REGISTRATION OF BUSINESS IN THE UNITED ARAB EMIRATES

The United Arab Emirates (UAE) is a leading regional and international business hub in the Middle East. Comprising seven emirates, including Dubai and Abu Dhabi, the UAE offers a modern infrastructure, political stability, and a business-friendly regulatory framework.

The UAE operates a specific law system influenced by Islamic law principles, with certain financial free zones (notably the Dubai International Financial Centre and Abu Dhabi Global Market) applying common law frameworks and independent courts.

The country has positioned itself as a global centre for holding, trading, logistics, financial services, technology, and regional headquarters structures. The introduction of federal corporate taxation in 2023 has aligned the UAE with common practices while preserving its competitiveness.

The UAE complies with OECD transparency standards, participates in international exchange of information, and is not included on the EU list of non-cooperative jurisdictions for tax purposes.

Benefits of doing business in the UAE

1. Strategic geographic location
   Gateway between Europe, Asia, and Africa with world-class ports and airports.
2. Competitive corporate tax regime
   A federal corporate income tax (CIT) regime applies at a standard rate of 9%, which remains highly competitive globally (with options for lowering the standard rate to 0% in some free zones subject to compliance with the specific requirements).
3. Extensive double tax treaty network
   The UAE has concluded more than 100 double taxation treaties, facilitating tax-efficient cross-border structures.
4. Free zones with 100% foreign ownership
   More than 40 free zones allow full foreign ownership, simplified customs procedures, and potential tax incentives.
5. No personal income tax
   The UAE does not levy personal income tax on employment or investment income.
6. ) Advanced infrastructure & ease of doing business
   Digitised incorporation procedures and efficient licensing systems in many emirates.
7. Transparency compliance
   The UAE has implemented transfer pricing documentation requirements including Country-by-Country Reporting (CbCR).
8. Stable and reputable jurisdiction
   Member of the OECD Inclusive Framework on BEPS and compliant with international AML/CFT standards.

Requirements for business registration in the UAE

The most common structures are:

         -   Limited Liability Company (LLC) (mainland).
         -   Free Zone Company (FZ-LLC or similar).
         -   Branch of a foreign company.

1. Company Name Requirements
   The company name must be approved by the relevant authority (Department of Economic Development for mainland companies or the relevant Free Zone Authority). It must not violate public order or contain restricted words without approval.
2. Shareholder & Ownership Requirements
   Mainland LLCs may now generally be 100% foreign-owned (subject to certain strategic activities).
   Free zone entities typically allow 100% foreign ownership.
   At least one shareholder is required (individual or corporate).
3. Director & Manager Requirements
   At least one director/manager must be appointed. There are no general nationality requirements. Residency visa requirements depend on the business activity and structure.
4. Registered Office
   A physical registered office in the UAE is required (virtual offices may be permitted in certain free zones depending on licence type).
5. Compliance & Reporting
   UAE companies must comply with:
   Maintenance of proper accounting records (generally for 7 years);
   Preparation of financial statements (audit requirements depend on jurisdiction and licence);
   Corporate tax registration (if within scope);
   VAT registration (if taxable supplies exceed the threshold).
   Transfer pricing documentation is required for businesses meeting the applicable thresholds under the Corporate Tax Law.
6. Beneficial Ownership Register
   The UAE maintains the Ultimate Beneficial Owner (UBO) register in line with AML regulations. Information is filed with the licensing authority and is not publicly accessible.
7. Licensing Requirements
   Specific licences are required for regulated activities such as:
   Financial services (regulated by the Central Bank of the UAE or financial free zone regulators),
   Insurance,
   Investment management,
   Crypto-asset activities (in certain emirates),
   Education and healthcare.

Taxation in the UAE

The UAE applies a federal corporate tax regime introduced under Federal Decree-Law No. 47 of 2022 (as amended).

1. Corporate Income Tax (CIT)
   0% on taxable income up to AED 375,000.
   9% on taxable income exceeding AED 375,000.
   A 15% Domestic Minimum Top-up Tax (DMTT) applies to large multinational groups meeting the OECD Pillar Two threshold (generally consolidated revenue ≥ EUR 750 million ), effective for financial years starting on or after 1 January 2025.
   Free Zone entities may benefit from a 0% rate on qualifying income if they meet the conditions to be treated as a Qualifying Free Zone Person (QFZP), including substance and income segregation requirements.
2. Tax Residence
   A juridical person incorporated in the UAE is generally considered UAE tax resident. Foreign entities may also be treated as tax resident if effectively managed and controlled in the UAE.
   Resident entities are taxed on worldwide income; non-residents are taxed on UAE-sourced income or income attributable to a permanent establishment in the UAE.
3. Participation Exemption
   Dividends and capital gains from qualifying shareholdings may be exempt, subject to ownership, holding period, and subject-to-tax conditions.
4. Withholding Tax
   The UAE corporate tax law provides for a 0% withholding tax on domestic and cross-border payments of dividends, interest, and royalties (subject to specific anti-abuse and transfer pricing rules).
5. VAT
   The UAE levies VAT at 5% on taxable supplies, subject to exemptions and zero-rating provisions.
6. Transfer Pricing
   The UAE has implemented OECD-aligned transfer pricing rules, including:
   Arm’s length principle;
   Master File and Local File requirements (subject to thresholds);
   Related-party disclosure requirements;
   CbCR for qualifying multinational groups.

International transparency and compliance

The UAE:

• Participates in the exchange of information under Common Reporting Standard (CRS);
• Applies Country-by-Country Reporting (CbCR);
• Is a member of the OECD Inclusive Framework on BEPS;
• Applies AML/CFT regulations consistent with FATF standards;
• Is not listed on the EU list of non-cooperative jurisdictions for tax purposes.