v256.2 · business formation · AE · verified 2026-04
United Arab Emirates company formation
Entity types, formation timeline, costs, ongoing compliance, banking realities, and 2024-26 regime changes for incorporating in United Arab Emirates.
Corporate tax
9% federal (since June 1, 2023) on profits >AED 375K. Free zone qualifying income remains 0% (Qualifying Free Zone Person regime). 15% DMTT for multinationals from 2025 (Pillar Two).
Formation time
3-10 business days typical; 24 hours possible in IFZA / Meydan
Min capital
No paid-up minimum for most free zones; mainland varies by activity AED 50K-300K stated capital (rarely deposited)
Director residency
No UAE residency required (but director typically gets residence visa via the company)
Available entity types
Mainland LLC Free Zone Company (FZC/FZ-LLC) Free Zone Establishment (FZE) Offshore Company (IBC) Branch Office Sole Establishment
Formation costs & timeline
Cost range: AED 12,000-50,000 ($3,300-13,600) depending on free zone or mainland; AED 3-5K offshore (IBC). DMCC, IFZA, RAK ICC, Meydan most popular.
Timeline: 3-10 business days typical; 24 hours possible in IFZA / Meydan
Common setup paths: Free zones: IFZA (lowest cost, broad activities), DMCC (commodities + crypto), Meydan (small fast), JAFZA (logistics), RAK ICC (offshore IBC), ADGM (financial), DIFC (financial). Mainland: DED Dubai / Abu Dhabi DED. Typical service providers: A&A Associate, Creation Business Consultants, Virtugroup, Adam Global.
Rate landscape & compliance
| Corporate tax | 9% federal (since June 1, 2023) on profits >AED 375K. Free zone qualifying income remains 0% (Qualifying Free Zone Person regime). 15% DMTT for multinationals from 2025 (Pillar Two). |
| Franchise tax | No franchise tax. Annual license renewal AED 10K-25K typical. |
| VAT / GST | 5% VAT (since 2018) |
| Treaty network | 140+ |
| Shareholder residency | 100% foreign ownership in free zones; mainland 100% foreign ownership since June 2021 (most activities) |
| Public register | Free zone directors/shareholders not publicly searchable. UBO register maintained internally (UAE FATF compliance). Mainland MOEC has more visibility. |
| Annual filings | CT registration required for all (since 2023). CT return within 9 months of FYE. VAT returns quarterly if registered (turnover threshold AED 375K). Free zone audit + financial statement filing per free zone rules. |
| Substance requirements | Economic Substance Regulations (ESR) require relevant activities (banking, insurance, IP, etc.) to have adequate Emirati employees + physical office. Strict for licensing-only companies. |
Recent regime changes (2024-2026)
Corporate Tax introduced June 1, 2023 (9% above AED 375K profit). DMTT under Pillar Two from 2025 (15% for multinationals >€750M turnover). Golden Visa 10-year programme expanded 2024. ESR tightened — failure to file penalties stacked. VARA crypto licensing matured 2024-25.
Strengths
- Free zone qualifying income remains 0% even post-2023 CT introduction
- 140+ treaty network — among the world's largest
- Golden Visa 10-year residency for investors AED 2M+ / talented professionals AED 30K+/month salary
- World-class banking infrastructure (Emirates NBD, ADCB, Mashreq, DIB)
- No personal income tax for residents
- Mainland 100% foreign ownership since June 2021 (most activities)
- DIFC + ADGM common-law financial free zones with own courts
Drawbacks
- CT 9% applies to mainland + non-qualifying free zone income from June 2023
- ESR substance requirements bite for licensing-only setups
- Annual license renewal stacks (AED 10-25K typical per free zone)
- Bank-account opening 4-12 weeks typical post 1MDB era; some banks reject non-resident-owned
- Pillar Two 15% DMTT from 2025 erodes free zone advantage for large multinationals
- Visa-dependent residency (no path to Emirati citizenship outside rare exceptions)
Typical uses & top industries
Typical uses:
Trading companies (DMCC, IFZA, JAFZA) Crypto/Web3 (Virtual Assets Regulatory Authority — VARA Dubai) IP holding (RAK ICC) Family offices (ADGM, DIFC) Investment funds (ADGM, DIFC)
Top industries:
Trading + logistics Real estate Financial services (DIFC, ADGM) Crypto + Web3 Tech + e-commerce Tourism
Source: official United Arab Emirates registry/authority · Last verified 2026-04
See also: full business-formation directory