Setting up a company in Dubai: free zone or mainland, tax and residence

Dubai is the most searched destination in the Gulf for founders. It is also the one with the most outdated ideas in circulation. Here are the current rules.

Free zone or mainland: the first decision

In the UAE a company is set up either on the mainland or in one of the country's free zones, of which there are more than forty.

• Mainland. The company can work anywhere in the UAE. Since 1 June 2021 it can be 100% foreign-owned for most activities. A few strategic sectors remain apart, such as banking, insurance, telecoms and defence.
• Free zone. The company is 100% foreign-owned and works inside its zone and internationally. To sell on the local market you need a distributor, a branch or a specific permit. Goods entering the mainland pay customs duty, generally 5%.

The question to ask is simple: are your clients in the UAE, or elsewhere?

Tax: 9%, not zero

• Corporate tax: 0% up to AED 375,000 of taxable profit, 9% above.
• Free zones: the 0% rate applies only to the qualifying income of a company that meets several conditions (real substance in the zone and audited accounts, among others). The rest is taxed at 9%.
• VAT: 5%. Registration is mandatory above AED 375,000 of taxable turnover.
• No personal income tax.
• Very large multinational groups have paid a 15% minimum tax since 2025.

The residence visa

The owner obtains a residence permit through the company. There is also a long-term visa, the ten-year Golden Visa, available among other routes from AED 2 million invested in property or in a company.

What French residents must know before leaving

This is where the expensive mistakes are made. France and the UAE have a tax treaty signed on 19 July 1989. But holding a UAE visa, or even a UAE tax residence certificate, is not enough to stop being a French tax resident.

You remain a French tax resident as soon as one of these is true: your home or main place of stay is in France, your main professional activity is there, or the centre of your economic interests is there. And a foreign company that is in practice managed from France can be taxed there. Depending on your assets, leaving can also trigger the French exit tax.

The common-sense rule: a company in Dubai is justified by real activity in Dubai. Have your personal position confirmed by a tax adviser before you commit.

The bank account

This is often the longest step. Banks ask for the licence, the articles, passports, a clear business plan and the source of funds, and prefer a signatory who already holds a UAE residence permit. Allow several weeks.

Dubai or Qatar?

Dubai offers a larger, very competitive market. Qatar is smaller and less crowded, with 10% corporate tax and no VAT to date. See company tax in Qatar.

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