Company setup

Company setup in Dubai and the UAE

Free zone or mainland, the licence, your residence visa and the bank account. What each step involves and what the company has to file once it exists.

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Licensed by: A free zone authority, or the economic department of an emirate
Foreign ownership: Up to 100 percent in free zones, and on the mainland for most activities
Corporate Tax: Registration within three months of incorporation, also for free zone companies
Every year: A Corporate Tax return, a licence that has to stay valid and, in several free zones, financial statements

Free zone or mainland comes first.

A company in the UAE is licensed in one of two places. In a free zone, where the zone's own authority issues the licence and its own rules apply. Or on the mainland, where the economic department of the emirate does.

The choice decides who you can sell to. A free zone company is treated as outside the mainland: to sell goods or services locally it has to work through a licensed mainland distributor or set up a mainland branch or company. Foreign trade is generally unrestricted.

Ownership is no longer the difference it used to be. Foreign investors can own up to 100 percent of a mainland company. The exception is a set of activities with strategic impact, where the licensing rules may restrict foreign ownership, such as defence, telecommunications, banking and insurance.

And a free zone does not mean zero tax by itself. Every company registers for Corporate Tax. The 0 percent rate is for the qualifying income of a free zone company that meets a set of conditions, every year.

Routes and legal forms.

Three routes, and under each a small number of legal forms. Not every free zone offers every form, and the shareholder limits differ per zone.

Free zone company

Governed by the laws and regulations of its free zone authority, which issues the licence. Up to 100 percent foreign ownership. The forms are a free zone establishment (FZE), a free zone company (FZCO) and a free zone limited liability company (FZ-LLC). How many shareholders each can have differs per zone.

Mainland limited liability company

Licensed by the economic department of the emirate. One person or company may own it alone, or up to fifty partners together, each liable only to the extent of their share in the capital. It needs a physical address with a rental agreement.

Branch

Part of an existing company, not a new one. In the Jebel Ali free zone, for example, a branch is wholly owned by its parent and carries the same name and activities. On the mainland a foreign company needs a licence for a branch and no longer needs a UAE national agent for it.

Offshore company

Offered by certain free zones as a licence type of their own. In Jebel Ali it receives a certificate of incorporation and no business licence, and it cannot conduct commercial activity with persons in the UAE.

Financial free zones

DIFC and ADGM are financial free zones with their own civil and commercial law. Federal criminal law still applies there.

Free zone company active in mainland Dubai

Since 2025 a company in a Dubai free zone can apply to the Department of Economy and Tourism for a branch licence or a permit to conduct its activities in mainland Dubai. It keeps separate financial records for that activity.

From business activity to bank account.

Activity and legal form

The business activity comes first. It is the basis for the legal form and for the type of licence, and some activities need approval from another government body before the licence is issued.
Free zone or emirate, and the trade name

You choose the free zone, or the emirate for a mainland company, and register a trade name. The name is followed by the legal form and has to be new.
Licence application and office

The application goes to the free zone authority or the economic department, with the company documents and an address. In a free zone the authority prepares the lease. On the mainland a physical address is required.
Establishment card

The company's immigration file. It needs a valid trade licence, and free zone companies apply for it through their free zone authority.
Residence visa and Emirates ID

An entry permit, a medical fitness test for applicants aged 18 and over, and an Emirates ID application with fingerprints. The federal identity authority joined the residence and Emirates ID applications in one form, and since April 2022 the Emirates ID card serves as proof of residence instead of a sticker in the passport.
Bank account

Not part of the licence. The bank runs its own checks on the company and its owners, and the Central Bank requires a bank to refuse a company whose ownership or purpose it cannot establish.
Corporate Tax registration

Within three months of the date of incorporation. Being registered for VAT does not replace it.

What the company owes once it exists.

The licence is the start. These are the duties that follow, with the thresholds and amounts set in the law.

Corporate Tax registration	Within three months of incorporation. Late registration carries an administrative penalty of AED 10,000
Corporate Tax rate	0 percent on taxable income up to AED 375,000 and 9 percent above that
Corporate Tax return	Filed and paid within 9 months of the end of the tax period
Qualifying free zone company	0 percent on qualifying income and 9 percent on the rest, without the AED 375,000 band. Conditions include adequate substance and audited financial statements
Losing the free zone status	Failing a condition removes it for that tax period and the four that follow
VAT registration	Mandatory above AED 375,000 of taxable supplies and imports. Voluntary from AED 187,500
Records	Corporate Tax records for 7 years after the end of the tax period. Other tax records for 5 years as the base period, and 7 years for real estate records
Beneficial owners	Filed with the registrar within 60 days of licensing. Changes recorded within 15 days
Audit and financial statements	Yearly for a mainland LLC. Free zones set their own rule: several ask for audited financial statements each year or at licence renewal
Economic substance reporting	No longer required for financial years ending after 31 December 2022

Where Lumea comes in.

Lumea Finance is based in Dubai. We set up the company with you: the licence, the establishment card, your residence visa and Emirates ID, and the preparation for the bank.

Then we stay. Corporate Tax registration, VAT, bookkeeping and the yearly return sit with the same firm that set the company up, so nothing has to be explained twice.

It starts with a call about your business and where you live. If this jurisdiction is not the right fit for you, we say so.

Common questions.

Can a foreigner own 100 percent of a company in the UAE?

In a free zone, up to 100 percent. On the mainland as well, since the requirement of a majority Emirati shareholder was abolished. The exception is a set of activities with strategic impact, where the licensing rules may restrict foreign ownership, such as defence, telecommunications, banking and insurance.

Can a free zone company sell to customers on the mainland?

Generally not directly. To sell goods or services locally it works through a licensed mainland distributor or sets up a mainland branch or company. In Dubai a free zone company can since 2025 apply for a branch licence or a permit to operate in mainland Dubai.

Does a free zone company pay 0 percent Corporate Tax?

Not automatically. It registers for Corporate Tax like every other company. The 0 percent rate applies only to the qualifying income of a Qualifying Free Zone Person, which has to meet conditions such as adequate substance and audited financial statements. Its other income is taxed at 9 percent.

When does a new company have to register for Corporate Tax?

Within three months of the date of incorporation. Late registration carries an administrative penalty of AED 10,000. The Federal Tax Authority waives it when the first tax return is filed within seven months of the end of the first tax period.

When is VAT registration required?

It is mandatory once taxable supplies and imports exceed AED 375,000 over the past 12 months, or are expected to in the next 30 days. Voluntary registration is possible from AED 187,500.

Is the bank account part of the licence?

No. The licence comes from the free zone authority or the economic department. The bank decides separately, after its own checks on the company and on everyone who owns 25 percent or more of it.