Free Zone or Mainland?
Free zone company
- Formed in one of the many UAE free zones, each with its own authority and rules
- Usually allows 100% foreign ownership
- Well suited to international trade, consulting, technology and holding activities
- Doing business directly with the UAE mainland market may be restricted or need additional arrangements
Mainland company
- Licensed by the economic department of the relevant emirate, such as Dubai's Department of Economy and Tourism
- Can trade freely within the UAE and bid for many government contracts
- 100% foreign ownership is now permitted for most activities, with some strategic activities restricted
Basic Process
- Choose the business activity, which decides the licence type
- Choose the jurisdiction: free zone or mainland, and the emirate
- Reserve the trade name and obtain initial approval
- Prepare the memorandum or constitutional documents
- Arrange office space or a flexi-desk as required by the authority
- Obtain the trade licence
- Apply for establishment card and residence visas for owners and staff, as needed
- Open a corporate bank account
UAE Tax Points
- Corporate tax: UAE corporate tax applies at 9% on taxable income above a threshold, with 0% up to that threshold. Qualifying free zone persons may get 0% on qualifying income if they meet strict conditions.
- Corporate tax registration is required for all taxable persons, including free zone companies, within the prescribed timelines.
- VAT at 5% applies, and registration is mandatory once taxable supplies cross the threshold.
- Ultimate Beneficial Owner (UBO) information must be maintained and filed with the licensing authority.
Documents Required
- Passport copies of shareholders and managers
- Photographs
- UAE entry stamp or visa copy, if available
- Business plan for certain activities or free zones
- For corporate shareholders: incorporation documents, board resolution and attested or apostilled documents
Indian Compliance
Investment from India needs FEMA overseas investment compliance through your bank, and the UAE shareholding and bank accounts must be disclosed in the Indian ITR by residents. Residence status of the owner and place of effective management of the company should be reviewed. See Company Incorporation Outside India.
Common Mistakes to Avoid
- Choosing a free zone without checking whether you can serve your target customers
- Assuming the UAE company has no tax obligations
- