Starting a business in the United Arab Emirates: your gateway to global success

 Located at the intersection of important global trade routes, the UAE provides unparalleled access to key markets across the Middle East, Africa and Asia. This connectivity makes it an ideal base for companies with regional and international ambitions.

 The UAE continues to diversify beyond oil, fostering growth in sectors such as technology, finance, healthcare, logistics and renewable energy. Its stable political climate and long-term economic vision offer businesses from different industries confidence and security.

As a member of the Gulf Cooperation Council (GCC), the UAE maintains free trade agreements with countries such as Singapore and New Zealand. Its expanding network of Comprehensive Economic Partnership Agreements (CEPAs) further strengthens its position as a global trading hub, providing ample opportunities for conducting international trade.

The UAE offers 100% foreign ownership in many sectors, full profit repatriation and a streamlined incorporation process. with a competitive 9% corporate tax rate  and minimal red tape, the pro-business regulatory environment is designed to attract and support entrepreneurs and investors.

From advanced seaports and international airports to cutting-edge digital connectivity, the UAE has invested heavily in infrastructure to support business growth. These assets ensure efficient logistics, smooth operations and seamless international reach.

The UAE is home to a highly skilled, multicultural global workforce. Its progressive immigration policies, including long-term residency options such as the Golden Visa and Green Visa, are designed to attract top talent and entrepreneurs, making it easier for businesses to recruit and retain the people they need to grow.

There are currently more than 40 free zones across the UAE’s seven emirates. These designated economic areas – often focusing on specific industries and sectors – have been established with the primary aim of encouraging international business and investment. They operate with their own distinct regulations and are designed to offer a supportive and collaborative business environment.

As a cornerstone of the country’s economic diversification strategy, the various free zones come with features that have attracted tens of thousands of companies.

Starting your company within a UAE free zone offers several advantages:

Tax advantages:  Qualifying Free Zone Persons (QFZP) can benefit from a 0% corporate tax rate on qualifying income in the UAE. Free zones typically offer other benefits, such as exemption from customs duties.

Infrastructure and facilities:  Ready-to-use infrastructure – including offices, warehouses, industrial units and meeting facilities – are available and tailored to business needs. 

In-zone support services: Free zones also have their own supportive ecosystem providing opportunities for networking to help companies grow.

Some of the more well-known and highly regarded free zones in the UAE include:

Dubai Multi Commodities Centre (DMCC), Dubai:  A leading global hub for trade in gold, diamonds, coffee and other commodities. 

As an international business services provider for DMCC, we offer streamlined advisory, registration, accounting and tax support for companies setting up here, particularly those in technology, innovation and sustainability.

Dubai International Financial Centre (DIFC), Dubai: A leading international financial centre with its own independent legal and regulatory system, attracting many financial services companies.

Jebel Ali Free Zone Authority (JAFZA), Dubai: One of the world's largest free zones, focusing on logistics, manufacturing and trade. It hosts over 10,700 companies, including numerous Fortune 500 firms.

Dubai Silicon Oasis (DSO), Dubai. A technology park and free zone focused on fostering innovation and technological advancement, relevant for businesses in the technology sector.

Abu Dhabi Global Market (ADGM), Abu Dhabi. Like the DIFC, the ADGM is another international financial centre with its own legal and regulatory framework.

Khalifa Economic Zones Abu Dhabi (KEZAD), Abu Dhabi. Premier destination for warehousing, manufacturing and logistics operations, thanks to its state-of-the-art infrastructure, strategic proximity to Khalifa Port and availability of land for large-scale industrial developments.

Ras Al Khaimah Economic Zone (RAKEZ). Accommodates a wide range of business activities, such as manufacturing and services.

As each free zone has its own fee structures, facilities and advantages, foreign investors often compare a few before deciding.  Our team at Hawksford can advise and assist you in choosing the most suitable free zone for your UAE venture.

Each of the UAE's free zones is governed by its own independent authority, which is responsible for issuing trade licences and regulating business activities within its specific geographical area. These licences generally permit companies to conduct business both within the free zone and internationally.

While free zone entities can typically engage with clients outside the zone, they are usually required to maintain a physical office or industrial space within the boundaries of the free zone .

 Besides the free zones, foreign investors have the option to set up a mainland company – an onshore entity that is permitted to operate both within the UAE market and internationally.

These companies are registered with the Department of Economic Development (DED) of the specific emirate in which they are being established.

Opening a mainland company in the UAE presents several advantages:

• Market access and ownership. Businesses can conduct commercial activities freely across the entire UAE, including within free zones. Take note certain strategic sectors might require local participation.
• Participation in government contracts. Mainland companies can qualify to bid for federal and emirate-level contracts, boosting revenue potential.
• Greater business scope. Mainland licences cover a wider range of commercial and industrial activities than some free zones. It may also be easier to diversify or expand your business scope over time.
• Reputation and credibility. Being a mainland entity adds credibility when dealing with local and international partners.

Across the seven Emirates, certain locations consistently attract new company registrations thanks to their infrastructure, connectivity and business ecosystems. Here are some of the mainland locations popular for company set-up in the UAE:

• Business Bay, Dubai. Central location with many businesses established here.
• Sheikh Zayed Road, Dubai. Major commercial corridor lined with global corporate towers and easy access to DIFC.
• Al Quoz, Dubai. An industrial area located close to Dubai International Airport and Jebel Ali Port.
• Deira and Bur Dubai, Dubai: Houses historic trading hubs such as Al Rigga, Port Saeed and Al Karama.

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Mainland companies in the UAE are subject to the UAE Commercial Companies Law and other relevant federal and Emirate-level regulations. The UAE has also been strengthening its regulatory framework to align with international standards while maintaining a pro-business stance.

The onus is on the business owners to stay updated and comply with the latest regulations. For example, the introduction of the 9% corporate tax rate meant companies had to quickly register and adapt. To ease the transition, small business relief is available to taxable persons for tax periods that end before or on 31 December 2026. The profit generated during this period will be taxable at 0%.

To qualify, you will need to be a resident person for corporate tax purposes and have revenue of less than or equal to AED 3,000,000 in the relevant tax period and any previous tax.

For support with important tax and accounting matters in the UAE, businesses can engage our Dubai-based Hawksford team.

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For businesses that intend to directly engage with the broader UAE market, opting for a mainland company is often the preferred route. Likewise, companies that foresee the UAE itself as a significant portion of their revenue, or those whose business model requires physical presence in UAE cities, may consider mainland incorporation.

 Free zones, on the other hand, have traditionally been favoured by businesses with a strong focus on international trade, export and re-export activities from the UAE. Those in a specialised field can also benefit from being in a free zone dedicated to their sector.

Below is a comparison of the key differences between mainland and free zone business set-ups in the UAE:

These entities are typically formed within specific free zones that have regulations catering to offshore incorporations.

Offshore companies often serve as holding companies for assets and can be used for international trading activities conducted outside the UAE. While an offshore company can open a corporate bank account, it is generally not permitted to get a business licence within the UAE.

It’s important to ensure that an offshore company structure matches your business’s plans for the UAE. Hawksford can provide advice on whether an offshore set-up is an appropriate choice for your circumstances.

The limited liability company (LLC) is a particularly common choice if you're aiming to operate within the UAE market, LLCs are used not only for general trade but also as subsidiaries for foreign companies establishing a presence, or as holding companies to manage assets and investments across the region.

Setting up an LLC involves key steps such as defining your business activity, choosing a trade name and getting necessary approvals and licences. An LLC requires at least two partners (up to a maximum of 50), with each partner's liability limited to their capital investment. Depending on the business activity, appointing a local service agent may be required.

LLCs can operate anywhere in the UAE and the Gulf Cooperation Council (GCC). This entity type caters to a range of business sizes, from SMEs to large corporates.

A public joint stock company (PJSC) must have at least five shareholders, with its capital divided into equal, negotiable shares. Founders initially receive a portion of these shares while the remaining shares are offered to the public. Shareholders’ liability is limited to their investment in the company’s capital. A PJSC allows for the buying and selling of shares, making it ideal for businesses seeking to raise capital from the public. This type of company suits larger firms, including those wishing to list on a stock exchange.

A private joint-stock company (PrJSC) in the UAE allows shares to be privately bought and sold among a limited number of shareholders, capped at 200. It requires a minimum capital of AED 2 million and allows up to 49% foreign ownership (100% for GCC nationals).

The company's capital gets divided into shares of equal nominal value. If one person owns a PrJSC, it is called a ‘private joint-stock company – single ownership.’ In this structure, the owner's liability is limited to the capital specified in the company's Memorandum of Association.

A foreign branch office is an extension of the parent company that can perform contracts and other specified activities locally. For example, a company based in another member state of the Gulf Cooperation Council (GCC) or already registered elsewhere in the UAE can establish a branch office.

This setup allows you to retain 100% foreign ownership. The branch operates under the same name and business activities as your parent company but must lease office premises. It’s worth noting that as of late 2024, the bank guarantee of AED50,000 is no longer a prerequisite for setting up a branch office.

A representative office in the UAE functions primarily as a cost centre and focuses on marketing and promotional activities for the foreign parent company. It is restricted to gathering information, conducting market research and soliciting orders or projects for your parent company. The business setup process and requirements are like those for a branch office, ensuring alignment with local regulations.

A holding company is a corporate entity established to hold the shares of other companies without conducting active trading. It can be set up in the mainland or in free zones such as the DIFC, ADGM and DMCC. It is worth noting that holding companies in free zones can benefit from more advantageous tax regimes.

FZ Co or FZ LLC refers to companies set up in one of the UAE's numerous free zones. You might encounter variations of this term such as the free zone company (FZCO) for entities with multiple shareholders and free zone establishment (FZE) for single-shareholder entities.

Market entry strategies should be tailored to the specific needs and contexts of businesses from different regions, shaped by trade agreements, cultural ties, regulatory familiarity and expansion goals. Below are some common considerations and market entry considerations if you’re setting up business in the UAE from:

The UAE and the UK share a long-standing economic relationship, complemented by strong trade flows and a large British expatriate community in the Emirates. Over 5,000 UK companies are operating in the UAE, with more than 240,000 British citizens living in Dubai.

British businesses often find the UAE's legal and business environment familiar, given the prevalence of English language and common law principles in certain jurisdictions like the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM).

Organisations such as the UK-UAE Business Council, the British Chambers of Commerce and the Department for Business and Trade (DBT) can also help British entrepreneurs with market entry and networking opportunities.

Entry strategy: UK firms typically establish a presence in reputable free zones such as DIFC, Dubai Multi Commodities Centre (DMCC), Dubai Internet City (DIC) and Jebel Ali Free Zone (JAFZA). These free zones offer benefits such as solid legal frameworks, tax incentives, 100% foreign ownership and strong industry-focused communities. They are particularly attractive for sectors like financial services, legal consultancy and education.

The European Union (EU) is the UAE’s second-largest trade partner, with non-oil trade reaching over AED240 billion in 2024. This robust trade growth signals expanding opportunities for European firms.

While free trade talks are underway, the UAE has pursued bilateral agreements with individual European states and signed CEPAs with countries like Turkey and Georgia, improving market access both ways.

Germany is also a leading European investor in the UAE. Over 1,200 German companies have offices in the UAE, most as headquarters for the region. Forums such as Investopia Europe have been launched to better connect UAE and EU business communities.

Entry strategy: European firms operate throughout the entire UAE, with a strong presence in the mainland to access local customers and a broader market. The UAE's Comprehensive Economic Partnership Agreements (CEPAs) with countries like Turkey and Georgia further facilitate trade and investment opportunities. A strong contingent of manufacturing and logistic companies are in Dubai South, Khalifa Economic Zones Abu Dhabi (KEZAD) and JAFZA free zones.

Southeast Asian nations and the UAE have accelerated their economic engagement, making the UAE a promising location for ASEAN-based companies looking westward. Exemplified by the 2024-2028 cooperation framework launched at the inaugural ASEAN-GCC Summit in 2023, companies can have increased confidence to register a company here.

The UAE has also signed CEPAs with several ASEAN countries, the latest being Malaysia. These agreements mean ASEAN businesses setting up in the UAE can expect easier market access and potential incentives.

Entry strategy: ASEAN firms show a strong preference for establishing operations in free zones that offer robust support and ecosystems tailored to trade, logistics and technology sectors. These include free zones such as the Dubai World Trade Centre (DWTC), DMCC and other strategic zones across Dubai and Abu Dhabi.

China is one of the UAE’s most significant economic partners. Bilateral trade between China and the UAE reached over AED 270 billion in the first nine months of 2024. Chinese businesses have also dramatically increased their footprint here, with over 15,500 having a presence in the UAE.

Hong Kong likewise maintains strong cooperation with the UAE and is currently exploring the potential of free trade agreements. The Belt and Road Initiative has further strengthened economic ties between the UAE, China, and Hong Kong.

Entry strategy: Chinese and Hong Kong firms often enter through designated free zones, taking advantage of full ownership and regulatory clarity. Proximity to key logistics corridors is a frequent consideration. On the practical side, you will need to be prepared to operate in an English-Arabic business environment and comply with local regulations.