Set up your UAE company the right way, and stay compliant
We are chartered accountants, so we start with the structure and the tax, not the licence.
Three paths to a UAE company
Most new businesses choose between a free zone company, a mainland company and an offshore company. Each does a different job, and each carries different tax and compliance duties.
Free zone
Suits service, trading and holding businesses
A company licensed by a free zone authority, with up to 100% foreign ownership. It is a good fit when you work mainly from the zone, serve clients abroad or other free zone companies, or want a lighter setup. Selling directly to UAE customers needs an extra step.
Read moreMainland
Suits businesses that sell to UAE customers
A company licensed by the emirate's economic department, which in Dubai is the Department of Economy and Tourism. Most activities allow 100% foreign ownership. It is the usual choice when you serve customers across the UAE or want to bid for government work.
Read moreOffshore
Suits holding and international structures
A company that holds assets or shares, or trades internationally, but does not do business inside the UAE. It is not a way to avoid tax, and it still has registration, reporting and beneficial owner duties.
Read moreIf you already own a company abroad and want to extend it here without forming a new company, read our guide to a branch or representative office.
How to choose
Start with how the business will earn its money. The licence follows from that, not the other way round.
Who will your customers be?
If most customers are in the UAE, a mainland licence is usually the simplest route, because you can invoice local customers directly. If your customers are abroad, or are other free zone companies, a free zone licence often fits better. A free zone company that wants UAE customers needs a licensed mainland distributor, a mainland branch or company, or in Dubai a permit from the Department of Economy and Tourism. Dubai also offers a Free Zone Mainland Operating Permit for non-regulated activities, which costs AED 5,000 for each six months.
Where will your team sit, and how many visas do you need?
On the mainland, the Ministry of Human Resources and Emiratisation sets your visa quota from the legal form, the size of your work facility and your business needs. In a free zone the number depends on the package and facility you take, so a small team may need only a flexi-desk while a larger one needs an office lease. An offshore company is not set up to host staff.
Do you plan to bid for government or large corporate work?
Companies bid for Dubai government work by registering on the government procurement portals. The federal supplier register treats free zone companies as a separate category. The In-Country Value programme can give certified suppliers an advantage in tenders. Check the terms of the tender before you choose a structure.
What will the tax position look like?
Every UAE company is inside the corporate tax regime. A free zone company can reach a 0% rate on qualifying income only if it meets every condition, and the conditions are strict. A mainland company pays the standard rates. Model both before you commit, because the cheaper licence is not always the cheaper company.
Who owns the business?
Foreign ownership of up to 100% is available in free zones and for most mainland activities. A small number of strategic activities are restricted, so check your activity with the licensing authority early. If you have several owners, decide ownership shares, control and exit terms before the licence, because the memorandum of association is hard to change later.
Free zone, mainland and offshore compared
The table shows the points that most often decide the choice. Figures that vary by free zone are marked, and each free zone sets its own rules.
| Topic | Free zone | Mainland | Offshore |
|---|---|---|---|
| Foreign ownership | Up to 100% foreign ownership. | 100% foreign ownership for most activities. A few strategic activities are restricted. | Held by the shareholders you name. JAFZA offshore, for example, needs at least one shareholder, one director and one secretary. |
| Tax treatment | Inside corporate tax. A Qualifying Free Zone Person pays 0% on qualifying income and 9% on other income, if every condition is met. Otherwise the standard rates apply. | Corporate tax at 0% up to AED 375,000 and 9% above. VAT at 5% once the registration threshold is passed. | Treated as inside the UAE tax regime. Do not assume an exemption: we confirm the position for each structure. |
| Visa eligibility | Linked to the facility you take. The number varies by free zone and package. | Yes. The quota depends on legal form, the size of the work facility and business needs. | Not the purpose of an offshore company. Confirm with the registered agent before you plan staff or residence. |
| Office requirement | Varies by zone and package. Some zones include a flexi-desk with the licence. | A physical address is required. In Dubai the tenancy agreement is registered with Ejari. | No licensed premises. A registered agent is required. |
| Share capital | Set by each zone, often by activity. Confirm the figure with the zone before you pay. | No statutory minimum for a limited liability company unless the Council of Ministers sets one. | Set by the jurisdiction. We confirm it when we quote. |
| Audit requirement | A Qualifying Free Zone Person must have audited financial statements. Each zone sets its own rules too: JAFZA, for example, asks FZE and FZCO companies for an updated audit report every year. | A limited liability company appoints an auditor every year. Corporate tax also requires audited statements above AED 50,000,000 of revenue. | Set by the jurisdiction and by the tax rules. We confirm it for each structure. |
| Government tenders | Free zone companies are a separate category on the federal supplier register. Check the tender terms before bidding. | Licensed companies register on the government procurement portals. In-Country Value certification can add an advantage. | Not applicable. An offshore company cannot do business within the UAE. |
| Number of visas | Depends on the zone and the package. IFZA requires registered office space with 4 or more allocations, and SHAMS says up to 50 per licence. | Set by the Ministry from legal form, work facility size and business needs. | Not applicable in the usual structures. |
Want to talk this through?
Tell us about your business and we will point you to the right person. We reply straight away during office hours.
- Taxable income taxed at 0%
- AED 375,000
- Rate above that band
- 9%
- VAT registration threshold
- AED 375,000
- Revenue limit for Small Business Relief
- AED 3,000,000
The tax side most providers skip
Choosing a structure is a tax decision as much as a legal one. These are the points we cover before you sign anything.
Corporate tax
Corporate tax applies to financial years starting on or after 1 June 2023. Taxable income up to AED 375,000 is taxed at 0%, and income above it at 9%. Every taxable company must register with the Federal Tax Authority and get a tax registration number, free zone companies included. A new company must apply within 3 months of incorporation, and late registration carries a penalty of AED 10,000. The tax return and the payment are both due within 9 months of the end of the tax period, and records must be kept for 7 years. Individuals who run a business are taxed only when their turnover passes AED 1,000,000 in a calendar year.
Small Business Relief lets a resident company elect to be treated as having no taxable income if its revenue is AED 3,000,000 or less, for the period and for every earlier period. It is available for tax periods ending on or before 31 December 2029. Qualifying Free Zone Persons and members of very large multinational groups cannot use it, and a company that claims it must still register and file.
Qualifying Free Zone Person conditions
A free zone company pays 0% only on qualifying income, and only while it meets every condition at once.
- It keeps adequate substance in the free zone: real assets, enough qualified full-time staff and enough operating expenditure there.
- It earns qualifying income, as defined by the Cabinet and by the list of qualifying and excluded activities.
- It has not elected to be taxed at the standard rates.
- It follows the arm's length rule and keeps transfer pricing documents.
- It prepares audited financial statements.
- Its non-qualifying revenue stays within the lower of 5% of total revenue or AED 5,000,000.
If a condition fails, the company loses Qualifying Free Zone Person status for that tax period and for the next four. That is five periods at the standard rates, so a free zone setup built only around the 0% rate carries real risk.
VAT
VAT is charged at 5%. You must register when your taxable supplies and imports pass AED 375,000 in the previous 12 months, or you expect them to in the next 30 days. You may register voluntarily from AED 187,500 of supplies or expenses. Late registration carries a penalty of AED 10,000. Returns are quarterly for most businesses, due within 28 days of the end of the period, and VAT records are kept for 5 years.
A free zone does not mean VAT-free. Only free zones listed as Designated Zones are treated as outside the UAE for certain supplies of goods, under conditions, and services are generally taxed as normal. A free zone that is not a Designated Zone is treated like the rest of the UAE.
Accounting and audit
Under the Commercial Companies Law every company keeps accounting records, and a limited liability company prepares annual accounts and appoints an auditor each year. Free zones set their own audit rules, and the corporate tax audit rules above apply on top. Setting up bookkeeping from the first month makes every later filing easier.
Beneficial owners and substance
Licensed companies, free zone companies included, keep a register of their beneficial owners. A beneficial owner is anyone who owns or controls 25% or more of the capital or votes. The register is filed with the licensing authority within 60 days of licensing, and changes are recorded within 15 days.
The separate economic substance reporting regime no longer applies to financial years ending after 31 December 2022. Substance still matters, because the Qualifying Free Zone Person test asks for it directly.
What drives the cost
We do not publish a single price, because the total depends on choices you make. We give a written quote once we know your activity and structure.
- The structure: free zone, mainland, offshore, branch or representative office.
- The licence type and the number of activities on it.
- The facility: a flexi-desk, a shared office or a leased office, and its size.
- The number of visas and the number of owners and managers.
- Approvals from other regulators for regulated activities.
- Share capital, where the authority asks for it.
- Annual renewals for the licence, the facility and the visas.
- Accounting, audit, tax registrations and filings after the licence.
- Registered agent fees, for offshore structures.
Free zone licence
Get a quote
Each zone sets its own fees.
Mainland licence
Get a quote
Depends on activity and office.
Offshore company
Get a quote
Includes the registered agent.
The setup journey, step by step
The order differs a little between free zones and the mainland, but the journey from first call to a working company looks like this.
Consultation
We learn what the business does, who owns it and where the customers are, then recommend a structure with the tax effect explained.
Activity and name
We choose the licensed activities and reserve a trade name that the authority will accept.
Initial approval
The authority confirms it has no objection to the business. Regulated activities may need approval from another regulator first.
Documents and agreement
Owners sign the memorandum of association or equivalent. We prepare the documents and check ownership and control.
Premises
You take a facility that fits the licence, such as a registered tenancy on the mainland or a flexi-desk or office in a free zone.
Licence and establishment card
You pay the fees, collect the licence and obtain the establishment card that employment visas depend on.
Visas
Owners and staff apply for work permits and residence through the immigration and labour authorities.
Bank account
The bank carries out its own due diligence and asks for company documents and details of every owner of 25% or more. Opening the account is the bank's decision, so we prepare the file carefully.
Tax registrations
We register for corporate tax within the time allowed, register for VAT when the thresholds are met, and file the beneficial owner details.
Accounting from day one
We set up the books, the chart of accounts and the reporting calendar, so the first return is not a scramble.
After you are licensed
Setup is the start of the compliance calendar. We handle the work that follows.
- Business licencesLicence types, who issues them and how to choose.
- Business activitiesHow activities are classified, combined and approved.
- Visas through a companyOwner, partner and employee residence visas.
- Golden VisaThe official categories and thresholds for investors and entrepreneurs.
- Business setup FAQSixty short answers, each linked to the full guide.
- Corporate taxRegistration, returns and planning for your tax periods.
- VATRegistration and return filing when your turnover requires it.
- Accounting and bookkeepingMonthly books, reconciliations and reporting.
- E-invoicingGet ready for the UAE e-invoicing system, which phases in from 2027 according to revenue.
- AML compliancePolicies and screening if your activity is a designated business.
Frequently asked questions
Can a foreigner own 100% of a company in Dubai?
Yes, in most cases. Free zones allow up to 100% foreign ownership, and the Commercial Companies Law allows full foreign ownership of most mainland activities. A small number of strategic activities are restricted, so we check your activity with the licensing authority before you commit.
What is the difference between a free zone and a mainland company?
A free zone company is licensed by a free zone authority and operates under that zone's rules. A mainland company is licensed by the emirate's economic department and can trade across the UAE. They also differ in office needs, visas, audit duties and how corporate tax applies.
Can a free zone company sell to customers on the mainland?
Not directly by default. A free zone company needs a licensed mainland distributor, a mainland branch or company, or in Dubai a permit from the Department of Economy and Tourism. For non-regulated activities, Dubai's Free Zone Mainland Operating Permit costs AED 5,000 for each six months.
Do I need a physical office?
Every UAE business needs a physical address to operate, and on the Dubai mainland the tenancy agreement is registered with Ejari. Free zones vary: some include a flexi-desk with the licence, and larger teams need an office. Offshore companies have no licensed premises.
Is there a minimum share capital?
For a mainland limited liability company there is no statutory minimum unless the Council of Ministers sets one. Free zones set their own rules, and some ask for none while others ask for a figure that depends on the activity.
Do companies in the UAE pay corporate tax?
Yes. UAE companies, free zone companies included, are inside corporate tax. Taxable income up to AED 375,000 is taxed at 0% and income above it at 9%. Every taxable company must register and file a return.
What is a Qualifying Free Zone Person?
It is a free zone company that meets every condition for the 0% rate on qualifying income: adequate substance, qualifying income, no election to be taxed normally, transfer pricing compliance, audited statements and a limit on non-qualifying revenue. If it fails a condition it loses the status for that tax period and the next four.
When do I need to register for VAT?
When your taxable supplies and imports pass AED 375,000 in the previous 12 months, or you expect them to in the next 30 days. You can register voluntarily from AED 187,500. Late registration carries a penalty of AED 10,000.
Do I need audited accounts?
A mainland limited liability company must appoint an auditor every year. For corporate tax, audited statements are required from every Qualifying Free Zone Person and from any taxable company with revenue above AED 50,000,000. Free zones also set their own audit rules.
What is the beneficial owner register?
A register of the people who own or control 25% or more of a company. Licensed companies, free zone companies included, file it with their licensing authority and keep it up to date.
How many visas can my company have?
On the mainland the Ministry sets a quota from your legal form, the size of your work facility and your business needs. In a free zone it depends on the package and facility, and each zone publishes its own allowances.
Can an offshore company trade in the UAE?
No. Offshore structures such as JAFZA offshore companies cannot do business with persons within the UAE. They are used to hold assets and shares or for international activity, and they still carry tax registration and beneficial owner duties.
Which structure is the cheapest?
It depends on your activity, team and facility, and on the tax result as well as the licence fee. A cheap licence can cost more once audit, visas and tax are counted. We compare the full cost of each option in a written quote.
How long does setup take?
It depends on the authority, the activity approvals and how quickly documents are ready. Some steps have fixed windows: on the mainland, for example, the licence must be paid within 30 days of the payment voucher. We give a timeline for your case once we know the activity and structure.
Do you help after the licence is issued?
Yes. We handle corporate tax and VAT registration and filing, bookkeeping and accounting, e-invoicing readiness and AML compliance, so the company stays compliant after the licence.
General information based on UAE rules at the time of writing. It is not tax or legal advice for your situation. Speak to us before you decide.
Talk to us about your business.
Tell us what you need and we will point you to the right person. We reply straight away during office hours.