The United Arab Emirates' company rules: quick facts
- Entity
- Free zone company (FZ-LLC or FZCO) under the standard corporate tax rules
- Tax model
- Corporate tax on profit, 9% Source: mof.gov.ae, checked September 29, 2026. Federal Decree-Law No. 47 of 2022 Article 3(1), consolidated to Federal Decree-Law No. 28 of 2025 (Ministry of Finance, unofficial translation dated January 2026): 0% on taxable income up to the Cabinet threshold and 9% above. Threshold AED 375,000 (Cabinet Decision No. 116 of 2022, Ministry of Finance announcement of February 1, 2023)Headline corporate tax rate
- Tax on $100,000 of profit kept in the company
- 0% Source: mof.gov.ae, checked September 29, 2026. $100,000 profit = AED 367,250 at AED 3.6725 per USD, below the AED 375,000 zero band, so tax is AED 0 even without Small Business Relief. Revenue at 15% costs is AED 432,059, well within the AED 3,000,000 relief limit as well
- Tax on $100,000 of profit paid out to a non-resident owner
- 0% Source: mof.gov.ae, checked September 29, 2026. Article 45(1): State Sourced Income of a non-resident is subject to withholding tax at 0% unless the Cabinet sets another rate. Paying out AED 367,250 of profit costs AED 0 in UAE tax
- Dividend withholding for a non-resident owner
- 0% Source: mof.gov.ae, checked September 29, 2026. Corporate Tax Law Article 45(1), as replaced by Federal Decree-Law No. 40 of 2024
- Formed without visiting
- Yes
- Stripe available
- Yes Source: stripe.com, checked September 29, 2026. United Arab Emirates is listed as a supported country
- Bank or EMI account
- Workable
- Audit required
- Not stated
- EU list of non-cooperative jurisdictions
- Not listed Source: data.consilium.europa.eu, checked October 12, 2026. Economic substance: Ministry of Finance news of October 14, 2024
- FATF grey list
- Not listed Source: data.consilium.europa.eu, checked October 12, 2026. Economic substance: Ministry of Finance news of October 14, 2024
- Economic substance rules
- No
Free zone or mainland: which UAE company a non-resident forms
Most non-residents form a free zone company (FZ-LLC or FZCO), licensed by a free zone authority rather than an emirate's economic department. A single foreign owner can hold 100% and manage it, with no UAE partner, local director or resident manager, and the license package includes a flexi-desk or coworking membership as the registered address.
A mainland LLC is licensed by an emirate's economic department instead and pays the same corporate tax. Since the 2020 amendment to the Commercial Companies Law, it no longer needs Emirati shareholders outside activities with a strategic impact. For an owner abroad whose clients are also abroad, the free zone company does the same job with a simpler license.
The freelance permit is a third route, held by an individual rather than a company: business turnover up to AED 1,000,000 (about $272,000) a year stays outside corporate tax, and the permit carries a residence visa, so it fits a freelancer who moves to the UAE on a permit rather than an owner who stays abroad.
How a UAE company is taxed: 0%, 9% and Small Business Relief
Corporate tax is 0% on taxable income up to AED 375,000 (about $102,000) and 9% above it. At $100,000 of profit, AED 367,250, the whole profit sits in the 0% band, and dividends paid to a non-resident owner carry 0% withholding (Article 45).
Above that, Small Business Relief lets a company elect to be treated as having no taxable income while revenue stays at or below AED 3,000,000 (about $817,000), for tax periods ending on or before December 31, 2029. It is elected for each tax period, and revenue above the limit in any period ends it for later periods too.
A Qualifying Free Zone Person pays 0% on qualifying income and 9% on the rest, but it has to maintain adequate substance in the UAE (Article 18), needs audited accounts and cannot use Small Business Relief. Most consulting income to mainland or individual clients does not qualify, so most one-person service companies use the standard bands or the relief.
VAT is 5%, with registration mandatory once taxable supplies pass AED 375,000 (about $102,000) a year and voluntary from AED 187,500 (about $51,100). Services supplied to clients outside the UAE can generally be zero-rated.
David's note
I would not form a UAE company to save tax while staying in a high-tax country: the 0% is real only for the owner who actually moves. For a founder who does move, I would still pick the free zone for its paperwork and elect Small Business Relief every year, rather than chase Qualifying Free Zone Person status that consulting income rarely meets.
Cost and timeline to set up in the United Arab Emirates
Official fees come from the government or registry schedule. Market ranges cover formation and yearly upkeep through a provider, including a registered agent and filings. Timeline: Meydan Free Zone issues a standard digital license within a day, fully online, and its instant license (from AED 15,000, about $4,080) in under 60 minutes. A residence visa, if wanted, is a separate process.
How to open a company in Dubai or the UAE from abroad
The license needs no visit. Meydan Free Zone in Dubai issues a standard digital license within a day, fully online, and its instant license in under 60 minutes. A residence visa, if you want one, is a separate process that comes after the license and costs extra.
Opening a UAE free zone company as a non-resident
- Choose the free zone and the license activities, making sure the activity list covers the work you actually invoice.
- Apply online with your passport and the free zone's forms, and pick the company name.
- Pay the license package, which includes the flexi-desk or coworking membership that serves as the registered address.
- Receive the license: within a day for a standard digital license at Meydan Free Zone.
- Register for corporate tax with the Federal Tax Authority, even if you expect to owe nothing.
- Open a bank or fintech account, which takes longer than the license.
- Decide on a residence visa only if you will live in the UAE: it is a separate application and adds yearly costs.
UAE company annual filings and deadlines
Every UAE company files a corporate tax return, even at 0%, and renews its license every year. For a calendar-year company the return is due by September 30.
Yearly filings for a UAE free zone company
| Filing | Filed with | Deadline | Cost of missing it |
|---|---|---|---|
| Corporate tax return, including periods under Small Business Relief | Federal Tax Authority | 9 months after the end of the tax period | AED 500 (about $136) a month for the first 12 months, then AED 1,000 (about $272) a month |
| License renewal | The free zone authority | Each year, before the license expires | The free zone's own late fees, and no valid license to trade on |
| VAT return, once registered for VAT | Federal Tax Authority | The 28th day after each tax period | Federal Tax Authority penalties |
| Audited financial statements, Qualifying Free Zone Persons only | Kept for the Federal Tax Authority | For each tax period the status is claimed | Failing a condition ends the status from the start of that tax period |
| Your own tax return, with the dividends or the company's profit | The tax authority where you live | Your country's deadline | Your country's penalties and the tax itself |
Opening a bank account for a UAE company as a non-resident
The free zones advertise help here: Meydan Free Zone offers bank account support, and RAKEZ says its starter package makes the company eligible for an account. UAE banks still apply strict know-your-customer checks and usually want the owner to hold a UAE residence visa or come in person, so owners without a visa often start with a fintech account.
Expect questions about where you live, who your clients are and where the money comes from, with the license documents and your passport. The UAE applies the Common Reporting Standard, so bank and investment accounts held there are reported to your country of residence.
Where a UAE company's profit is really taxed
The UAE side is simple: at $100,000 of profit, AED 367,250, the company pays 0% whether it keeps the profit or pays it out. That only holds while the UAE is the country taxing it. The UAE's own law treats a foreign company effectively managed and controlled in the UAE as UAE resident (Article 11), and your home country applies the same logic in reverse. The owner situations look like this.
Tax on $100,000 of UAE company profit (AED 367,250) by owner situation
| Owner situation | UAE tax | What your country adds |
|---|---|---|
| Lives in the UAE on a residence visa and runs it there | 0% kept or paid out, and no personal income tax | Nothing, once your old tax residence has really ended |
| Lives in a high-tax country and runs it from home | 0% | Corporate tax on the profit every year through management and control or a permanent establishment |
| Lives abroad and keeps the profit in the company | 0% | Controlled foreign company rules can tax the kept profit in your hands, because 0% counts as low tax |
| Lives abroad and pays the profit out | 0%, nothing withheld | Full tax on the dividend, with no UAE tax to credit against it |
| Has no tax residence anywhere | 0% | Nothing on paper, but banks will ask where you are tax resident |
The first row is a free zone company run by a founder living in the UAE on its investor visa, and it works only if the move is real: how the UAE treats you as tax resident, and whether your old country lets go, decide the result.
A UAE company run from a laptop in a high-tax country
Manage the company from your home abroad and that country will usually treat it as resident there, or as having a permanent establishment, and tax its profit at the local corporate rate every year, while its controlled foreign company rules can reach profit you keep inside. The UAE's 0% then protects nothing, and there is no UAE tax to credit against the bill.
A UAE company for a non-resident, set up right and wrong
Works
You live in the UAE on the company's investor visa and have ended tax residence at home, or you budget for your home country taxing the profit. The company is registered for corporate tax, elects Small Business Relief for each tax period, files within 9 months of the year end and renews its license on time.
Fails
You stay in a high-tax country, run the free zone company from home, keep the profit inside because it is taxed at 0%, never register for corporate tax because nothing is due, and declare nothing where you live.
