How to Start a Business in the UAE: Guide for International Investors

Opening a company in the UAE can be an attractive solution for entrepreneurs who are looking to gain a foothold in the international market.
This jurisdiction offers great potential for development thanks to a well-thought-out tax system, modern free economic zones and a high level of economic stability. In 2025, interest in this area will remain significant, as the UAE plans to continue strengthening its position by actively attracting foreign investment and expanding the range of supported industries.

The UAE is renowned for its favourable conditions for foreign entrepreneurs. There is a clear tax environment, where corporate tax is usually limited to 9% only for profits over AED 375,000. At the same time, salaries and dividends of residents are exempt from personal income tax. This approach motivates financing of local projects and supports the attraction of external capital.

Many industries allow 100% business ownership, which removes significant restrictions for foreign founders. Thus, in most sectors of the economy there is no need to include UAE citizens as shareholders. This simplifies the company structure and accelerates the process of its formation in the local market. At the same time, for certain strategic areas there are still special rules that are important to know about in advance.

Another advantage is the presence of an extensive network of free zones, where their own corporate regulations apply. Each free zone can offer additional opportunities: tax incentives, simplified registration procedures, flexible reporting. This simplifies the life of entrepreneurs and allows them to save their budget, especially at the initial stage of development.

According to the UN Conference on Trade and Development, the total inflow of foreign direct investment into the UAE in 2023 reached US$30.7 billion. Support for international projects continues, and 2025 is expected to be no exception. The country continues to actively implement initiatives that help attract capital from abroad.

Below is the position of the UAE and the city of Dubai in some key rankings (data is approximately for 2024, unless otherwise indicated). They help assess how profitable it is to do business in this region:

These figures demonstrate the steady growth of the economy, as well as the UAE’s efforts to create a favorable infrastructure for new companies. The state is streamlining corporate legislation, increasing investment potential and stimulating entry into new markets. This collectively suggests that the business environment here remains stable and promising for business promotion.

When registering and working in the UAE, it is important to understand the advantages and limitations of different types of companies. There are three main options: a local (mainland) enterprise, a free zone company and an offshore company. Each format is designed for specific purposes. Below is a brief description:

The choice of company form depends mainly on the intended sales market, specific tax purposes and the need for resident visas. For example, local mainland companies are suitable for those who are focused on direct operations within the UAE and plan to hire employees. Although they have stricter requirements for tax and financial reporting, they provide a wide coverage of the domestic market.
And don't forget that advertising promotion of local business has its own nuances.

In turn, free economic zone companies are often chosen to conduct operations outside the Emirates, but with the possibility of a local presence. Starting in a free economic zone is characterized by the simplicity of online registration and flexible tax conditions for a certain level of presence. Offshore enterprises are preferred if the plan is to operate exclusively abroad, when there is no need to hire staff in the UAE and obtain a local visa.

In recent years, issues of transparency of corporate structures in the UAE have come to the fore. It has become mandatory to declare beneficial owners, information about whom is provided to the registration authorities within 60 days from the date of incorporation of the company. Such data includes full name, place of residence, citizenship, identity card details and the date of acquisition of the status of the ultimate owner. Access to information about beneficiaries is open only to authorized government agencies, which reduces the likelihood of its disclosure to third parties.

Along with this, in 2024, the requirement for economic substance, which was in effect in the UAE for a number of companies, was canceled. Now, in order to maintain a reasonable level of activity, companies do not need to submit additional forms and prove significant commercial activity in the Emirates. However, it should be borne in mind that the application of a zero corporate tax rate for free zone companies is possible only if a number of criteria are met. In particular, the company must meet the status of a "qualified FEZ resident", which implies a sufficient level of economic reality in the region.

The tax burden on business in the UAE itself remains moderate. From 2023-2024, a corporate tax rate of 9% on income over 375,000 dirhams has been set. At the same time, the preferential regime for salaries and some types of dividends is formally retained, and in free zones, a full or partial tax deduction is possible. At the same time, VAT (5%) and excise tax continue to apply in the UAE, which are worth paying attention to if the company conducts trade or production operations within the country.

The process of opening a company in the UAE is similar for different types of legal entities, but there are nuances. Below is a general algorithm:

• Determining the type of activity. It determines what kind of license you need to obtain (commercial, professional or industrial).
• Choosing the form of organization. It is decided whether it will be a local company, an option in the FEZ or an offshore with limited functionality in the UAE.
• Checking the name and requesting preliminary approval. The name should not violate ethical standards and the rights of third parties.
• Preparing the constituent documents. Usually, the charter and the memorandum of association are required. Often, everything can be done electronically.
• Choosing office space or a virtual office (if local regulations allow).
• Obtaining the final license. Payment of government fees.
• If necessary, registration of resident visas for employees and owners.

The average registration period usually does not exceed several working days if all the documents are prepared correctly. To better understand each step, you can study the detailed guide to opening a company in the UAE. It contains information on additional permits and technical details of filing documents.

In practice, working with experienced registration agents or specialized consultants can significantly accelerate the setup process. However, partnering with unverified or unqualified intermediaries may result in unnecessary expenses and complications. That’s why it’s crucial to assess the credentials of any representative in advance and confirm the exact list of required documents before starting the procedure.

WGG Digital Marketing Agency recommends checking in advance whether the type of activity you are considering has any specific requirements regarding licenses and permits. For example, financial companies and insurance companies are often regulated separately. It is necessary to check whether there is an additional fee for obtaining such licenses. The correct choice of Activity Code helps to avoid delays during registration.

It is useful to consider optimization schemes by combining different jurisdictions. Sometimes a company may operate a hotel or a production line in the mainland, while simultaneously providing consulting services through a company in a free zone. In this case, business entities benefit from each regime, minimize operating costs and provide flexibility for potential foreign partners.

One real-life example is a company engaged in the export of IT services to Europe. It chose to register in a free zone, where it retained a preferential tax rate, and placed its technical team in a separate local mainland company. This solution allowed it to hire qualified specialists on a long-term basis and issue them resident visas while maintaining a light tax regime.

Our company emphasizes that it is necessary to carefully analyze all aspects of a specific project, including the market, the planned staff, and the requirements for immigration documents. Even small mistakes at the start can lead to delays and additional costs in the future.