Starting a business in the UAE
Mainland or free zone is the whole question - and since 2023 the 9% corporate tax means the zero-tax pitch needs reading glasses.
Checked against the sources on 2026-08-30
Before anything else
Every UAE business exists under a licence: mainland (from an emirate’s Department of Economic Development, trading anywhere in the UAE) or one of forty-plus free zones (cheaper bundles, 100% foreign ownership always, but mainland trade requires arrangements). Freelance permits from the free zones are the light entry - a licence plus visa eligibility for a few thousand dirhams a year.
The tax story needs its 2023 update said plainly: corporate tax at 9% now applies above AED 375,000 of profit, with small business relief (electable, revenue under AED 3 million, running through 2026) taking most small operators back to zero for now. Free zone entities keep 0% only on qualifying income under conditions with real accounting requirements behind them. There is still no personal income tax - salaries and dividends land untaxed - but "the UAE has no tax" is no longer a sentence a founder can plan on.
The legal shell
Freelance permit, free zone company, or mainland LLC?
Freelance permit
Solo professional services.
AED 7,500-20,000/year by zone, visa extra.
Scope limited to the permitted activities; clients occasionally want a "real" company.
Free zone FZE/FZCO
The default startup vehicle - ownership, bundled visas, fast setup.
AED 12,000-30,000/year for licence + flexi-desk packages.
Direct mainland trade needs a distributor or branch; the qualifying-income rules decide whether the 0% actually applies.
Mainland LLC
UAE-market business - retail, services to local companies, government work.
Licence and fees typically AED 15,000-30,000/year; 100% foreign ownership now allowed for most activities.
Office-space requirements are real, and activity lists gate what a licence may do.
The sequence
Pick the jurisdiction against the actual customer base
Selling to the world from a laptop: any reputable free zone. Selling to Dubai companies: mainland, or price the workarounds honestly. The licence cost differences are noise next to getting this wrong.
Licence, then visa, then bank
Takes: Licence in days; the bank account is the slow step
The licence application wants passport, activity choice and the package selection; establishment card and residence visa follow. Corporate bank onboarding runs compliance checks that can take weeks - start it immediately and bring substance (contracts, CV, business plan).
Watch out: The bank account, not the licence, is the gate. Budget weeks and have documents ready.
Register for corporate tax - everyone
Where: EmaraTax, the FTA portal
Registration is required regardless of whether relief takes the bill to zero; deadlines by licence date carry AED 10,000 late penalties. Elect small business relief if eligible; keep the books that prove it.
VAT at AED 375,000
Compulsory registration at AED 375,000 of taxable supplies (voluntary at half that); 5% standard rate, quarterly filings on EmaraTax.
What it costs to start
| What | Amount |
|---|---|
| Freelance permit | AED 7,500-20,000/year |
| Free zone company package | AED 12,000-30,000/year |
| Residence visaPer person, plus medical and Emirates ID. | AED 3,000-6,000 |
| Corporate taxSmall business relief to zero through 2026 if elected. | 9% above AED 375,000 profit |
The words on the forms
- DED
- The emirate economic department issuing mainland licences.
- Free zone
- The forty-plus licensing jurisdictions with bundled packages.
- FZE / FZCO
- Single- and multi-shareholder free zone companies.
- EmaraTax / FTA
- The federal tax authority and its portal.
- Small business relief
- The election taking sub-AED 3M revenue back to 0% through 2026.
- Qualifying income
- What keeps a free zone entity at 0% - conditions attached.
- Establishment card
- The immigration-side company registration behind visas.
The traps
- Missing corporate tax registration because the expected bill is zero - the penalty is not.
- A free zone licence sold for a mainland business model.
- Bank onboarding assumed instant.
- Zone package renewals climbing after a cheap first year - read year two’s price.
Where to check this yourself
- FTA / EmaraTaxCorporate tax and VAT rules.
- Ministry of EconomyThe mainland framework.
This is a map, not legal or tax advice - and an honest one about how it was drawn: the Germany guide was written by a person who walked the route; most other countries were drafted with AI against the official sources and have not yet been walked by someone who did it. Laws change. Every guide carries the date it was last checked and the sources to check it yourself - and if you have been through one of these routes, your corrections are exactly what this handbook wants.