Company Setup in the UAE: Mainland or Free Zone

What’s included

• Activity classification and zone selection, with a written rationale
• Trade name reservation and initial approvals
• Licensing with the economic department or the free zone authority
• Memorandum of association and corporate documents, including attestation and legalisation
• Office or flexi-desk arrangements and Ejari registration where required
• Branch registration for existing foreign companies

UAE company setup at a glance (2026)

A UAE company is licensed either by the emirate’s economic department (in Dubai, the Department of Economy and Tourism, DET) or by a free zone authority. Whichever route you take, the company must then register for corporate tax and keep a beneficial owner register.

Item	Detail
Mainland licensing (Dubai)	DET, with applications made through the Invest in Dubai platform
Free zone licensing	The free zone authority, which also handles its companies’ work permits and visas
Foreign ownership	100% foreign ownership of mainland companies allowed since Federal Decree-Law No. 26 of 2020; strategic sectors still need approvals
Free zone company selling on the Dubai mainland	Possible for non-regulated activities with a Free Zone Mainland Operating Permit (Executive Council Resolution No. 11 of 2025)
Corporate tax registration	Every resident company, within 3 months of incorporation, on the FTA’s EmaraTax platform
Beneficial owner (UBO) register	Created and filed with the registrar within 60 days of licensing
Economic Substance Regulations	Reporting cancelled by Cabinet Decision No. 98 of 2024
Recurring obligations	Annual licence renewal, corporate tax return within 9 months of year end, VAT returns once registered

Mainland, free zone or branch: which UAE structure should you choose?

The structure decides who licenses the business, where it can sell and how its profit is taxed. These are the five structures new UAE businesses usually compare in 2026.

Structure	Licensed by	Ownership	Where it can trade	Corporate tax position
Mainland LLC	The emirate’s economic department (DET in Dubai)	1 to 50 partners; up to 100% foreign outside strategic impact activities	Anywhere in the UAE and abroad	0% up to AED 375,000, 9% above; Small Business Relief at revenue of AED 3m or less
Free zone company	The free zone authority	Up to 100% foreign	Within its zone and outside the UAE; the Dubai mainland only with a permit or a distributor	0% on qualifying income if it is a Qualifying Free Zone Person, with no AED 375,000 band and no Small Business Relief; otherwise 0% and 9%
Mainland branch of a free zone company	The economic department	Part of the free zone company	The UAE mainland	Domestic permanent establishment: a Qualifying Free Zone Person pays 9% on its profit, and its revenue is left out of the de minimis test
Branch of a foreign company	The economic department; no UAE national service agent needed	Wholly owned by the foreign parent	The activities on its UAE licence	Registers for corporate tax within 6 months; taxed on the profit attributable to the branch
Individual without a company	A licence or permit in the individual’s own name	The individual	As the licence or permit allows	Taxed only once business turnover exceeds AED 1m in a calendar year; wages and personal investment income do not count

How do you set up a company in Dubai, step by step?

Set-up runs in a fixed order: activity, name, approval, licence, then visa, labour and tax registrations. This is the Dubai mainland route; free zones run steps 1 to 4 on their own portals.

1. Choose the business activity and legal form; the activity decides the licensing authority and any extra approvals.
2. Reserve a trade name and obtain initial approval from DET through Invest in Dubai. Initial approval confirms the government has no objection to the business being set up.
3. Sign the memorandum of association (or a local service agent agreement, where the legal form needs one) and secure premises; Dubai leases are registered through Ejari.
4. Obtain any activity-specific approvals, then collect the trade licence.
5. Obtain an establishment card from GDRFA Dubai (ICP in other emirates) and, for mainland companies, a MOHRE establishment card before applying for work permits.
6. Register for corporate tax on EmaraTax within 3 months of incorporation. Register for VAT within 30 days of crossing the mandatory threshold.
7. Create the beneficial owner and partners registers and file them with the registrar within 60 days of licensing.

What documents do you need to set up a company in the UAE?

You need identity documents for every shareholder, manager and signatory, and constitutional documents for any corporate shareholder.

• Passport copies of all shareholders, managers and authorised signatories (valid for at least 6 months for anyone applying for residence)
• For a corporate shareholder: certificate of incorporation, memorandum and articles, and a board resolution approving the UAE company and naming its signatory, legalised for UAE use
• Tenancy contract for the premises (registered with Ejari in Dubai)
• Details of each beneficial owner: anyone owning or controlling 25% or more
• A notarised authorisation for the person who will deal with GDRFA or ICP
• For corporate tax registration: Emirates ID and passport of any owner holding more than 25%, and proof of the signatory’s authority

What government rates and deadlines apply to a new UAE company in 2026?

Licence fees vary by authority and activity; use the authority’s own fee schedule. The tax rates, deadlines and penalties below are set federally.

