Company formation in the UAE starts with three decisions, not one: what the company is allowed to do, where it is registered, and who can bank it. The trade license decides the first. Mainland, free zone or offshore decides the second. The bank decides the third, and it is the slowest of the three.
LegalBison forms UAE companies for founders and operating businesses. One project team handles the structure recommendation, the license application, the corporate documents, and the tax and residency steps that follow. Formation comes first. Licensing and ongoing compliance are added only if the business model needs them.
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| Item | Position |
|---|---|
| Entity | Mainland limited liability company, free zone company, foreign branch, or offshore company |
| Governing law | Commercial Companies Law, amended by Federal Decree-Law No. 20 of 2025 |
| Licensing authority | Each emirate’s economic department: DET in Dubai, ADDED in Abu Dhabi, SEDD in Sharjah. Free zones license themselves |
| Financial free zones | ADGM and DIFC, with their own registration authorities, courts and regulators |
| Foreign ownership | Full foreign ownership for most activities. A short restricted list still needs an Emirati partner or a local service agent |
| Corporate tax | 9% on taxable income above AED 375,000; 0% below |
| Free zone tax | 0% on qualifying income that meets the Article 18 conditions; 9% otherwise |
| VAT | 5% |
| Tax registration | Within three months of incorporation. Late registration carries an AED 10,000 penalty |
| Residency | Company-sponsored residence visas. The Golden Residency is a separate 10-year route |
| Time to a license | Weeks for the license itself. Around three to four months for a mainland company once attestation and bank onboarding are included |
| Best for | Mainland for UAE customers, staff and government work. Free zones for holding, consulting and export services. Offshore for holding international assets only |
A UAE company is three linked decisions.
The license names what you may do. The license itself is issued at emirate level.
Regulated activities need external approvals before it is issued, and those approval bodies depend on the activity. A file with a regulated activity moves at the speed of the regulator, not the registry.
A mainland limited liability company, a free zone company, a foreign branch, and an offshore company are different instruments. They carry different rights, different reporting, and different banking outcomes.
Federal law has allowed full foreign ownership of mainland companies since 2 January 2022. A list of activities with a strategic impact still requires an Emirati partner, and it is short: security, defense and military activity; banks, exchange houses, finance companies and insurance; currency printing; telecommunications; Hajj and Umra services; Quran centers; and fisheries. Each emirate’s activity list determines whether yours falls inside it.
A trade license is not a bank account. Banks underwrite the business separately: activity, ownership, expected flows, counterparties, and substance.
Banking is usually the longest part of company formation in the UAE, and it is the part a registration agent cannot deliver.
The license names what you may do. The license itself is issued at emirate level.
Regulated activities need external approvals before it is issued, and those approval bodies depend on the activity. A file with a regulated activity moves at the speed of the regulator, not the registry.
A mainland limited liability company, a free zone company, a foreign branch, and an offshore company are different instruments. They carry different rights, different reporting, and different banking outcomes.
Federal law has allowed full foreign ownership of mainland companies since 2 January 2022. A list of activities with a strategic impact still requires an Emirati partner, and it is short: security, defense and military activity; banks, exchange houses, finance companies and insurance; currency printing; telecommunications; Hajj and Umra services; Quran centers; and fisheries. Each emirate’s activity list determines whether yours falls inside it.
A trade license is not a bank account. Banks underwrite the business separately: activity, ownership, expected flows, counterparties, and substance.
Banking is usually the longest part of company formation in the UAE, and it is the part a registration agent cannot deliver.
| Structure | Mainland company | Free zone company | Offshore company |
|---|---|---|---|
| Trading in the UAE | Yes, including government and onshore clients | Inside the zone and internationally. Onshore activity needs a mainland branch, a distributor, or a mainland operating permit where the emirate allows one | No. It cannot trade in the UAE |
| Ownership | Full foreign ownership for most activities; the restricted list needs an Emirati partner or service agent | Full foreign ownership | Full foreign ownership |
| Corporate tax | 9% above AED 375,000; 0% below | 0% on qualifying income that meets Article 18 conditions; 9% otherwise | Depends on where the company is managed and controlled, plus economic substance rules |
| Residence visas | Quota tied to office and activity | Quota tied to the package and facility | Generally none |
| Best fit | Selling to UAE customers, hiring locally, government work | Holding, consulting, export services, activities the zone specializes in | Holding international assets, not operating |
Company registration in UAE is not handled by a federal body. Mainland licenses are issued by each emirate’s economic department. Dubai’s is the Department of Economy and Tourism (DET). Abu Dhabi’s is the Abu Dhabi Department of Economic Development (ADDED), which takes applications through TAMM, the emirate’s government services platform. Sharjah’s is the Sharjah Economic Development Department (SEDD). The license category decides what you may invoice for, and some categories need external approvals before the license is issued.
Federal company law is the same in all three, outside the financial free zones. What differs is the activity list each department maintains, the fee scale, the premises requirement, and how quickly files move.
Company formation in Abu Dhabi runs through ADDED. The activity list, the license types, and the route from a free zone to mainland work all differ from Dubai, and the difference matters most when the revenue will come from government entities, from industry, or from a sector zone.
ADDED issues the economic license and publishes the requirements for each category. Its own guidance states that most business activities carry no minimum capital requirement. It also issues license types Dubai does not: a Standard license for ordinary commercial activity, a Dual License that lets a free zone company trade outside its zone, a Freelancer license for activities that need no premises, a Virtual license for owners based outside the country, and a Trader license for UAE citizens and residents.
The Dual License is the mechanism worth knowing. A company registered in an Abu Dhabi economic free zone applies for it to do business outside the zone, keeps its free zone terms, and becomes eligible for work that requires a mainland license, including government tenders. It is granted to a free zone branch, requires a declaration, the free zone license and a no-objection certificate, and charges a base fee that covers a set number of activities with each additional activity priced separately.
Abu Dhabi also hosts ADGM, a financial free zone with its own registration authority, its own English common law framework and its own courts. ADGM is not a mainland company with a different address, and financial activity there needs its own authorization. The emirate’s non-financial zones are organized around logistics, media and clean technology rather than around general trading.
Company formation in Dubai splits the same way: DET licenses the mainland, and more than 20 free zones license themselves, each with its own authority and its own rulebook. On the mainland, the activity category sets the approvals and the premises requirement, so the category matters more than the fee.
Inside the zones the legal form follows the zone: a Free Zone Establishment with one shareholder, a Free Zone Company with at least two, or a branch of an existing company. That is why the zone decision is an activity decision first.
Dubai Executive Council Decision No. 11/2025, in effect since March 2025, lets eligible free zone entities operate in mainland Dubai under a DET license, through a Dubai Unified License and a Free Zone Mainland Operating Permit applied for on Invest in Dubai. The 2025 amendment to the Commercial Companies Law confirms the other direction: a free zone company can operate outside its zone through a mainland branch or representative office. Abu Dhabi runs its own version through the Dual License.
The practical effect is that the question has changed. It is no longer “mainland or free zone” as a permanent identity. It is which license perimeter you need first, knowing a second permit can be added later without forming a new company. That matters for founders who start with a cheap zone package and expect to sell onshore within a year.
What decides the emirate is where the revenue comes from. Consumer, trade, media and professional services work sits naturally in Dubai, whose free zones are the deepest pool for consulting and holding structures. Government, industry and energy work sits naturally in Abu Dhabi, where the Dual License lets a free zone company sell into the mainland on its zone terms. That is a judgment about customers, not about fees.
Company formation in Abu Dhabi runs through ADDED. The activity list, the license types, and the route from a free zone to mainland work all differ from Dubai, and the difference matters most when the revenue will come from government entities, from industry, or from a sector zone.
ADDED issues the economic license and publishes the requirements for each category. Its own guidance states that most business activities carry no minimum capital requirement. It also issues license types Dubai does not: a Standard license for ordinary commercial activity, a Dual License that lets a free zone company trade outside its zone, a Freelancer license for activities that need no premises, a Virtual license for owners based outside the country, and a Trader license for UAE citizens and residents.
The Dual License is the mechanism worth knowing. A company registered in an Abu Dhabi economic free zone applies for it to do business outside the zone, keeps its free zone terms, and becomes eligible for work that requires a mainland license, including government tenders. It is granted to a free zone branch, requires a declaration, the free zone license and a no-objection certificate, and charges a base fee that covers a set number of activities with each additional activity priced separately.
Abu Dhabi also hosts ADGM, a financial free zone with its own registration authority, its own English common law framework and its own courts. ADGM is not a mainland company with a different address, and financial activity there needs its own authorization. The emirate’s non-financial zones are organized around logistics, media and clean technology rather than around general trading.
Company formation in Dubai splits the same way: DET licenses the mainland, and more than 20 free zones license themselves, each with its own authority and its own rulebook. On the mainland, the activity category sets the approvals and the premises requirement, so the category matters more than the fee.
Inside the zones the legal form follows the zone: a Free Zone Establishment with one shareholder, a Free Zone Company with at least two, or a branch of an existing company. That is why the zone decision is an activity decision first.
Dubai Executive Council Decision No. 11/2025, in effect since March 2025, lets eligible free zone entities operate in mainland Dubai under a DET license, through a Dubai Unified License and a Free Zone Mainland Operating Permit applied for on Invest in Dubai. The 2025 amendment to the Commercial Companies Law confirms the other direction: a free zone company can operate outside its zone through a mainland branch or representative office. Abu Dhabi runs its own version through the Dual License.
The practical effect is that the question has changed. It is no longer “mainland or free zone” as a permanent identity. It is which license perimeter you need first, knowing a second permit can be added later without forming a new company. That matters for founders who start with a cheap zone package and expect to sell onshore within a year.
What decides the emirate is where the revenue comes from. Consumer, trade, media and professional services work sits naturally in Dubai, whose free zones are the deepest pool for consulting and holding structures. Government, industry and energy work sits naturally in Abu Dhabi, where the Dual License lets a free zone company sell into the mainland on its zone terms. That is a judgment about customers, not about fees.
Company formation pricing in the UAE depends on four things: the structure, the activity, the office or desk requirement, and how much administration you want us to run. The first consultation is free, and everything after it is quoted from your file rather than from a fixed package.
| Service | What the quote covers |
|---|---|
| First consultation | No charge. Activity, structure and licensing question, in one call |
| Structure and jurisdiction review | The recommendation in writing, before any application is filed |
| Formation, mainland or free zone | Name reservation, initial approval, documents and license |
| Bank account introduction | Bank selection, file preparation and the introduction |
| Visas and residency | Quota, medical, Emirates ID and the application |
| Administration and filings | Corporate tax, VAT, e-invoicing readiness and renewals |
These changes are recent enough that many guides predate them. They matter because they alter the structure decision, not just the paperwork.
Federal Decree-Law No. 20 of 2025 amended the Commercial Companies Law. Limited liability companies can now issue different classes of shares. Drag-along, tag-along, and succession terms can sit in the memorandum or articles instead of only in a side agreement.
Free zone entities operating onshore are brought into scope, and companies can move their registration between emirates, or between a free zone and the mainland, without dissolving. The amendment also confirms that companies incorporated in the UAE hold UAE nationality. The Ministry of Economy publishes the legislation.
Multinational groups with consolidated revenue of EUR 750 million or more pay top-up tax so that their UAE profits carry a minimum effective rate of 15%, under Cabinet Decision No. 142 of 2024. The threshold tests at least two of the previous four years.
It does not touch a founder-owned company. It does change holding structures for larger groups, which is why the question “where should the parent sit” now has a different answer than it did in 2021.
Under Ministerial Decision No. 244 of 2025, the pilot and voluntary phase began on 1 July 2026. Businesses with revenue of AED 50 million or more had to appoint an accredited service provider by 31 July 2026 and must go live by 1 January 2027.
Businesses below that threshold appoint by 31 March 2027 and go live by 1 July 2027. Government entities follow by 1 October 2027. Business-to-consumer transactions are out of scope until a further decision. Dates are as scheduled in October 2026.
The UAE is committed to the OECD Crypto-Asset Reporting Framework with first exchanges by 2028, according to the Global Forum commitment list.
Crypto businesses should assume their customer data will be exchanged with partner jurisdictions on that timetable.
Federal Decree-Law No. 20 of 2025 amended the Commercial Companies Law. Limited liability companies can now issue different classes of shares. Drag-along, tag-along, and succession terms can sit in the memorandum or articles instead of only in a side agreement.
Free zone entities operating onshore are brought into scope, and companies can move their registration between emirates, or between a free zone and the mainland, without dissolving. The amendment also confirms that companies incorporated in the UAE hold UAE nationality. The Ministry of Economy publishes the legislation.
Multinational groups with consolidated revenue of EUR 750 million or more pay top-up tax so that their UAE profits carry a minimum effective rate of 15%, under Cabinet Decision No. 142 of 2024. The threshold tests at least two of the previous four years.
It does not touch a founder-owned company. It does change holding structures for larger groups, which is why the question “where should the parent sit” now has a different answer than it did in 2021.
Under Ministerial Decision No. 244 of 2025, the pilot and voluntary phase began on 1 July 2026. Businesses with revenue of AED 50 million or more had to appoint an accredited service provider by 31 July 2026 and must go live by 1 January 2027.
Businesses below that threshold appoint by 31 March 2027 and go live by 1 July 2027. Government entities follow by 1 October 2027. Business-to-consumer transactions are out of scope until a further decision. Dates are as scheduled in October 2026.
The UAE is committed to the OECD Crypto-Asset Reporting Framework with first exchanges by 2028, according to the Global Forum commitment list.
Crypto businesses should assume their customer data will be exchanged with partner jurisdictions on that timetable.
| Step | What happens | What sets the pace |
|---|---|---|
| Pick the license category that covers what you will actually invoice for. Under-declaring it is the most common cause of a later bank rejection | Activity classification and any external approvals |
| Mainland, free zone, or a branch, based on where the revenue comes from | Your revenue model |
| Naming rules restrict religious references, abbreviations, and names tied to regulated activities | Registry |
| The authority checks activity, ownership, and documents before the license application | Authority |
| Passports, photographs, proof of address, and constitutional documents for corporate shareholders. Remote applicants need an attested power of attorney | Notarization and attestation, usually the real delay |
| The UAE requires beneficial ownership information, and banks repeat the exercise in their own format | Document quality |
| Memorandum, certificate of formation, and license are issued together for most structures | Registry |
| Corporate tax registration is mandatory. VAT applies above the threshold, customs if you import | FTA processing |
| Both depend on the license and the file, and both run on the bank’s and immigration authority’s timelines | Bank onboarding |
Corporate tax. 9% on taxable income above AED 375,000, and 0% below. The rate applies to companies, not to salaries, and the UAE does not levy personal income tax.
Registration is a separate obligation with its own clock, and it is the cheapest deadline in the country to miss. A company incorporated on or after 1 March 2024 must submit its corporate tax registration application within three months of incorporation, establishment or recognition. Late registration carries an administrative penalty of AED 10,000, per the FTA registration guidance. A UAE branch of a domestic company is an extension of its parent, so it does not register or file separately.
Free zones. Qualifying income earned by a qualifying free zone person is taxed at 0%. The conditions are specific: qualifying activities, adequate substance in the zone, and compliance with the de minimis and transfer pricing rules. Income that does not qualify is taxed at 9%.
VAT. 5% on most goods and services. Registration is mandatory above AED 375,000 of taxable turnover and optional above AED 187,500.
Filings. A corporate tax return and any tax due are filed within nine months of the end of the tax period through EmaraTax, per the FTA returns guidance.
Top-up tax. Applies to large multinational groups only, as described above. A founder-owned company below the revenue threshold is not affected.
A UAE bank account is a separate application with a separate decision, and it is the part of company formation in UAE that founders underestimate most often. Banks look at the activity, the ownership chain, the expected transaction profile, and the substance behind the company. A free zone license and a mainland license are both bankable. A shell with no activity and no plan is not, regardless of the license. Our business bank account guide covers what different banks look for.
Residency follows the company. A shareholder or employee can be sponsored by the company for a residence visa, which requires a medical check and an Emirates ID. Investors who do not want to depend on the company can apply for the Golden Residency, a 10-year renewable status. The investor routes include AED 2 million in property, a deposit, or company capital, according to the Federal Authority for Identity, Citizenship, Customs and Port Security.
Remote formation is possible. It requires a power of attorney, notarized in the applicant’s jurisdiction and attested for use in the UAE. Some authorities still ask for originals at a later stage, so the document plan matters as much as the application.
| Obligation | When |
|---|---|
| Corporate tax registration | Within three months of incorporation. Late registration carries a penalty of AED 10,000 |
| Corporate tax return and payment | Within 9 months of the end of the tax period |
| VAT returns | Monthly or quarterly, if registered |
| E-invoicing | 1 January 2027 for revenue of AED 50 million or more; 1 July 2027 below that |
| Beneficial ownership register | Maintained and updated when ownership changes |
| Economic substance notification | Where the activity is in scope |
| Trade license renewal | Annual |
| Residence visa renewal | Per visa term |
Formation answers who you are and where you sit. It does not answer whether you may serve a particular market.
Crypto activity is the clearest example. A Dubai virtual asset service provider needs a VARA license, and activities based in ADGM or DIFC are supervised by those authorities instead. The company is the prerequisite, not the permission. The same logic applies to payments, lending, insurance, and gambling.
If your model touches a regulated activity, read the licensing route first. The trade license category affects the application, so the order matters: crypto licenses in the UAE, Dubai VARA, ADGM, and DMCC.
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A perfect fit for our business. I highly recommend Legal Bison to any entrepreneur or business seeking top-notch services for their company formation. Their commitment to excellence and customer satisfaction is truly commendable.
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If the UAE is not the right base, these are the formation jurisdictions founders compare it against most often.
EstoniaOn request
CyprusOn request
SingaporeOn request
Hong KongOn request
British Virgin IslandsOn request
PanamaOn request
No offers are listed for this selection.
The right path forward, regardless of project stage
Information on this page is general and may change as regulations change. It isn’t legal, tax, or investment advice. Contact us for advice on your situation. Read our full disclaimer.
Choosing the structure is the cheapest decision to get right and the most expensive to unwind, especially once a bank and a regulator are involved. Book a free consultation and we will map the activity, the license category, and the licensing question in one conversation.
If the UAE is not the right base, the company formation overview covers Estonia, Cyprus, Singapore, Hong Kong and Panama, and the offshore overview covers pure holding vehicles. For groups that need ongoing officer and reporting support, fractional compliance runs the calendar after incorporation.
Information on this page is general and may change as regulations change. It isn’t legal, tax, or investment advice. Contact us for advice on your situation. Read our full disclaimer.
Our team of experts will be glad to provide you with answers and a one-stop-shop solution to all your legal corporate needs.
