Middle East · Company formation
Company formation in United Arab Emirates
A near-zero-tax base for mobile founders, and for holding or IP structures with genuine substance. It also works as a regional operating and licensing hub.
At a glance
- Entity
- Free-zone company (FZ-LLC / FZE) or mainland Limited Liability Company (LLC) — both now permit 100% foreign ownership for most activities
- Corporate tax
- 9% on taxable income above AED 375,000; 0% below, and 0% for a Qualifying Free Zone Person on qualifying income (conditions apply). No personal income tax; VAT 5% (as of 2026)
- Incorporation time
- Free zone ~2–10 working days (some express same-day/60-minute routes); mainland ~1–3 weeks with DET approvals
- Minimum capital
- No statutory minimum for a mainland LLC (AED 1 nominal); free zones set their own, commonly a declared AED 10,000–50,000
- Resident director
- Not required — 100% foreign ownership allowed and no resident-director rule (a few strategic mainland activities still need an Emirati partner)
- Audit
- Audited accounts mandatory for a Qualifying Free Zone Person and for any taxable person with revenue above AED 50m; otherwise generally not required for corporate tax, though many free zones still require them by licence
- Remote set-up
- Free zone: yes, fully remote via digital portals. Mainland: mostly remote by power of attorney; any residence-visa / Emirates ID step needs in-country biometrics
- Government fee
- No single public figure; government and licence fees vary by emirate and free zone (roughly AED 12,500–30,000 all-in for a basic package). Confirm current figure for the chosen zone (as of 2026)
- Best for
- A near-zero-tax base for mobile founders, and for holding or IP structures with genuine substance. It also works as a regional operating and licensing hub.
The process
- Choose the route (a specific free zone or mainland/DET) and the licensed business activity
- Reserve the trade name and obtain initial / activity approval
- Sign or notarise the MOA and incorporation documents (grant a POA if forming remotely)
- Pay licence and registration fees; receive the trade licence and establishment card
- Register for Corporate Tax with the Federal Tax Authority (and VAT once turnover reaches AED 375,000); a QFZP must also keep audited accounts
- Open a corporate bank account (expect extensive KYC and substance review)
What can go wrong
- Banking is the real bottleneck: UAE bank KYC is stringent and account opening can take weeks, often demanding demonstrable local substance
- The 0% free-zone rate is conditional (QFZP): qualifying income, adequate substance, audited accounts, transfer pricing and the de-minimis test — breaching any one forfeits the rate for that period plus the following four
- Economic substance is now embedded in the Corporate Tax Law (standalone ESR filings ended after the 2022 period); mailbox structures without staff or premises are exposed
- CFC and place-of-effective-management rules in the founder's home country can tax a UAE company's profits despite the 0/9% headline — a UAE entity may be tax-resident where it is genuinely managed
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Form a company in United Arab Emirates?
One named person on the file, an honest read on tax and substance, and a fixed quote before you commit.