Item	Amount / deadline
Corporate tax rate	0% on taxable income up to AED 375,000, 9% above; a Qualifying Free Zone Person can pay 0% on qualifying income
Small Business Relief	Revenue of AED 3m or less: elect to be treated as having no taxable income, for tax periods ending on or before 31 December 2029
Corporate tax registration	Within 3 months of incorporation
Late corporate tax registration	AED 10,000, waived if the first return is filed within 7 months of the end of the first tax period
Corporate tax return and payment	Within 9 months of the end of each tax period
VAT	5%; registration mandatory once taxable supplies and imports exceed AED 375,000, voluntary from AED 187,500
VAT registration deadline	Within 30 days of becoming required to register; AED 10,000 penalty if late
UBO register failures	Up to AED 100,000 per violation (Cabinet Resolution No. 132 of 2023)

Small Business Relief is not available to Qualifying Free Zone Persons or members of multinational groups with revenue above AED 3.15bn. The extension to 2029 was made by Ministerial Decision No. 131 of 2026.

How much corporate tax does a new UAE company pay in its first year?

A new UAE company pays 0% on its first AED 375,000 of taxable income even if its first tax period is under 12 months; the FTA does not pro-rate the band. This example follows one Dubai mainland LLC to its first return.

1. Beneficial owner and partners registers: 60 days after 1 February 2026 is 2 April 2026.
2. Corporate tax registration: within 3 months of incorporation, so by 1 May 2026.
3. First tax period: 1 February to 31 December 2026, 11 months. The AED 375,000 band applies in full.
4. Corporate tax: (700,000 − 375,000) × 9% = 325,000 × 9% = AED 29,250.
5. Small Business Relief: revenue of AED 4,200,000 is above AED 3,000,000, so it is not available. With revenue of AED 2,900,000 the company could elect it and pay AED 0.
6. Return and payment: 9 months after 31 December 2026, so by 30 September 2027.
7. Had registration been late, the AED 10,000 penalty would be waived by filing the first return by 31 July 2027, within 7 months of the period end.

Assumptions: licence issued 1 February 2026; first financial year ends 31 December 2026; revenue AED 4,200,000; taxable income AED 700,000; not part of a multinational group. FTA public clarification CTP003 confirms thresholds are not pro-rated for a first tax period; the only exception is the AED 12m de minimis for interest deductions.

What is due in a new UAE company’s first year?

Most first-year deadlines run from the licence date or the financial year end, not from the calendar. This calendar assumes a Dubai mainland LLC.

When	What	Deadline	Authority
Day 1	Trade licence issued with its Dubai Unified Licence number	On licensing	DET or the free zone authority
By day 60	Beneficial owner and partners registers filed	60 days from licensing	The registrar (DET or the free zone authority)
By month 3	Corporate tax registration	3 months from incorporation	FTA, on EmaraTax
Month 12	Trade licence renewal	Before the licence expires	DET or the free zone authority
Within 4 months of the year end	General assembly approves the accounts and appoints the auditor (mainland LLC)	4 months	Commercial Companies Law
Within 9 months of the year end	First corporate tax return and payment	9 months	FTA, on EmaraTax

Common mistakes when setting up a company in the UAE

Costly set-up mistakes happen in the first weeks: the wrong jurisdiction, a missed deadline or a wrong assumption about tax.

• Choosing a free zone, then selling mainly to mainland customers: direct mainland sales generally need a mainland licence, a distributor or a mainland permit.
• Assuming a free zone means 0% tax: the 0% rate covers only qualifying income, and failing any Qualifying Free Zone Person condition removes it for that period and the next four.
• Skipping corporate tax registration because profits are small: every resident company must register, and a late application costs AED 10,000 unless the waiver applies.
• Leaving the UBO register until the bank asks for it: it is due within 60 days of licensing, and failures can cost up to AED 100,000.

UAE company setup terms explained

These terms appear on UAE licence, tax and visa paperwork.

Term	Meaning
Ejari	Dubai’s system for registering and renewing tenancy contracts, run by the Dubai Land Department. A Dubai mainland company’s office lease must be registered on it.
Establishment card	The company’s file with GDRFA Dubai or ICP. It is needed before the company can apply for work permits or sponsor residence visas.
Strategic impact activity	An activity that a Cabinet committee lists as having strategic impact. Its licence can carry extra conditions, including limits on foreign ownership.
Free Zone Person	For corporate tax, a juridical person incorporated, established or registered in a free zone, including a free zone branch of a foreign company. Only a Free Zone Person can become a Qualifying Free Zone Person.
Permanent establishment	A non-resident’s taxable presence in the UAE, such as a branch. It must register for corporate tax within 6 months of coming into existence.
Domestic permanent establishment	A free zone company’s place of business on the mainland, such as a mainland branch. Its profit is worked out as if it were a separate business dealing at arm’s length.