronautical en route or aeronautical fixed radio station licence may not be held by a foreign government or its representative, or by a corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives. Federal, Communications Act section 310(a) and (b)(3), administered by the Federal Communications Commission.
Statutory text read on the Cornell Legal Information Institute reproduction of the United States Code; the official text is published at uscode.house.gov.
Foreign investors need approval from the relevant federal authority to carry on activities of strategic impact, which under Cabinet Decision No. 55 of 2021 include security, defence and military activities; banks, exchange houses, finance companies and insurance; currency printing; telecommunications; and Hajj and Umrah services. Mainland activities. The list summarised in the source may not be complete; Dubai's guidance refers to seven strategic-impact sectors. Emirates may also keep their own lists of restricted activities.
Secondary source: the text of Cabinet Decision No. 55 of 2021 could not yet be checked. Chambers Doing Business In 2025 (UAE) gives a wider list of restricted sectors, including upstream oil and gas, water and electricity distribution, Quran memorisation centres and fisheries-related services.
Questions on this topic
10 statements on sector licensing and regulated activities
