Company Setup & Licensing in the UAE

Almost every question about setting up in the UAE — cost, ownership, visas, tax, whether you can invoice a customer in Dubai — resolves differently depending on which of three jurisdictions issues your licence. Choose that first and most of the rest follows.

Mainland, also called onshore, means licensed by the economic department of one of the seven emirates — in Dubai, the Department of Economy and Tourism. A mainland company can trade throughout the UAE and contract with government bodies directly. Abu Dhabi's economic department describes the mainland proposition as "the flexibility to conduct business throughout the UAE" with "access to the local UAE market without restrictions". Company law comes from Federal Decree-Law No. 32 of 2021 on Commercial Companies, issued 20 September 2021 and in force from 2 January 2022.

Free zone means licensed by the authority of a specific zone. The UAE Government Portal states there are "about 40 free zones in the UAE". Each is its own regulator with its own companies regulations, its own registry, its own permitted activity list and its own published fee schedule. A free zone company is a UAE company, but the zone rather than an emirate's economic department licenses and supervises it.

Offshore means registered with an offshore registrar operating in the UAE — such as RAK International Corporate Centre or JAFZA Offshore — through a mandatory registered agent. These vehicles are built for holding and international activity. JAFZA states on its own site that a JAFZA offshore company "is not issued with a business licence, only a certificate of incorporation". The offshore registrars' regulations do permit more than the marketing suggests: JAFZA's Offshore Companies Regulations 2018 expressly allow an offshore company to hold a lease for a registered office in a designated freehold area, own property in such an area, hold a stake in another operating UAE company and maintain a UAE bank account — but section 14.3 requires appropriate licences or permits from the competent authorities before carrying out business activities.

The word offshore is also used loosely in marketing to mean "free zone". They are not the same thing, and conflating them is how people end up with a company that cannot do what they bought it for.

For decades a mainland limited liability company required a UAE national to hold at least 51% of the shares. That requirement is gone, but the story is more precise than the headline.

The reform came through Federal Decree-Law No. 26 of 2020, which amended the then Commercial Companies Law. Article Eight brought the decree into force on 2 January 2021, but Article Seven delayed the ownership provisions — the amendments to Articles 10, 151 and 329 — until six months after publication. What actually operationalised the change was Cabinet Resolution No. 55 of 2021, issued 30 May 2021, whose Article 6 states that it "shall come into force on 01/06/2021". That is the date to cite, not the decree's own commencement.

The current statute is Federal Decree-Law No. 32 of 2021 on Commercial Companies, in force from 2 January 2022. The UAE Government Portal summarises the effect: the reform "removed the requirement for 51 per cent Emirati ownership or a local agent for most business activities", and among the changes it lists the "removal of local agents — the obligation for branches of foreign companies to appoint a UAE national service agent has been eliminated". The ceiling on the shareholding a company may offer in an IPO also rose from 30% to 70%.

The branch point is worth pausing on, because it is still misreported. Article Six(1) of Federal Decree-Law No. 26 of 2020 repealed Article 329 of the old law, which was the national service agent article for foreign companies. Federal Decree-Law No. 32 of 2021 sets out the branch regime in Articles 335 to 339 with no agent requirement, and Ministerial Decision No. 138 of 2024 on registering branches and representative offices contains no service agent provision either. A branch of a foreign company needs a licence from the competent authority, Ministry approval and entry in the Foreign Companies Register — not a sponsor.

There is no single UAE free zone law. Each zone is established under its own instrument and operates its own regulations, and that is the defining fact about them: the rules that bind your company are the rules of your zone.

What a free zone regime covers is consistent; the answers differ everywhere. It defines the legal forms available. The UAE Government Portal lists, for free zones, a private limited liability company, a Free Zone Company (FZ Co.), a Free Zone Establishment (FZE), a public joint stock company and a branch of a local or international company — adding that "all free zones might not register all types". JAFZA's own page draws the line most people want: an FZE has a single shareholder, individual or corporate; an FZCO has two to fifty. The abbreviation "FZ-LLC" is common in the market but is not an official term across the zones, so treat it as shorthand rather than a form.

A regime also sets the permitted activity list — you may only conduct what is on it — the facility requirements, the visa allocation attached to each package, share capital rules, and the procedures for amendments, transfers and liquidation. Naming conventions change too: from 2 January 2025 all newly registered DMCC companies take the suffix FZCO, replacing the DMCC suffix.

