Incorporation

UAE Companies

Over the last 15 years the United Arab Emirates, and Dubai in particular, has emerged as a financial centre built with international business in mind — with a wide treaty network and, since 2023, a corporation tax that still leaves profits earned outside the UAE untouched.

9%
corporation tax above AED 375,000; nothing below
9%
corporation tax on taxable income above AED 375,000
0%
on profits generated outside the UAE
60+
countries in the double tax treaty network
ADGM
our own licensed firm, Berkley Limited, in Abu Dhabi
01

The UAE as a financial centre

Over the last 15 years the United Arab Emirates (UAE) and Dubai in particular has emerged as a new financial center with International Business in mind. The UAE has designed many types of local companies to facilitate the different needs of investors and international corporations which either want to trade within the UAE or want to take advantage of the banking secrecy and use the UAE companies for their tax planning solutions.

We analyse below the most commonly used entity types used for international tax planning purposes

Local Limited Liability Company ("LLC")Free Zone Entity ("FZE")International Business Company ("IBC")Branch or representative office

The UAE has been very active with its vision to become a strong financial center. This is evident from the extensive double tax treaty network of more than 60 countries including

Germany

France

India

Indonesia

Italy

Luxembourg

Malaysia

Malta

The Netherlands

Singapore

South Korea

Ukraine

Cyprus

In addition, the UAE has strong tax treaties signed with the below countries which are also used during our tax planning consultations

United Kingdom

Germany

Egypt

China

France

India

Malaysia

Sri Lanka

Switzerland

LEARN MORE ABOUT THE UAE

Learn more about the UAE and the 3 glamorous emirates of Dubai, Qatar and Saudi Arabia which act as financial centres in the Golf Region and welcome businesses from the European Union and from 3rd Countries:

Popular types of Dubai companies

The four structures international businesses use most.

A. Local Limited Liability Company (LLC)
  • Suitable to trade within UAE & GCC

This company type has been designed for the unrestricted trade within the UAE  or the GCC ("Gulf Cooperation Council" states) including the Free Zones entirely free of import duties (5% for the other types of UAE companies) and with no restrictions in the acquisition or rental of immovable property or visas for personnel. However, a local partner is required who must be a UAE or GCC national owning at least 51% of the share capital of the company.

Advantages

  • LCC can conduct any type of business with the exception of insurance and banking
  • Can trade freely within the entire UAE, GCC and Free Zones
  • Zero import duties on goods traded in the UAE
  • No restrictions on visa applications
  • No restrictions on immovable property acquisition or property rental selection
  • Liability is restricted to the company's share capital

Disadvantages

  • Local partner owns at least 51% of the share capital
  • Takes 8- 10 weeks to incorporate
  • External ministers need to approve the incorporation, which causes delays
  • Visas have to be renewed every 2 years (3 years in the free zones)
B. Free Zone Entities
  • Suitable to trade outside the UAE & GCC or in the Free Zones

Dubai has established more than 40 Free Zone areas so far and it is in the process of creating even more. Free Zones are literally geographical areas which provide specific license to trade / operate in specific industries/ business activities. In other words, each Free Zone licenses different activities, therefore the new companies formed will be formed in the Free Zone that issue license in the field they will contact the trade.

Example

If an overseas investor or company wants to establish a company in Dubai that performs healthcare trade and products then the company must be established in the Dubai Healthcare City (DHCC) which covers and licenses the industry of healthcare, medical education and research, pharmaceuticals and medical equipment.

Types of Companies used in the Free Zone areas

There are two types of companies used in the Free Zones, the Sole Establishment (FZE) with one shareholder and a Free Zone Company (FZC) which must have more than one shareholders. 

Free Zone Companies characteristics:

  • Can have physical or legal shareholders (within or outside the UAE national)
  • Must appoint a local national UAE manager for the local administration issues (banking, signatures)
  • Tax resident certificate can be applied
  • Office can be acquired or rented

Free Zone main industry breakdown for licensing:

  • Ras AI-Khaimah (RAK) - General Trading, Services, Educational & Industrial Services
  • Dubai Internet City (DIC) - Communication Technology & Internet 
  • Dubai Knowledge Park (DKP) - Training, Personal Development, Human Resources Management
  • Dubai Media City (DMC) - Media 
  • Dubai Multi Commodities Centre (DMCC) - Commodities Trade & Exchange
  • Dubai World Central (DWC) - Logistics, Aviation, Ancillary Services, Light Industry
  • Dubai Healthcare City (DHCC) which covers and licenses the healthcare, medical education and research, pharmaceuticals and medical equipment,

Advantages

  • 100% ownership (local partner or sponsor not required)
  • Tax Free
  • 100% Dividend and Capital repatriation
  • Can take advantage of UAE extensive double tax treaty network
  • Designed to support international business in the most effective manner (for the local standards)
  • 15-50 years guarantee against the future imposition of corporation tax (rates could reach up to 55%)
  • Duty free import of goods as long as they are not supplied to the local market
  • No restrictions of hiring expatriates (office space an indicator of how many visas can be obtained -1 visa per 10 s.m)

Disadvantages

  • Free Zone companies can trade outside the UAE or in the Free Zone area only
  • 4 - 6 Weeks to establish
  • More expensive than an offshore company
  • For some business activities local governmental approvals may still be required
  • Some Free Zones may request detailed business plans
  • Language & cultural issues
  • Banking, difficulties setting up a bank account
  • Administration burden, still bureaucratic establishment
C. International Business Companies
  • Suitable for tax planning holding purposes (trade outside the UAE & GCC)

Intentional Business Companies are companies used by investors mainly for tax planning purposes and with no intention of carrying out business within the UAE.  Usually the IBCs are used for holding of investments, trading activities outside the UAE and in some cases holding of UAE real estate. As these companies have been designed as tax planning vehicles they can not rent or acquire office space or immovable property nor they can recruit staff as visas are not permitted.

Advantages

  • Tax Free
  • No public record of directors, shareholders
  • No filing requirements (no need to file financial statements)
  • Can benefit from the extensive double tax treaty network of the UAE, by setting up a Free Zone branch

IBC Disadvantages

  •  Difficulty setting up bank accounts
  • VAT 

Characteristics

  • It may not trade in the UAE
  • UAE physical offices, residency visas, 
  • Director and shareholder can be physical or legal persons from anywhere in the world
  • It may act as a holding company from any company
  • It may acquire real estate in the UAE with prior authorisation (RAK Investment Authority)
  • It requires special license to operate as a banking institution
  • A local licensed agent is required to proceed with the set up
D. Branch in UAE and Representative Office
  • Suitable to represent the main company for trade or marketing respectively

An overseas company can set up a branch or a representative office int he UAE without been considered as a legal local entity but rather an extension of the overseas company therefore during set up the branch or representative office  use the overseas company details for the local registrations. A UAE branch is allowed to contact trade anywhere in the UAE or GCC ("Gulf Cooperation Council" states) including the Free Zones whilst the representative office functions are restricted to administration / operations support and marketing of the overseas company. 

Both, branch and representative office have similar characteristics, advantages and disadvantages as explained below:

Advantages

  • 100% ownership, no need for local partner
  • Branch can perform all the activities of the overseas company (but can not perform any other activities outside the operations of the overseas parent)
  • No restrictions on the location of the acquisition or rental of immovable property

Disadvantages

  • License is required to operate
  • 8-10 weeks for the set up (significant more than the Free Zones)
  • External approvals are required from the UAE government ministers (costly in money and time)
  • Bank guarantee of app USD 15,000 is required for the set up
  • A local National Service Agent is required to perform the liaison with various local governmental parties
  • A representative office can not trade for profit but merely to support and market the overseas company

Frequently Asked Questions

FAQ

UAE company formation and tax

Do all emirates apply VAT?

Some apply VAT whilst others don’t.

More popular destination for freezone business Dubai has introduced the VAT and so did the Saudi Arabia. On the other hand, Qatar, another popular destination has no intention of introducing it at the time being and thus is more preferred by some businesses.

Does the UAE (Dubai) apply Corporation Tax?

Not yet but they will for year endings commencing 1st of June 2023.

The FTA (federal tax authority) has introduced the Corporation Tax which will apply to all emirates commencing in 2023 and being accrued for payment in 2024.

Good news for everyone; the tax does not apply for profits generated outside the UAE hence nothing really changes for businesses and HNWIs (High Net Worth Individuals) who trade outside the UAE.

What will the rate of Corporation Tax be?

CT Rate is 9% for taxable income above AED 375,000. Below that amount there is no tax due!

What happens if my tax is within the UAE? Is there room for manoeuvre?

Yes. Tax planning can be applied. UAE profits derived from sales within the UAE are taxed and to reduce this there are several options we can assist you with.

When will the Corporation Tax be payable?

Approximately 9 months after the year end.

Is there a requirement for provisional tax payment etc (upfront of current years tax)?

No.

Is the UAE tax system sophisticated like the EU?

Yes, to everyone’s surprise the UAE tax system is sophisticated and straightforward!

Is it easy to create a local company in the UAE?

Yes. With more than few years of experience in the Company creation and banking services in the UAE we can now share that the UAE is up to speed both with Company formation and banking incorporation.

Is it easy to open a local bank account?

It is a straightforward process with the peculiarities that we know as local service providers; unlike the company formation opening a bank account for an international company or HNWI requires local knowledge and expertise. Having said this, the client experiences a smooth process.

Local filing requirements?
Our presence

Berkley Limited, Abu Dhabi

In order to better serve our growing international clientele—particularly across the Middle East—CYAUSE Audit Services has established a fully-fledged audit and assurance firm, Berkley Limited, based in Abu Dhabi. This strategic expansion reflects our commitment to providing seamless cross-border services and strengthening our presence in one of the world’s most dynamic business regions. Berkley Limited operates within the Abu Dhabi Global Market (ADGM), an internationally recognised financial centre, ensuring that our clients benefit from a robust, transparent, and globally aligned regulatory environment.

Berkley Limited is a licensed audit, accounting, tax, and advisory firm regulated by the ADGM, adhering to the highest international standards of compliance and professionalism. (Berkley.ae) Through this platform, we are able to support both regional and international clients with tailored, high-quality solutions across audit and assurance, internal audit, financial reporting, and tax advisory. Our approach is built on delivering not only compliance, but confidence—enabling clients to navigate complex regulatory frameworks while focusing on the growth and development of their businesses.

By combining the expertise and reputation of CYAUSE in Cyprus with our operational presence in the UAE, we offer a truly integrated service model that bridges Europe and the Middle East. This allows us to support clients in relocation, international structuring, and expansion into new markets with efficiency and precision. Berkley Limited enhances our ability to act as a single point of contact for clients operating across multiple jurisdictions, reinforcing our commitment to long-term partnerships, strategic insight, and consistent delivery of high-quality professional services.

Visit our UAE Office: Berkley Ltd - ADGM Regulated Audit & Assurance Firm

Our team of experts can facilitate any enquiry you may have from incorporating your company anywhere in the Middle East to banking, substance services and on going professional support.

At present we specialise in Dubai, Qatar and KSA (Kingdom of Saudi Arabia) company formation and compliance support services.

Accounting, audit and if applicable tax services are routinely performed to all our clients anywhere in the world. Our multidisciplinary team will ensure that other linguistic or cultural differences are welcomed and valued.

What are you waiting for?

Contact us for a free first consultation at: enquiries@cyprusaccountants.com.cy or + 357 22 336 309.

Talk to us about the UAE

Freezone or mainland, corporation tax registration, banking and the annual audit — with an ADGM-licensed firm of our own on the ground.

Call us today: +357 22 336 309