Business Setup in UAE: Structures, Costs and Process (2026)
The UAE is now the top destination for Indian founders incorporating abroad. In 2023–24, India was the single largest source of new UAE company registrations, ahead of Pakistan, the UK and the US. This guide to business setup in UAE covers company registration, jurisdiction choice, tax structure and remote setup for India-based founders, across all seven emirates.
What Is UAE Business Setup?
UAE business setup means legally registering a company in the UAE as a free zone, mainland or offshore entity. Each jurisdiction differs in legal framework, tax treatment and market access. The UAE levies no personal income tax, a 9% corporate tax on qualifying income above AED 375,000 with significant free zone exemptions, and allows 100% foreign ownership across most structures since the 2021 Commercial Companies Law amendment.
Company formation in UAE is governed by three separate systems:
- Free zone companies: governed by the relevant free zone authority. There are 40+ across the seven emirates, including IFZA, DMCC, RAKEZ, SHAMS, Meydan, DIFC and ADGM.
- Mainland companies: governed by the Department of Economic Development (DED) of the relevant emirate, such as Dubai’s DET or Abu Dhabi’s ADDED.
- Offshore companies: governed by RAK International Corporate Centre (RAK ICC) or the Jebel Ali Free Zone Authority (JAFZA) offshore registry.
Most UAE companies are established as a limited liability company, whether that sits on the mainland as an LLC or inside a free zone as an FZ-LLC or FZE. The structure determines liability, shareholding and visa eligibility; the jurisdiction determines where you can trade.
UAE Company Registration: Step by Step
UAE company registration follows the same steps regardless of jurisdiction:
- Choose your jurisdiction: free zone, mainland or offshore, which determines your tax treatment, market access and cost.
- Choose your emirate: Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Ajman, Fujairah or Umm Al Quwain. Free zones require choosing the authority; mainland requires choosing the emirate’s DED.
- Choose your licence type: professional for service businesses, commercial for trading, industrial for manufacturing, or e-commerce for online trading.
- Choose your business activities: the UAE maintains an approved activities list, and each licence can cover multiple activities.
- Submit documents: passport copy, photo and application form. Indian founders may need apostilled documents for corporate structures.
- Receive your trade licence: issued as a PDF for most free zones within 3–7 business days.
- Apply for an investor visa, if required: entry permit, status change, medical fitness, biometrics and Emirates ID.
- Open a UAE bank account: Emirates NBD, Mashreq, Wio Bank, RAKBANK, FAB and ADCB are the most common for new incorporations.
Business Setup in UAE Free Zone Jurisdictions
Business setup in UAE free zone jurisdictions gives foreign entrepreneurs 100% ownership, 0% tax on qualifying income and no currency restrictions. There are 40+ free zones across the UAE’s seven emirates, and cost varies more by emirate than by sector.
- Dubai free zones are the most internationally recognised and the most expensive. DMCC, DIFC, IFZA, Meydan, DAFZA and JAFZA between them cover commodities, financial services, logistics and general trading, with entry pricing from around AED 12,900 a year.
- Sharjah free zones offer the lowest credible entry point in the UAE. SHAMS (Sharjah Media City) starts from AED 5,750 a year and suits creative, media, consulting and professional services, with licences issued in as little as one working day. SAIF Zone and Hamriyah serve trading and light industrial businesses, and SRTIP covers research and technology.
- Ras Al Khaimah is built around RAKEZ, which spans trading, manufacturing, professional services and e-commerce from roughly AED 7,500 a year, with industrial land and warehousing available at a fraction of Dubai’s cost. RAK ICC operates separately as an offshore registry.
- Abu Dhabi free zones are sector-focused rather than general-purpose. ADGM is a common law financial centre, Masdar City targets clean energy and sustainability, KEZAD covers industrial and logistics, and twofour54 serves media.
- Ajman, Fujairah and Umm Al Quwain compete purely on price. Ajman Free Zone, Fujairah Creative City and UAQ Free Trade Zone all start below AED 7,000 a year and work well for solo founders and lean trading operations that do not need a Dubai address.
Most free zones take 3–7 business days to set up: SHAMS can be as fast as one working day, IFZA runs 3–5 days and DMCC 5–7 days. Most allow 1–6 investor visas per licence depending on the package, whether flexi-desk, shared desk or private office, and employee visa quotas scale with office space.
UAE Mainland Company Setup
UAE mainland company setup means registering with the Department of Economic Development of the relevant emirate. Mainland is the only structure with unrestricted access to the UAE domestic market.
- 100% foreign ownership has been available in most activities since 2021, when the historical 51% UAE-national sponsor requirement was abolished for most sectors.
- Restricted activities, including oil and gas, certain professional services and government-sector work, still require UAE national involvement.
- Minimum share capital: none for most activities, with exceptions for banking, insurance and some manufacturing.
- Setup timeline: 7–15 business days depending on emirate and activity.
- Annual cost: AED 15,000–45,000 depending on emirate, activity and office size.
Dubai’s DET is the most expensive mainland authority and the most prestigious. Abu Dhabi’s ADDED suits Abu Dhabi-focused operations and government-adjacent work. Sharjah, Ras Al Khaimah and Ajman DEDs run materially lower for activities that do not need a Dubai address, typically 20–30% below the Dubai equivalent.
UAE Offshore Company Formation
UAE offshore company formation means incorporating a UAE company that holds assets and invoices internationally but does not trade inside the UAE. It is the cheapest UAE structure to maintain and the fastest to register, but it is a holding vehicle rather than an operating company. There are two UAE offshore registries:
- RAK ICC (Ras Al Khaimah International Corporate Centre): the most widely used UAE offshore jurisdiction, recognised in 175+ countries. Annual cost AED 8,000–12,000, with incorporation typically in 3–5 business days, used for holding structures, intellectual property ownership and international trading.
- JAFZA Offshore (Jebel Ali Free Zone Authority): the older registry, based in Dubai. It costs more than RAK ICC but carries a Dubai address, which matters for client perception in some sectors, and is the only UAE offshore structure permitted to hold Dubai property directly.
| Offshore | Free zone | |
|---|---|---|
| Trade inside the UAE | No | Within the zone and internationally |
| Sponsor UAE residence visas | No | Yes, 1–6 typically |
| Lease UAE office space | No | Flexi-desk or office included |
| Open a UAE bank account | Harder, case by case | Standard |
| Hold shares in other companies | Yes | Yes |
| Own UAE property | JAFZA Offshore only, in Dubai | Restricted |
| Annual maintenance cost | Lowest | Moderate |
Indian founders use UAE offshore companies to hold shares in Indian operating companies, protect intellectual property outside India’s jurisdiction, structure international payment processing for e-commerce, and hold investments in GCC and African operations. An offshore company must appoint a registered agent, who files the incorporation and maintains the registered address, and no physical presence is required at any stage. It still triggers FEMA obligations: holding shares in a RAK ICC or JAFZA Offshore entity is an Overseas Direct Investment and needs the same ODI filing as any other structure.
Company Setup in UAE: Cost Breakdown
Company setup in UAE costs vary significantly with jurisdiction, free zone, activity type and visa count. Below is a realistic breakdown.
Free Zone Cost Breakdown
| Cost Component | Amount |
|---|---|
| Government registration fee | AED 2,000–5,000, set by the free zone authority |
| Trade licence fee | AED 3,000–8,000/year |
| Flexi-desk or address fee | AED 1,500–5,000/year |
| myHQ professional service fee | AED 2,000–4,000, one-time |
| Investor visa, per visa | AED 7,000–10,000, covering entry permit, status change, medical and Emirates ID |
| Total Year 1, licence + 1 visa | AED 15,000–25,000, depending on free zone |
Mainland Cost Breakdown
| Cost Component | Amount |
|---|---|
| DED trade licence fee | AED 8,000–15,000/year, varies by emirate and activity |
| Business centre or Ejari address | AED 5,000–10,000/year |
| MOA notarisation | AED 1,000–2,000, one-time |
| myHQ professional service fee | AED 3,000–5,000, one-time |
| Investor visa | Same as free zone |
| Total Year 1, licence + 1 visa | AED 25,000–40,000 |
Additional Costs for Indian Founders
- Document apostille for Indian-issued board resolutions and power of attorney: AED 1,500–3,000 per set
- Medical fitness test for the investor visa: AED 300–500 per person
- Emirates ID: AED 370 per visa holder
- Corporate tax registration: no government fee, but ongoing compliance needs a registered UAE accountant
Low Cost Business Setup in UAE: Which Free Zone Is Cheapest?
| Free Zone | Emirate | Licence Cost | Best For |
|---|---|---|---|
| SHAMS (Sharjah Media City) | Sharjah | From AED 5,750/year | Creative services, consulting, media |
| Meydan Free Zone | Dubai | From AED 6,000/year | E-commerce, consulting, general trading |
| UAQ Free Trade Zone | UAQ | From AED 6,500/year | Trading, general activities |
| Fujairah Creative City | Fujairah | From AED 7,000/year | Creative and media businesses |
| RAKEZ (Ras Al Khaimah) | RAK | From AED 7,500/year | Trading, manufacturing, professional services |
| IFZA | Dubai | From AED 8,500/year | All activities, most flexible |
These are licence fees only: add a flexi-desk at roughly AED 2,000–5,000 a year and visa costs of AED 7,000–10,000 per visa for the total Year 1 figure. Cheapest on paper is not always cheapest in practice, since a zone that excludes your activity will cost more to fix than it saved, so check activity lists and renewal terms before committing.
UAE Corporate Tax and VAT Registration
Corporate tax and VAT are both federal, so the rules are identical in every emirate and every free zone.
- Corporate tax was introduced in June 2023. It is 0% on taxable income up to AED 375,000, with Small Business Relief available for revenue under AED 3 million, and 9% above that threshold. Free zone companies qualifying as a Qualifying Free Zone Person (QFZP) pay 0% on qualifying income, which covers income from international clients, transactions with other free zone companies, and passive income such as dividends, royalties and interest. Non-qualifying income, typically from UAE mainland transactions, attracts 9%. All UAE entities, whether free zone, mainland or offshore, must register with the Federal Tax Authority regardless of income level.
- VAT registration is separate and often overlooked at setup. UAE VAT is charged at 5%. Registration becomes mandatory once taxable supplies and imports exceed AED 375,000 in the preceding 12 months, or are expected to exceed that figure within the next 30 days. Voluntary registration is available from AED 187,500, which many founders take so input VAT on setup costs, software and professional fees can be reclaimed. Exports of goods and services to customers outside the UAE are generally zero-rated, so a free zone company billing only international clients may stay below the mandatory threshold indefinitely, though the test should be reviewed each year. Returns are filed quarterly for most businesses, and late registration carries penalties.
- Corporate tax and Indian residents: UAE corporate tax and Indian income tax are separate. A UAE entity’s tax position does not automatically determine the founder’s Indian tax liability. The India–UAE Double Tax Avoidance Agreement (DTAA) governs how income is taxed in both jurisdictions, and myHQ works with your CA on the structuring.
UAE Business Setup for Indian Founders: FEMA and RBI
Indian residents setting up a UAE company must comply with India’s Foreign Exchange Management Act (FEMA). They can invest in foreign companies under the Overseas Direct Investment (ODI) route, and the Liberalised Remittance Scheme (LRS) allows up to USD 250,000 per financial year without prior RBI approval for most structures.
- RBI approval is needed for: manufacturing entities under the ODI route, structures involving more than USD 250,000 in a financial year, and certain financial services entities.
- RBI approval is not needed for: most free zone service company setups within LRS limits, and offshore holding companies within LRS limits.
- Compliance checklist: file Form ODI-1, or its current equivalent, with your Authorised Dealer (AD) bank within 30 days of investment; maintain annual compliance filings, specifically the Annual Performance Report; and ensure DTAA documentation is in place for income repatriation.
myHQ’s India team handles ODI notification and coordinates with your AD bank, included in the standard setup fee rather than charged separately.
Opening a Company in UAE: Common Mistakes to Avoid
- Choosing a free zone based on price alone. The cheapest option may carry activity restrictions that don’t cover your business. Verify your specific activities are permitted before choosing.
- Not accounting for UAE banking realities. A trade licence does not guarantee a bank account. Banks run their own KYC, and Indian-passport holders face extra scrutiny at some banks. myHQ’s bank introduction letter is designed to address this.
- Skipping the FEMA and ODI notification. Indian founders who invest without filing an ODI notification with their AD bank are in violation of FEMA. The filing is straightforward, but it must happen within 30 days of investment.
- Assuming 0% tax applies to all free zone income. 0% corporate tax applies only to qualifying income, and income from UAE mainland customers may attract 9%. Get a QFZP status assessment before assuming otherwise.
- Not getting a fixed-price quote. Several consultants charge separately for apostille, bank introduction and renewal reminders. Ask for an itemised, all-in quote before signing.
Business Setup Services in UAE: What myHQ Includes
Business setup services in UAE cover company registration, government liaison, visa processing and banking introductions. When choosing a consultant, check their verified track record, whether they cover all three jurisdictions, their India-side capability on FEMA, apostille and RBI, which banks they have introduction relationships with, whether they support you after setup, and whether they give a fixed-price itemised quote. myHQ is backed by ANAROCK Group, covers all three jurisdictions, and includes India-side compliance in the same engagement:
- Licence setup: jurisdiction and free zone recommendation based on your business profile, activity selection, government form preparation and submission, apostille coordination, and trade licence delivery.
- Visa services: investor visa application covering entry permit, status change, medical fitness, biometrics and Emirates ID, plus employee visa processing and renewals.
- Banking: a bank account introduction letter, introductions to Emirates NBD, Mashreq, Wio Bank and RAKBANK based on company profile, and follow-up on application status.
- Ongoing: annual licence renewal, VAT registration, corporate tax registration, and registered agent services for offshore companies.
UAE Company Formation: Frequently Asked Questions
What are the three types of business licences in the UAE?
The UAE’s three core licence categories are professional, commercial and industrial. A professional licence covers service businesses that sell expertise, such as consultants, IT services and agencies. A commercial licence covers buying, selling and distributing goods. An industrial licence covers manufacturing, processing and assembly, and requires physical premises. Many free zones now issue a fourth category for e-commerce, and some add tourism or media licences.
What is an LLC in the UAE?
An LLC, or limited liability company, is the most common mainland structure in the UAE. Shareholder liability is limited to their share capital, and the company can trade freely across the UAE domestic market. Free zones use equivalent structures under different names, the FZ-LLC for multiple shareholders and the FZE for a single shareholder, which carry the same liability protection but are restricted to trading within the zone and internationally.
What is the minimum capital requirement for UAE company registration?
For most free zones there is no mandatory minimum paid-up capital. For mainland limited liability companies, the Commercial Companies Law references AED 300,000 minimum share capital, but the DED does not require this to be deposited for most activities in practice. Banks and insurance companies face their own specific capital requirements.
Can a UAE company have multiple shareholders?
Yes. Free zone companies can have up to 50 shareholders under the FZ-LLC structure, and mainland LLCs can too. Offshore companies registered with RAK ICC also allow up to 50. A single-person free zone company uses the FZ-Establishment (FZE) structure instead.
Is a UAE company valid for Google AdSense, Stripe, PayPal and other payment processors?
Yes. A UAE free zone company can register with Stripe, PayPal, Payoneer and most international payment processors as a UAE entity. This is a practical advantage for Indian founders, since Indian entities face significant friction with these processors.
Can I set up a UAE company without a physical address?
Free zone companies get a flexi-desk address included in most packages. It is a legitimate UAE business address for official correspondence, licence registration and bank account opening, though it is not a physical office lease. Most free zones allow companies to operate this way without a private office, while offshore companies use a registered agent address instead.