Federal law still reaches into the zones. Corporate tax, VAT, ultimate beneficial owner filings, economic substance obligations, anti-money-laundering registration where relevant, and from 2027 electronic invoicing all apply. A free zone licence is a company-law and customs arrangement, not a tax exemption. The UAE Government Portal's own economy page still describes free zones as offering exemption from corporate taxes — that clause predates the corporate tax regime and should not be relied on.

A UAE trade licence is issued for named activities, and the activity determines almost everything downstream: which authority can license you, whether external approvals are needed, whether ownership is restricted, what premises you must hold, and which visa allocation applies.

There is no single national licence taxonomy, and the official sources say different things — which is itself the honest answer. The UAE Government Portal reports that as per the Ministry of Economy and Tourism there are six types of licence: industrial, commercial, professional, tourism, agricultural and crafts. The same page records that Abu Dhabi's economic department offers seven types, including a dual licence and a freelancer licence, and that Invest in Dubai lists eight, including eTrader, dual, instant, SME and Intelaq categories. Free zones use their own category names again.

Licensing is an emirate-level function. The authorities are Abu Dhabi's ADDED, Dubai's Department of Economy and Tourism, Sharjah's SEDD, the economic departments of Ras Al Khaimah, Ajman and Umm Al Quwain, and Fujairah and Dibba municipalities, alongside the Ministry of Economy and Tourism federally.

The "business activity list" people search for is not one downloadable national document. The UAE Government Portal states there are "more than 2,000 business activities to choose from in the UAE". Federally, the National Economic Register, delivered through the Growth platform under Federal Decree-Law No. 37 of 2021 on the Commercial Register, is ISIC4-based and connects more than 46 entities across the seven emirates, issuing a Unified Economic Number. In practice you select from your licensing authority's own list, and an activity on one authority's list may not exist on another's.

Some activities require a sector regulator's approval before any licence issues — health, education, financial services, transport, food and media are the usual examples. The practical sequence is therefore backwards from how most people approach it: settle the activity first, confirm which authorities license it and on what conditions, and only then choose the jurisdiction.

This is the most-searched and least-answerable question on the topic, and it deserves a direct answer: there is no official, central, published price for setting up a UAE company. Licensing fees are set by each emirate's economic department and by each free zone authority individually, published on that authority's own site, and revised without federal announcement.

That does not mean nothing is published. A number of official figures are, and they are worth knowing because they anchor a quote. What is not published is often the most-quoted item of all: Dubai's Department of Economy and Tourism operates a per-activity cost calculator inside its e-services rather than a current tariff table, so there is no published current DET issuance fee, renewal fee or late-renewal fine. The widely circulated "AED 200 per month" late-renewal figure is not invented: it is item 6 of Schedule 2 to Executive Council Resolution No. 13 of 2011, read at source, sitting beside AED 250 at item 5 for failing to renew within the prescribed period. What it is not is DET pricing today, so cite it as legislative history and never as a current fine.

The steps below describe the shape of the process. Order, stage names and documents vary between the mainland departments and between free zones, so treat this as a map and confirm each stage with your licensing authority. Federally, the Basher platform is described by the UAE Government Portal as enabling investors "to establish their businesses in the UAE in 15 minutes", and Dubai has established a Unified Digital Window for establishing companies under Decree No. 13 of 2024.

One structural point before you start. Article 9 of Federal Decree-Law No. 32 of 2021 permits exactly five company forms — joint liability company, limited partnership, limited liability company, public joint stock company and private joint stock company — and Article 9(2) provides that any other form is null and void. Article 8(3) allows a one-person company. Sole establishments and civil companies are not Commercial Companies Law forms; they are emirate-licensed structures under civil law, which is precisely why the local service agent question attaches to them and not to an LLC.

The most expensive misconception in UAE company formation is that a free zone licence means no tax. It does not.

Free zone companies are taxable persons under Federal Decree-Law No. 47 of 2022. They must register with the Federal Tax Authority and file, even where every dirham is ultimately taxed at 0%. What a free zone can deliver is Qualifying Free Zone Person status: 0% on Qualifying Income under Article 3(2)(a) and 9% on income that is not Qualifying Income under Article 3(2)(b).

Article 18(1) sets four conditions and then adds a fifth limb — any other conditions prescribed by the Minister. Ministerial Decision No. 229 of 2025 uses that limb to add two more, so in practice there are seven: adequate substance in the State; Qualifying Income as determined by Cabinet decision; not having elected out under Article 19; compliance with the arm's length principle in Article 34; compliance with the transfer pricing documentation requirement in Article 55; the de minimis test; and audited financial statements. Do not repeat the common line that there are five conditions.

