🇦🇪 UAE Company Formation
0% Free Zone or 9% Mainland corporate tax with 0% personal income tax. 137 tax treaties and full foreign ownership across 40+ specialized zones.
Updated April 2026
Free Zone CIT
0%
Mainland CIT
9%
Personal Tax
0%
Tax Treaties
137
Ownership
100% foreign
Tax System
Rates and incentives
| Tax | Rate | Note |
|---|---|---|
| Corporate income tax (Mainland) | 9% | On taxable income above AED 375,000. First AED 375k exempt. |
| Free Zone qualifying income | 0% | Only for Qualifying Free Zone Persons on qualifying income from qualifying activities. |
| Withholding tax — all categories | 0% | No WHT on dividends, interest, or royalties regardless of treaty. |
| Personal income tax | 0% | No personal income tax for UAE residents. |
| VAT | 5% | Standard rate. Certain goods and services zero-rated or exempt. |
| Capital gains (participation) | 0% | Participation exemption for 5%+ qualifying shareholdings held 12+ months. |
Why UAE
Key advantages
0% personal income tax
No PIT for UAE residents — one of the world's few jurisdictions with zero personal tax on employment, dividends, and capital gains.
40+ Free Zones with 0% qualifying income
Specialized zones for every industry. QFZP rate of 0% applies to qualifying activities with qualifying counterparties — eligibility must be verified.
ADGM common law asset protection
Abu Dhabi Global Market operates under English common law. Foundations and SPVs offer full beneficiary confidentiality and creditor protection.
137 double tax treaties
One of the world's most extensive DTA networks covering India, UK, China, Germany, Singapore, and most major trading partners.
Golden Visa — 10-year renewable residency
Available to investors, entrepreneurs, and skilled professionals. No minimum physical presence required. Renewable indefinitely.
What We Build
Full scope of implementation
- ✓Mainland or Free Zone company registration — zone matched to your business model
- ✓ADGM Foundation or SPV setup for asset protection
- ✓Corporate bank account — full KYC file and compliance dossier preparation
- ✓UAE residency visa coordination for founders and team members
- ✓Economic substance advisory — flexi-desk vs dedicated office
- ✓Annual corporate tax registration, VAT filing, and ESR compliance
- ✓Transfer pricing documentation for related-party transactions
Who This Is For
Ideal client profiles
2025 – 2026
What has changed
Pillar Two DMTT — effective from January 2025
Domestic Minimum Top-up Tax applies to MNE groups with consolidated revenue above EUR 750M. Most mid-market structures are unaffected.
⚠ Free Zone 0% rate — QFZP substance strictly enforced
FTA actively auditing qualifying income and substance tests since 2024. E-commerce B2C sales to end consumers often do not qualify for 0% QFZP rate.
Corporate Tax — all entities must register with FTA
Even 0%-rate free zone entities must register for Corporate Tax and file annual returns. Penalties apply for late registration and filing.
Common Questions
FAQ
Does the 0% Free Zone rate apply to e-commerce businesses?
Usually not. The 0% QFZP rate requires qualifying activities with qualifying counterparties — generally other free zone or international entities. Retail sales to end consumers typically fail this test. Standard 9% CIT applies to non-qualifying income. Verify QFZP eligibility with a UAE-licensed tax advisor before relying on the 0% rate.
What is the difference between Mainland and Free Zone?
Mainland companies can trade anywhere in the UAE and take government contracts. Free Zone companies operate within a specific zone, benefit from potential 0% qualifying income, and allow 100% foreign ownership. Since 2021, Mainland also permits 100% foreign ownership for most activities.
Is a physical visit required to open a bank account?
Yes — all major UAE banks require an in-person visit. There is no remote corporate account opening at traditional banks. Digital banks offer faster onboarding for free zone companies but have limited functionality compared to traditional banking.
What substance is required for a UAE holding company?
Economic Substance Regulations require UAE entities conducting relevant activities to demonstrate adequate substance — employees, expenditure, and decision-making in the UAE. A basic holding company with a registered office, local board minutes, and UAE-managed decisions meets the standard.