Establishing a Business Presence in the UAE – Updated Guide (2026)
The United Arab Emirates (UAE) continues to remain one of the most attractive global destinations for foreign investment due to its stable regulatory framework, strategic location, investor-friendly policies and modern infrastructure. Over the past few years, the UAE government has introduced several reforms aimed at simplifying business formation and encouraging international investors to establish their regional headquarters in the country.
The main methods by which foreign businesses may establish a presence in the UAE are as follows:
-
Incorporating a Limited Liability Company in the mainland (LLC);
-
Establishing a branch in the mainland;
-
Establishing a professional partnership or professional sole proprietorship (with unlimited liability) in mainland;
-
Establishing a company or opening a branch in a Free Trade Zone.
The procedures and requirements for establishing a business often involve liaising with a number of institutions and regulatory bodies, both at the local Emirate level and at the federal level, depending on the nature of the venture and the legal structure chosen by the investor.
Incorporating a Limited Liability Company (LLC)
Under the UAE Commercial Companies Law, foreign investors can conduct business in the mainland through a license obtained from the Department of Economic Development (DED) of the relevant Emirate. The Limited Liability Company (LLC) remains one of the most popular methods of doing business in the UAE across a wide range of commercial sectors.
An LLC structure is suitable for most trading and service activities. However, certain regulated activities such as banking, insurance and financial investment services may require special approvals or may need to be conducted through other specific corporate structures regulated by federal authorities.
UAE National Partner Requirements
Historically, mainland companies required a UAE national partner holding at least 51% shareholding. However, following major legislative reforms introduced through amendments to the UAE Commercial Companies Law, foreign investors can now establish many types of mainland companies with 100% foreign ownership, depending on the activity being undertaken.
The exact ownership structure depends on the economic activity approved by the relevant Emirate’s Department of Economic Development. LLCs can be incorporated with a minimum of one shareholder and up to fifty shareholders.
Capital Requirements
The minimum share capital requirement is determined based on the activity and may be specified by the Department of Economic Development of the relevant Emirate. In many cases today, no fixed minimum capital is required for most commercial activities.
Additionally, investors are generally not required to deposit the capital at the time of incorporation. The capital may be injected at a later stage depending on the operational requirements of the company.
Procedure
An initial application seeking approval of the company’s trade name and business activities must first be submitted to the relevant government registration authority.
-
In Dubai this is the Dubai Department of Economy and Tourism (DET) (formerly Dubai Department of Economic Development).
-
In Abu Dhabi the relevant authority is the Abu Dhabi Department of Economic Development (ADDED).
Depending on the nature of the activity, approvals from specific regulatory authorities may also be required. For example, tourism-related businesses typically require approvals from the Department of Tourism, while healthcare services may require approvals from health regulatory authorities.
A Memorandum of Association (MOA) must then be drafted in accordance with the provisions of the Commercial Companies Law and signed before a UAE Notary Public.
A copy of the Ejari certificate (the tenancy registration for the office premises) must also be submitted to the relevant licensing authority together with supporting documents relating to the shareholders and the proposed manager of the LLC.
Once the application is approved and all applicable government fees are paid, the company will be registered in the Commercial Registry and a commercial licence will be issued allowing the entity to commence operations.
Branches of Foreign Commercial Companies
A foreign company may establish a branch office in the UAE mainland. The registration of a branch office does not create a separate legal entity. Instead, the branch is considered an extension of the parent company, and the parent company remains fully responsible for all liabilities of the branch.
A branch office may carry out commercial activities similar to those undertaken by its parent company. The permitted activities must be listed in the branch’s trade licence and must generally correspond with the activities of the parent entity.
Authorities may impose restrictions depending on the nature of the activities and the Emirate in which the branch is established.
A branch office may also be established by a UAE-based company in another Emirate, Free Zone, or mainland jurisdiction.
Procedure
Branch offices must obtain an operating licence from the Department of Economic Development of the relevant Emirate.
After initial approval is obtained, the application must also be registered with the UAE Ministry of Economy.
Corporate documents required typically include:
-
Memorandum and Articles of Association of the parent company
-
Certificate of Incorporation
-
Board resolution approving establishment of the branch
-
Audited financial statements of the parent company
-
Power of Attorney appointing the branch manager
These documents usually need to be notarised and legalised through diplomatic channels before submission to the UAE authorities.
Professional Partnerships and Sole Professional Proprietorships
Professional partnerships may be formed by two or more individuals who are engaged in professional activities. Alternatively, an individual may operate through a sole professional licence issued in his or her own name.
These entities can generally be 100% foreign owned, but they typically must appoint a UAE national service agent. The service agent does not hold ownership in the business but acts as a local representative for administrative matters with government authorities.
Professional licences are commonly issued for services such as:
-
Legal consultancy
-
Auditing and accounting services
-
Management consultancy
-
Educational services
-
Medical services
-
Engineering consultancy
Individuals operating under this structure have unlimited liability and are personally responsible for the obligations of the business.
Procedure
Depending on the profession, approvals may be required from specific government authorities.
For example:
-
Law firms in Dubai must obtain approvals from the Legal Affairs Department of the Government of Dubai.
-
Medical professionals require approval from the Ministry of Health or local health authorities.
Applications are submitted to the Department of Economic Development along with documents such as:
-
National service agent agreement
-
Office tenancy contract (Ejari)
-
Educational qualifications or professional certificates
-
Experience certificates
In some cases, a certificate of good standing from a professional regulatory body in the home country may also be required.
Establishing an Entity in a UAE Free Trade Zone
The UAE’s numerous Free Trade Zones offer foreign investors the opportunity to establish businesses with 100% foreign ownership, full repatriation of profits and simplified regulatory procedures.
Companies operating in free zones generally do not require a UAE national partner or agent. Free zones are therefore particularly attractive for international businesses looking to establish regional offices, logistics hubs or technology startups.
Traditionally, companies operating from free zones could not conduct business directly in the UAE mainland without appointing a local distributor or establishing a mainland branch.
However, recent regulatory developments have introduced greater flexibility for Free Zone companies wishing to operate in the mainland market.
Latest Regulatory Updates for Free Zone Companies Operating in Mainland (2025–2026)
In recent regulatory updates introduced by several Emirates toward the end of 2025, Free Zone companies have been given additional pathways to conduct business activities in the UAE mainland without fully restructuring their operations.
Under the new framework, a Free Zone company may now engage in mainland business activities through one of the following mechanisms:
-
Obtaining a temporary mainland licence, typically valid for six months, issued by the relevant Department of Economic Development. This allows Free Zone companies to undertake specific projects or business activities in the mainland market for a limited duration.
-
Applying for a permanent mainland licence while continuing to maintain their Free Zone entity. In this case, the company must meet the regulatory requirements of the Department of Economic Development and pay the applicable licensing fees.
-
Establishing a branch of the Free Zone company in the mainland, which allows it to conduct business activities directly within the UAE domestic market.
These developments represent an important policy shift aimed at improving business flexibility, reducing structural barriers between Free Zones and mainland markets, and encouraging Free Zone businesses to expand their operations within the UAE economy.
Certain Free Zones such as Meydan Free Zone have also been facilitating this process by issuing No Objection Certificates (NOCs) allowing companies to establish offices or operational spaces in the mainland.
Furthermore, it has become increasingly common for Free Zone entities to operate from business centres or serviced office spaces located in mainland areas, subject to the approval of both the Free Zone authority and the relevant mainland licensing authority.
Types of Free Zones
In recent years the UAE has witnessed a significant expansion in the number of Free Zones, with more than forty Free Zones currently operating across the country.
Traditionally, Free Zones were located around major seaports or airports to facilitate international trade and logistics. Examples include:
-
Jebel Ali Free Zone (JAFZA)
-
Hamriyah Free Zone
-
Dubai Airport Free Zone (DAFZA)
-
Sharjah Airport Free Zone
-
Abu Dhabi Airport Free Zone
Today, Free Zones cater to a wide range of industries including technology, media, finance, healthcare, logistics and e-commerce.
Following the introduction of Value Added Tax (VAT) in the UAE in 2018, Free Zones have been classified into:
-
Designated Free Zones
-
Non-Designated Free Zones
Designated Free Zones are specific geographic areas treated as outside the UAE for VAT purposes for certain transactions involving goods. These zones typically have physical boundaries and controlled entry and exit points.
Types of Free Zone Entities
Investors may establish different types of entities in Free Zones depending on the ownership structure.
Common types include:
-
Free Zone Establishment (FZE) – a single shareholder company
-
Free Zone Company (FZC) – a company with two or more shareholders
-
Branch of a foreign company
Most Free Zone entities provide limited liability protection to shareholders.
These entities can be fully owned by foreign investors and allow for full repatriation of capital and profits.
Capital Requirements
Capital requirements vary significantly between Free Zones.
For example:
-
Companies in the Dubai Multi Commodities Centre (DMCC) may require capital ranging from AED 50,000 to AED 1 million depending on the activity.
-
Other Free Zones may have lower requirements or may not require a fixed capital amount.
In many cases, the capital does not need to be deposited immediately at the time of incorporation.
Foreign branch offices operating in Free Zones generally do not have minimum capital requirements.
Procedure
Free Zone companies must obtain a business licence from the relevant Free Zone Authority and renew it annually.
Companies must also lease office space within the Free Zone. Options may include:
-
Physical office premises
-
Warehouses
-
Flexi-desk facilities
-
Co-working office solutions
Many Free Zones such as Dubai Silicon Oasis offer flexi-desk packages suitable for startups and small companies with minimal staff requirements.
Corporate documents similar to those required for mainland companies must be submitted, and certain regulated activities may require additional approvals.
Dubai International Financial Centre (DIFC)
The UAE has also established specialized Free Zones for specific industries.
The Dubai International Financial Centre (DIFC) is one of the most prominent financial hubs in the region and serves the global financial services industry.
The DIFC hosts:
-
International banks
-
Asset management companies
-
Insurance firms
-
Legal and professional services firms
What makes the DIFC unique is its independent legal and regulatory system based largely on English common law principles.
The DIFC also operates its own independent judicial system through the DIFC Courts, which adjudicate civil and commercial disputes.
Parties outside the DIFC may also choose to resolve disputes through DIFC arbitration or mediation frameworks.
The DIFC also operates the DIFC Wills Service Centre, allowing non-Muslims to register wills governing their UAE assets.
Other Considerations
Legalisation and Translation of Documents
Documents originating outside the UAE must typically be notarised and legalised through diplomatic channels before submission to UAE authorities.
After legalisation, the documents often need to be translated into Arabic by a certified translator, particularly for mainland company registrations.
This requirement may not apply to certain Free Zone registrations.
Visa and Emirates ID
At least one investor or manager typically needs to obtain a UAE residence visa and Emirates ID in order to open a corporate bank account.
The process requires:
-
Medical examination in the UAE
-
Fingerprint and biometric registration
-
Emirates ID issuance
Companies may also sponsor visas for employees based on the visa quota allocated to the business.
Fees and Taxes
Since 2018, the UAE has implemented Value Added Tax (VAT) at a rate of 5% on most goods and services.
Exports of goods and certain international services may qualify for VAT exemptions or zero-rating.
In addition, the UAE introduced Corporate Tax at a rate of 9% on taxable corporate profits, applicable for financial years beginning after June 2023.
However, Qualifying Free Zone Entities may continue to benefit from 0% corporate tax on qualifying income, provided they comply with regulatory conditions and maintain adequate economic substance within the Free Zone.
There is no personal income tax in the UAE.
The UAE also imposes a customs import duty of 5% on most imported goods, although higher duties may apply to certain products such as alcohol and tobacco.
Annual licence renewal fees are payable to the relevant licensing authorities, and additional fees apply for visa sponsorships, labour permits and Chamber of Commerce registrations.
For further details, please contact: