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Company formation in the UAE is a licensing decision before it is a registration, because the country has no single companies registry. A mainland company is licensed by the economic department of its emirate, the Department of Economy and Tourism (DET) in Dubai or the Department of Economic Development in Abu Dhabi. A free zone company is licensed by the authority of its zone, such as DMCC, JAFZA, IFZA or RAKEZ, which keeps its register. An offshore company is registered with the JAFZA or RAK ICC registrar through a registered agent. The licence names the activities the company may carry on, and the activity decides which authority can issue it. UAE company formation, company registration in the UAE and business setup all mean one sequence: activity, authority and legal form, licence, then tax and beneficial owner filings.
The Commercial Companies Law, Federal Decree-Law No. 32 of 2021, governs mainland companies and, under its Article 5, does not apply in a free zone whose regulations say so. DIFC and ADGM, the financial free zones, run separate regimes not covered here.
| Question | Mainland LLC | Free zone FZE or FZCO | Offshore company |
|---|---|---|---|
| Who licenses or registers it | The emirate’s economic department, DET in Dubai | The free zone authority | The JAFZA Offshore or RAK ICC registrar, through a registered agent |
| Who may own it | 2 to 50 partners, or one natural or legal person; full foreign ownership except restricted activities | FZE: one shareholder, an individual or a company; FZCO at JAFZA: 2 to 50; no foreign ownership restriction | One or more shareholders, individuals or companies |
| Share capital | No fixed minimum; sufficient for the object and paid in full at incorporation | Set by each zone; JAFZA prescribes no minimum | Shares fully paid when allotted (JAFZA Offshore) |
| Where it may do business | Anywhere in the UAE and abroad | In and from the zone and abroad; mainland sales need approvals, a distributor or a mainland branch | Abroad; in the UAE only after obtaining the appropriate licences |
| Premises | Office or warehouse lease, registered with Ejari in Dubai | Space leased from the zone: flexi-desk, office or warehouse | A registered agent at all times |
| Residence visas | Through the establishment card and a GDRFA company file | Through the establishment card, within the quota of the licence or office | Only for members of a JAFZA offshore company owning freehold property, subject to eligibility |
The choice usually turns on where the customers are. A free zone licence does not by itself allow business on the mainland: u.ae states that direct sales there are generally not permitted without approvals, so a free zone company sells to the mainland through a licensed distributor or a mainland branch or company, and in Dubai eligible free zone companies may apply to DET for a permit for certain approved activities. Customers abroad or in other free zones point to a free zone; UAE consumers or government contracts point to the mainland. Zones are compared on our page on free zone company formation in the UAE.
Since Federal Decree-Law No. 26 of 2020 a foreigner can own all of a mainland company, except in activities of strategic impact that u.ae lists, among them security and defence, banking, exchange, financing and insurance, telecommunications and commercial agencies. u.ae’s mainland checklist still asks for a local service agent, a UAE national who holds no shares, appointed by an agreement attested by a notary or court, for civil (professional) establishments wholly owned by non-GCC nationals. A free zone has no foreign ownership restriction.
Officers are set by each authority: a DMCC company, for example, needs a manager who is a natural person, at least one director and a secretary. One rule applies across the mainland and the commercial free zones: under Article 11 of Cabinet Decision No. 109 of 2023 each company names to its registrar a natural person residing in the UAE who is authorised to disclose its beneficial owner data.
| Step | What happens |
|---|---|
| 1. Activity | Chosen from more than 2,000; it decides the licence type and the legal forms that fit |
| 2. Legal form and trade name | Typically an LLC; the name must be unregistered, suit the activity and end with the legal form |
| 3. Initial approval | Confirms the government has no objection, without allowing trade; foreign investors need the approval of the General Directorate of Residency and Foreigners’ Affairs |
| 4. Memorandum of association | Prepared and attested by a UAE law firm, court or notary; in Arabic and authenticated in person or by electronic signature (Article 14) |
| 5. Location | An office or warehouse lease, since every business must have a physical address; registered with Ejari in Dubai |
| 6. Sector approvals | From the Central Bank, the Securities and Commodities Authority, the TDRA or another regulator where the activity needs one |
| 7. Licence | Issued once the attested memorandum, the attested lease and any approvals are filed |
The law sets no fixed capital for a mainland LLC: Article 76 asks for capital sufficient for the company’s object, paid in full at incorporation, with cash deposited at a bank operating in the UAE, and lets the Cabinet set a minimum. Articles 71 and 72 allow two to fifty partners or a single owner. To employ staff, the company obtains an establishment card linked to its licence from the Ministry of Human Resources and Emiratisation and opens a company file with the GDRFA, through which work permits and residence visas follow.
A free zone company is formed with the zone’s authority, almost always online. RAKEZ describes the sequence: select the zone and the activity, choose FZE, FZC or branch, prepare passport copies of shareholders and managers with proof of address and a bank reference, submit to the authority, secure a flexi-desk, private office or warehouse, and apply for visas. JAFZA says its process is fully digital, needs a lease agreement at set-up and prescribes no minimum share capital for an FZE or FZCO; its own estimate is 3 to 14 business days from the time all required documents are submitted.
The premises decide the visas. DMCC allows up to 3 visas on a flexi desk, 4 or 5 on a serviced office and 1 for every 9 square metres of physical space; IFZA ties the number to the licence category. Before any visa the company registers for an establishment card, which IFZA describes as the card issued through the Emirate of Dubai that lets a business obtain visas, utility services and bank accounts, renewed every year. If the licence lapses, visas issued under it may be cancelled.
An offshore company is registered rather than licensed for local business, and only a registered agent can form and administer it. JAFZA’s Offshore Companies Regulations 2023 let it hold a UAE bank account, own property in a designated freehold area and own a stake in a UAE operating company; to carry on business activities it must obtain the appropriate licences. RAK ICC’s regulations likewise bar activity in the UAE outside the zone without the competent authorities’ licences. It suits holding shares, freehold property or invoicing abroad, not staff or premises. More on the offshore company in the UAE.
| Obligation | Rule | Legal basis |
|---|---|---|
| Corporate tax registration | Within three months of incorporation, through EmaraTax; free zone and offshore companies included | FTA Decision No. 3 of 2024 |
| Corporate tax rate | 0% on taxable income up to the AED 375,000 threshold, 9% above it | Cabinet Decision No. 116 of 2022 |
| Qualifying Free Zone Person | 0% on qualifying income and 9% on other income; failing a condition loses the status for that period and the next four | Corporate Tax Law, Article 3(2); FTA guidance |
| Audited accounts | Every Qualifying Free Zone Person, and any company with revenue above AED 50 million | Ministerial Decision No. 84 of 2025 |
| Corporate tax return | Within 9 months of the end of each tax period | Ministry of Finance |
| VAT | 5%; compulsory once taxable supplies and imports pass the AED 375,000 threshold over 12 months or will within 30 days; voluntary above the AED 187,500 threshold | Ministry of Finance; FTA |
| Beneficial owner records | Created within 60 days and filed with the register of partners or shareholders; changes filed within 15 days | Cabinet Decision No. 109 of 2023 |
The 0% rate is never automatic in a free zone. It belongs to a Qualifying Free Zone Person meeting the conditions of the Corporate Tax Law, Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 229 of 2025, and only on qualifying income, such as income from qualifying activities or from other free zone persons. Every free zone company registers and files whatever its rate. Economic substance reports are not due for financial years ending after 31 December 2022 (Cabinet Decision No. 98 of 2024). The Ministry of Finance reports 137 double taxation agreements concluded.
The licence comes first: at least one large UAE bank will not start an application before the trade licence is issued. Several banks’ digital routes expect a signatory resident in the UAE with an Emirates ID, which follows the licence and residence visa, and one large bank’s online route takes only companies owned by individuals, sending holding structures to a separate application. Details are on our page on bank accounts for UAE companies.
Buying an off-the-shelf company in the UAE saves little time, since a free zone share transfer is itself an authority process with the same KYC. What a shelf company in the UAE offers is what a new one lacks on its first day: an earlier date of incorporation, a licence and establishment card already issued, a lease in place and, for some free zone companies, a bank account the bank agrees to keep. If that matters, see ready-made shelf companies in the UAE; if not, a new company gives you the zone, activities and shareholding you choose.
Our part: we can supply a ready-made UAE company or form a new one, prepare the formation or transfer documents and the filings with the licensing authority, and help prepare the bank application. Where we have a working contact at a suitable bank we can make an introduction, and the bank alone decides. The country overview is on our UAE page, the subject is covered in Russian, and shelf companies in general are explained on off-the-shelf companies.
Choose the activity first, then the authority. For a free zone company you apply online to the authority with passport copies, proof of address and a name, lease a flexi-desk or office and receive the licence. For a mainland LLC the emirate’s economic department gives initial approval, which for foreign investors includes residency clearance, and issues the licence once the authenticated memorandum and an attested lease are filed.
An FZE, or Free Zone Establishment, is a limited liability company with a single shareholder registered in a free zone; JAFZA describes it as essentially an LLC within the free zone. The shareholder can be an individual or a company. With two or more shareholders it is an FZCO, called FZC at RAKEZ. Both follow their zone’s own regulations rather than the mainland Commercial Companies Law.
Not in a free zone, and not for most mainland activities since Federal Decree-Law No. 26 of 2020 allowed full foreign ownership. Activities of strategic impact, such as banking, insurance, telecommunications and defence, keep restrictions. u.ae still lists a UAE national local service agent, who holds no shares, for civil establishments wholly owned by non-GCC nationals.
Not on its free zone licence alone. Direct sales on the mainland are generally not permitted without approvals, so a free zone company sells there through a licensed mainland distributor or a mainland branch or company. In Dubai, eligible free zone companies may apply to the Department of Economy and Tourism for a permit for certain approved mainland activities.
Corporate tax registration is due within three months of incorporation for every company formed since 1 March 2024, free zone and offshore companies included, whatever its income. VAT registration becomes compulsory once taxable supplies and imports exceed the AED 375,000 threshold over the past 12 months, or are expected to within the next 30 days, and the application goes to the FTA through EmaraTax within 30 days.
Yes, some premises. u.ae states that every business must have a physical address, and a mainland company needs an office or warehouse lease, registered with Ejari in Dubai. Free zones lease space themselves, from a flexi-desk to an office or warehouse, and JAFZA requires the lease at set-up. In a free zone they also set the visa quota.
Not sure whether your activity fits a free zone or the mainland? Tell us what the company will do and we will set out which licensing authority, legal form and documents a UAE formation would need. We also answer on Telegram and WhatsApp at +48 663 247 166.