Company formation and business setup in Dubai and the UAE

In most cases, yes. Since the amendments to the Commercial Companies Law, full foreign ownership is permitted for onshore companies across a wide range of commercial and industrial activities, and it has always been available in the free zones. The requirement for a local partner holding 51 per cent no longer applies to most businesses.

There are exceptions. Activities on the strategic impact list, and certain regulated sectors, still carry ownership conditions or require approval from the relevant authority. The rules are applied by each emirate's licensing authority, so the position can differ between Dubai, Abu Dhabi and the northern emirates for the same activity. We check the specific activity code you need against the current list before you commit to a jurisdiction.

The distinction is about what the company is allowed to do. An onshore, or mainland, company is licensed by the emirate's economic department and can trade freely in the UAE market, contract with government, and take on unlimited premises and staff. A free zone company is licensed by its zone, benefits from an established regulatory framework, and is designed for international business and for sectors the zone specialises in; trading directly into the UAE market normally requires a distributor or a branch. An offshore company holds assets and shares rather than trading, has no visa entitlement and no physical presence.

The right answer follows from what you actually intend to do. Selling to UAE customers points onshore. Serving international clients, or operating in a regulated financial or technology sector, usually points to a free zone. Holding property, shares or intellectual property points offshore, often beneath a foundation. We ask what the business will do in its first two years before recommending anything, because migrating a company later is materially more expensive than choosing correctly at the outset.

For a straightforward free zone or offshore company with clean documents, incorporation is usually completed within one to two weeks. An onshore company typically takes two to four weeks, longer where the activity needs external approval from a ministry or sector regulator.

Incorporation is rarely the slow part. Bank account opening is, and it commonly takes four to eight weeks after the licence is issued, sometimes longer for structures with complex ownership or higher-risk activities. Visa processing, medical testing and Emirates ID add a further two to three weeks per person. We give you a stage-by-stage timeline at the outset, and we tell you which steps sit outside our control so the date you plan around is a real one.

Costs fall into government charges and professional fees. Government charges include the licence, registration, and where applicable the establishment card and immigration file, and they are set by the authority rather than by us. They vary widely: an offshore company is the cheapest to maintain, most free zones sit in a middle band, and onshore licensing plus premises is the most expensive. Some activities also require approvals from external government bodies or sector regulators, and those approvals can add significantly to the cost. Some activities also require approvals from external government bodies or sector regulators, and those approvals can add significantly to the cost.

Recurring costs are the ones people underestimate. Every company carries an annual licence renewal, a registered office or flexi-desk, and, depending on the structure, registered agent fees, audit, corporate tax registration and filing, and visa renewals. We give you a full first-year and second-year figure before you commit, including the third-party charges, so the budget reflects what the company actually costs to keep rather than only what it costs to open.

Every company needs a registered address. Free zones satisfy this with a flexi-desk or shared workspace package included in most licences; onshore companies generally require a leased premises registered with the relevant authority, and the size of the premises can determine how many visas you may sponsor.

A licence with an immigration file entitles the company to sponsor residence visas for owners, employees and their dependants. The number is tied to the licence type and the space held. The process runs from entry permit through medical testing and Emirates ID to visa stamping, and takes two to three weeks per person once the establishment card is issued. Offshore companies carry no visa entitlement at all, which is often the deciding factor against them.

UAE corporate tax applies at 9 per cent on taxable profits above AED 375,000, with profits below that threshold taxed at zero per cent. Registration is a separate obligation from payment: nearly all companies must register and file an annual return, including those whose profits fall below the threshold and those expecting to pay nothing.

Qualifying free zone persons may benefit from a zero per cent rate on qualifying income, but the conditions are strict and include maintaining adequate substance in the zone, meeting the qualifying activity requirements, and complying with transfer pricing rules. The relief is not automatic by virtue of being in a free zone. Separately, VAT registration is required once taxable supplies exceed AED 375,000 and is voluntary above AED 187,500. We set the structure up so these obligations are identified from day one rather than discovered at the first filing deadline. This summary is general information only and is not legal or tax advice. Tax treatment depends on your own circumstances and on the position at the time. You should take specific legal and tax advice on your structure rather than relying on this website. This summary is general information only and is not legal or tax advice. Tax treatment depends on your own circumstances and on the position at the time. You should take specific legal and tax advice on your structure rather than relying on this website.

They are the three compliance regimes that catch most new companies by surprise. Ultimate beneficial ownership rules require every company to identify and register the natural persons who ultimately own or control it, and to keep that register current. Economic substance requirements apply to companies carrying on specified relevant activities, and require that the actual income-generating work is done in the UAE, with directed and managed decision-making, adequate staff and premises, and an annual notification and report.

Anti-money laundering obligations apply directly to designated non-financial businesses and professions, including corporate service providers, real estate agents and dealers in precious metals, and require registration on the goAML system, a compliance officer, risk assessments and suspicious transaction reporting. Penalties for missed filings are significant and are applied administratively. We identify which regimes apply before incorporation and build the filing calendar into the ongoing administration.

We introduce clients to UAE banks and prepare the file, but no adviser can guarantee an account: the decision rests with the bank's compliance function. Approval turns on the shareholders' profile and source of wealth, the activity, the countries the business deals with, and whether the structure is transparent enough for the bank to understand quickly.

The applications that fail are usually the ones that arrive incomplete or that raise questions the file does not answer. We prepare a full pack, including corporate documents, a business plan with realistic projections, evidence of source of funds, and supporting contracts or invoices where they exist, and we match the client to banks that actually serve their profile rather than applying at random. Expect four to eight weeks and be prepared for follow-up questions.

Often, yes. Many free zones and offshore registries permit continuation, sometimes called redomiciliation, which transfers an existing foreign company into the UAE while preserving its legal identity, its contracts and its history. That is usually preferable to incorporating a new entity and transferring assets, which can trigger tax and consent issues in the original jurisdiction.

Moving between UAE jurisdictions is also possible in some cases, though not all zones permit inbound or outbound transfer, and an onshore-to-free-zone move usually means a new licence rather than a continuation. Either route requires good standing in the original registry, board and shareholder approvals, and often consent from banks and counterparties. We check feasibility before anything is filed, since a failed migration can leave a company in limbo between two registries.

Annually: renew the trade licence and registered office before expiry, renew the establishment card and any visas, file the corporate tax return, and submit UBO and, where applicable, economic substance filings. Companies over the VAT threshold file VAT returns quarterly or monthly. Many free zones and all onshore companies require audited financial statements.

Beyond the calendar, the company must keep its records current: any change of shareholder, director, manager, activity or registered address must be notified to the registry within the prescribed period, and most changes require amended constitutional documents. Late filings attract administrative fines and, in the worst case, licence suspension, which then blocks visa renewals and bank operations. We administer this for clients on an ongoing basis so nothing is missed.