Qualifying Income is defined by Cabinet Decision No. 100 of 2023, which took effect retroactively from 1 June 2023 and repealed Cabinet Decision No. 55 of 2023. It falls into four categories, and the free zone counterparty must be the Beneficial Recipient — an anti-conduit test that catches back-to-back structures. Article 8 requires the core income-generating activities to be performed in a Free Zone or Designated Zone with adequate assets, full-time employees and operating expenditure.

The activity lists moved in 2025. Ministerial Decision No. 265 of 2023 has been repealed and replaced by Ministerial Decision No. 229 of 2025, which lists thirteen Qualifying Activities and five Excluded Activities. The changes matter commercially: treasury and financing services now qualify when performed for the entity's own account as well as for related parties, and Qualifying Commodities were widened to include industrial chemicals, associated by-products and environmental commodities such as carbon credits — gated on a quoted price and excluding retail-packaged goods. Any adviser still working from Ministerial Decision No. 265 of 2023 is working from a repealed instrument.

Residence visas flow from the licence, and the mechanics differ by jurisdiction.

On the mainland the sequence runs: open a Ministry of Human Resources and Emiratisation file, obtain the MoHRE establishment card linked to the licence, obtain an electronic signature card after the premises are inspected, then apply for work permits. Separately you open an immigration file and obtain an immigration establishment card from ICP or, in Dubai, GDRFA. Two different establishment cards exist and are routinely confused — one is the labour file, the other the residency file. From there: work permit, entry permit, medical fitness test, Emirates ID, labour card, residence visa. Free zone companies run the equivalent process through the zone authority, which acts as intermediary; DIFC and ADGM operate independent employment frameworks.

Quota is the practical constraint, and there is no federal formula. For the mainland, the UAE Government Portal states that the ministry determines the quota according to "the company's legal status, the size of the work facilities, the projects undertaken, and business requirements", under Cabinet Resolution No. 203 of 2022 on electronic quotas of work permits. For free zones it states the number of visas "depends on various factors such as the package they have signed up for". Concrete ratios exist only zone by zone — DMCC, for example, publishes a flexi desk allowance of up to three visas and one visa per nine square metres of physical space. That is DMCC's rule, not a national one, and the widely quoted "200 square feet per visa" has no official federal basis.

Can a free zone employee work in the mainland? Not by choice. A residence visa sponsored by a free zone entity is granted for employment by that entity, in that location, in that role. Where staff genuinely need to serve mainland customers or occupy mainland premises, the arrangement must be regularised — in Dubai, Executive Council Resolution No. 11 of 2025 now provides the branch and permit routes for the company itself. The exposure sits with both employer and employee.

This question is usually asked as though "free zone" and "mainland" describe property regimes. They do not. Real estate ownership is governed by each emirate's property law and its designated freehold and leasehold areas, which is a separate framework from the one that licenses companies.

What the licence affects is which entity can hold title. Some emirates restrict which entity types may be registered as owner in which areas, and certain offshore registrars are specifically recognised for holding property. JAFZA's Offshore Companies Regulations 2018 expressly permit an offshore company to own property in a designated freehold area and to hold a lease for its registered office there — which is exactly why offshore vehicles are so often used as property-holding structures rather than trading ones.

There is a corporate tax dimension that is easy to miss. Under Ministerial Decision No. 229 of 2025 the ownership or exploitation of immovable property is an Excluded Activity, other than Commercial Property located in a Free Zone where the transaction is with a Free Zone Person. A free zone entity used to hold residential property, or commercial property outside a free zone, will find its 0% expectation misplaced.

Because the answer turns on the emirate, the area, the entity type and the intended use, there is no general "better" jurisdiction for property. Get the specific combination checked with the land department of the emirate concerned before structuring around it.

A UAE trade licence is an annual instrument. Renewal is a live compliance obligation, and lapsing blocks visa renewals, banking and government transactions.

Renewal generally requires a valid registered tenancy covering the licence period — in Dubai, an Ejari registration — settlement of outstanding fees and fines, and confirmation that activity and shareholding details are still accurate. Beyond that, honesty requires an admission: Dubai's Department of Economy and Tourism publishes no renewal fee schedule and no late-renewal fine schedule, operating a per-activity calculator inside its e-services instead. Any specific renewal figure or monthly fine you read for DET is unsourced.

Amendment covers changes of activity, shareholding, manager, legal form, name or address, each with its own fee and, where the memorandum changes, notarisation.

Cancellation is the step most often done badly. Not renewing does not close a company; it leaves a registration accruing penalties. For a Dubai mainland company the UAE Government Portal sets out two phases: notarised general assembly minutes appointing a liquidator with the liquidator's acceptance letter, a dissolution certificate at AED 520, and an announcement in two Arabic local newspapers for one day giving debtors 45 days; then the original newspaper, the liquidator's final report, a no-objection declaration and cancellation of the MoHRE labour card. Other emirates vary — Ajman specifies 15 days for a sole proprietorship and 45 for an LLC; Abu Dhabi requires a court decision and termination of the service agent.

For a free zone the sequence is a shareholder resolution, cancellation of all employee and investor visas, settlement of obligations, deregistration with the FTA where applicable, then the cancellation or liquidation application with clearances. DMCC's own guideline requires a liquidator for companies but not branches, Dubai Customs clearance and a landlord no-objection certificate, publishes the licence termination for 14 days and the de-registration for a further 14, and puts the total at 45 to 60 days. Offshore closure is different in kind: it is a strike-off or dissolution handled through the registered agent, with no visa or establishment card stage — RAK ICC allows a 30-day grace period from expiry and treats struck-off companies as dissolved only after three years.

Published cancellation fees include the Dubai dissolution certificate at AED 520, the gazetted Dubai schedule's AED 2,000 each for dissolution with liquidator appointment, deregistration from the commercial register and revocation of a ceased establishment's licence, and RAK ICC's liquidation and voluntary strike-off at AED 1,500 each. DMCC's own termination guideline sets out the procedure but publishes no amounts in it, and we could not open a current DMCC schedule of charges to verify one — so we state no DMCC figure rather than repeat a number we cannot source. These are per-authority items charged by different bodies; they are not comparable and they do not add up to a cost of closing.

Formation is the cheap part. The obligations that attach from day one are where the real annual cost sits, and they apply to free zone entities as much as mainland ones.

Corporate tax registration with the Federal Tax Authority is mandatory for a taxable person regardless of whether tax is payable, and the return and payment fall due nine months after the end of the tax period. VAT registration is mandatory once taxable supplies and imports exceed AED 375,000 in the preceding twelve months or are expected to exceed it in the next thirty days, with voluntary registration available from AED 187,500.

Electronic invoicing is the next obligation to land. Under Ministerial Decision No. 244 of 2025, as amended by Ministerial Decision No. 66 of 2026, a business with revenue of AED 50 million or more must appoint an Accredited Service Provider by 30 October 2026 and be live on 1 January 2027; everyone else appoints by 31 March 2027 and goes live on 1 July 2027. A company being formed now should assume it is in the second phase and choose accounting software an accredited provider can connect to.

On top of that sit accounting records to a standard the tax law accepts, audited financial statements where the free zone authority or the qualifying regime requires them, ultimate beneficial owner filings, economic substance reporting where the activity is relevant, and anti-money-laundering registration for designated non-financial businesses and professions.

None of this is optional, and none of it is included in a formation package unless the package says so in writing.

A large share of company-setup searches are for named consultancies, their reviews, their photographs and their offices. We publish no rankings, ratings, reviews or photographs of setup consultancies, and the reason is worth stating plainly: we hold no verified review data on any of them, and a "best business setup consultants" list not built on verifiable evidence is advertising dressed as research. Publishing one would mean inventing information about third parties.

What is useful, and verifiable, is how to check a firm yourself.

A setup consultancy is itself a licensed UAE business, so ask for its trade licence and verify the number with the issuing authority — the National Economic Register exists for exactly this. Establish what the firm actually is: a licensed corporate services provider, a law firm, a registered tax agent listed by the Federal Tax Authority, or a marketing intermediary that subcontracts the work. These carry different accountability, and only a registered tax agent may act for you before the FTA.

Then interrogate the quote. Insist that government fees and professional fees are itemised line by line, and that the renewal cost is stated alongside the first-year cost. Ask which authority issues your licence, then obtain that authority's published schedule yourself and compare — several free zones publish theirs, and where a zone publishes nothing you should know that every figure you have been given came from an intermediary.

Treat these as warning signs: a single all-in price that will not be itemised; a guaranteed bank account or guaranteed visa approval; pressure to sign before you have seen the authority's own fees; advice that a free zone licence removes tax obligations; a recommendation of a specific zone made before anyone asked what your activity is; and any citation of "Article 73" for a local service agent requirement, which indicates the adviser is repeating a myth rather than reading the law.

Office photographs and star ratings tell you nothing about whether the structure you are sold will survive an FTA review three years from now.