By Dubai Tax Resident Editorial Team · Last reviewed: October 2026
Setting up a business in Dubai means choosing between a free zone company and a mainland company, then obtaining a trade licence, an establishment card, residence visas and a bank account. Free zones offer fast, low-cost setup and potential 0% corporate tax on qualifying income, but restrict trading directly with the local market. Mainland companies can trade anywhere in the UAE and pay the standard 9% corporate tax above AED 375,000 of profit. For most consultants and online businesses relocating from Europe, a free zone company is the typical starting point.
Key facts
- Ownership: 100% foreign ownership in free zones and for most mainland activities
- Corporate tax: 0% up to AED 375,000 profit, 9% above; 0% possible for qualifying free zone income
- Registration: every company must register for corporate tax with the FTA
- VAT: registration required above AED 375,000 of taxable supplies
- Typical first-year cost: roughly AED 15,000 to 50,000 for a free zone company with one visa (indicative)
- Timeline: licence in days to a few weeks; bank account often several weeks more
Free zone vs mainland: the key differences
| Free zone | Mainland | |
|---|---|---|
| Regulator | Free zone authority (e.g. DMCC, IFZA, Meydan, DIFC) | Dubai Department of Economy and Tourism (DET) |
| Market access | International and within the free zone; restrictions on trading with UAE mainland customers | Whole UAE market, including government contracts |
| Office | Flexi-desk options available | Physical office with Ejari usually required |
| Corporate tax | 0% on qualifying income if conditions are met, otherwise 9% | 9% above AED 375,000 |
| Visa quota | Linked to package and office size | Linked to office size |
| Setup cost | Lower | Higher |
Since amendments to the Commercial Companies Law in 2021, foreigners can own 100% of a mainland company for most activities without a local partner. Some strategic activities still have restrictions, so check your activity on the DET portal.
Which one should you choose?
- Consultants, freelancers, holding and online businesses serving clients abroad: a free zone company is usually cheaper and simpler.
- Retail, restaurants, contractors and anyone selling to UAE consumers or the government: mainland.
- Financial services and funds: DIFC, which has its own regulator and common-law courts.
- Trading physical goods: a free zone near a port, such as JAFZA, or a mainland licence if you sell locally.
Step-by-step: how to set up a company in Dubai
- Choose your activity from the authority’s activity list. It determines where you can register and what approvals you need.
- Choose jurisdiction and legal form, for example an FZ-LLC or FZCO in a free zone, or an LLC on the mainland.
- Reserve a trade name and obtain initial approval.
- Submit documents: passport copies, business plan where required, and shareholder details including ultimate beneficial owners.
- Sign the Memorandum of Association and secure an office or flexi-desk.
- Receive your trade licence and establishment card.
- Apply for residence visas for yourself as investor or employee, then your family.
- Open a corporate bank account. Banks review your business model, source of funds and UAE substance carefully, so prepare contracts, invoices and a clear profile.
- Register for corporate tax with the Federal Tax Authority, and for VAT if you exceed the threshold.
How much does business setup in Dubai cost?
Costs depend on the authority, activity, number of visas and office type. As an indication for 2026, a free zone company with a flexi-desk and one residence visa typically costs AED 15,000 to 50,000 in the first year, including licence, registration, establishment card and visa fees. A mainland company usually costs more because of office rent, often AED 40,000 to 100,000 or more in year one. Renewal costs each year are lower than setup costs but include licence renewal, office and visa renewals. Always compare full packages rather than the headline licence price.
Corporate tax for Dubai companies
Under Federal Decree-Law No. 47 of 2022, UAE companies pay 0% on taxable profit up to AED 375,000 and 9% above. If you are leaving a European country with shares in an existing company, check the exit tax rules before moving it. A Qualifying Free Zone Person can pay 0% on qualifying income if it maintains adequate substance in the UAE, earns qualifying income, prepares audited financial statements and keeps non-qualifying revenue within the de minimis limit. Small businesses with revenue under AED 3 million can elect small business relief for eligible periods. All companies must keep proper records and file an annual return, even when no tax is due.
Your company and your personal tax residency
A Dubai company does not make you a UAE tax resident, and it does not stop your home country taxing you. If you keep running the company from Germany, the UK or Finland, your home country may treat the company itself as tax resident there because its place of effective management is there. To make the structure work, you need to live in the UAE, manage the business from the UAE and break residency at home. That is why company setup, visa and personal tax residency should be planned together.
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Frequently asked questions
Yes. Foreigners can own 100% of free zone companies and, since 2021, of mainland companies for most business activities. A small number of strategic activities still have ownership restrictions.
A free zone company is licensed by a free zone authority, is cheaper to set up and can benefit from 0% tax on qualifying income, but has restrictions on trading with the UAE mainland. A mainland company can trade anywhere in the UAE and pays standard corporate tax.
As a 2026 indication, a free zone company with one visa usually costs AED 15,000 to 50,000 in the first year. Mainland companies often cost AED 40,000 to 100,000 or more because of office requirements.
A free zone licence can be issued within a few days to a few weeks once documents are complete. Visas take a few more weeks, and opening a corporate bank account often takes several weeks longer.
Free zone companies must register and file corporate tax returns. They can pay 0% on qualifying income if they meet the Qualifying Free Zone Person conditions, including substance and audited accounts; other income is taxed at 9% above AED 375,000.
Free zones offer flexi-desk or shared office packages that satisfy licensing rules. Mainland companies generally need a physical office with a registered Ejari tenancy contract.
Yes. As a shareholder or employee of your own company, you can apply for a residence visa within the company’s visa quota, and then sponsor your family.
You can, but it is risky. If the company is managed from your home country, that country may treat it as tax resident there. To benefit from UAE tax rules, management and decision-making should genuinely take place in the UAE.
It is achievable but slower than in Europe. Banks check your business model, source of funds and UAE presence. A clear business profile, client contracts and a residence visa improve your chances.
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Disclaimer: This article provides general information only and is not legal or tax advice. Costs are indicative and licensing rules change; confirm current requirements with the relevant authority or a qualified adviser.