FAQs

You can choose from three main types of jurisdictions:

 * Mainland Company: Registered with the Department of Economy and Tourism (DET) or its equivalent in other emirates. A mainland license allows you to trade anywhere in the UAE and internationally.

 * Free Zone Company: Registered within one of the UAE's over 40 free zones, each specializing in different industries (e.g., media, logistics, technology). Free zones offer 100% foreign ownership and full repatriation of profits.

 * Offshore Company: A legal entity that conducts business outside the UAE. It's often used for international trade, asset protection, and tax optimization.

The cost varies significantly based on the chosen jurisdiction (mainland vs. free zone), business activity, and visa requirements.

 * Free Zone Company: Packages can start from AED 10,000 to AED 25,000 for a basic license without a visa. Packages with visas typically start from AED 20,000.

 * Mainland Company: The cost is generally higher due to additional government fees. A mainland license typically starts from AED 15,000 and can go up to AED 50,000 or more for specialized activities.

A mainland company is a legal entity licensed by the economic development department of a specific emirate. Its primary advantage is the ability to conduct business throughout the entire UAE, directly target the local market, and bid on lucrative government contracts.

No. As of recent reforms, a local sponsor is no longer required for most business activities on the mainland. Foreign investors can now enjoy 100% ownership of their mainland companies, eliminating the need for a UAE national as a 51% shareholder.

The essential documents include:

 * Passport copies of all shareholders.

 * An initial approval certificate from the DET.

 * A registered trade name.

 * A signed Memorandum of Association (MoA).

 * An Ejari-registered tenancy contract for your office space.

A free zone company is a business entity set up within a designated economic area. They are ideal for businesses focused on international trade and service provision outside the UAE. The main advantages are 100% foreign ownership, full repatriation of capital and profits, and exemptions from import/export duties.

A free zone company cannot directly trade with the mainland UAE market. To do so, it must either appoint a local distributor or open a separate mainland branch, which requires a mainland license. However, they can do business with other companies within the same or different free zones.

Some of the most popular free zones, known for their business-friendly regulations and infrastructure, include:

 * Jebel Ali Free Zone (JAFZA): Ideal for trading and logistics.

 * Dubai International Financial Centre (DIFC): Specializes in financial and legal services.

 * Dubai Media City (DMC): Perfect for media, advertising, and creative industries.

 * Dubai Multi Commodities Centre (DMCC): Excellent for trading commodities and a wide range of services.

Once your business is licensed, you can apply for an investor or partner visa. The number of visas you can apply for depends on the company's legal structure and the size of your office space. You can also sponsor visas for your employees and family members.

Commercial License: Required for companies engaged in buying and selling goods, importing, exporting, and trading.

 * Professional License: Issued to service-based businesses that rely on intellectual abilities and skills, such as consultancies, law firms, and accounting services.

 * Industrial License: Mandatory for businesses involved in manufacturing, processing, or converting raw materials.

For a mainland company, a physical office with an Ejari-registered tenancy contract is mandatory. In many free zones, however, you can opt for a Flexi-Desk or virtual office package, which is a cost-effective alternative for startups and freelancers.

To open a corporate bank account, your business must first be legally registered and licensed. You will need to provide:

 * A valid trade license.

 * Company incorporation documents (e.g., Memorandum of Association).

 * Passport copies and Emirates IDs of all shareholders and authorized signatories.

 * A board resolution authorizing the account opening.

 * A detailed company profile or business plan.

 * Some banks may require personal bank statements of the company's shareholders.

   The process can be simplified by working with a business setup consultant.

When selecting a bank for your business, consider the following:

 * Minimum Balance Requirement: Many banks have a minimum monthly balance requirement to avoid fees.

 * Transaction Fees: Compare fees for local and international transfers, as well as cheque and cash deposits.

 * Online Banking & Services: Look for a bank with a user-friendly online platform, mobile app, and corporate services.

 * Customer Support: A bank with excellent customer service and a dedicated business relationship manager can be invaluable.

Taxation in the UAE

Yes, the UAE introduced a federal Corporate Tax on the net profits of businesses. The standard rate is 9% on taxable income that exceeds AED 375,000. Taxable income below this threshold is subject to a 0% rate. Free zone companies that meet specific criteria (as "Qualifying Free Zone Persons") can also benefit from a 0% corporate tax rate on their qualifying income.

You are mandatorily required to register for Value Added Tax (VAT) with the Federal Tax Authority (FTA) if your taxable supplies and imports exceed AED 375,000 over the previous 12 months or if they are expected to exceed this threshold in the next 30 days. You can also voluntarily register if your taxable supplies and imports are between AED 187,500 and AED 375,000. The VAT rate is 5%.

Businesses must:

 * Register for Corporate Tax and VAT (if applicable) with the FTA.

 * Maintain proper financial records for at least five years.

 * File annual Corporate Tax returns and periodic VAT returns.

 * Comply with all regulations related to invoicing, record-keeping, and tax payments.

It is highly recommended to engage a qualified tax advisor to ensure full compliance.

Need expert assistance? Contact us for a free consultation to find the best solution for your UAE business setup. Our experienced consultants can guide you through every step of the process.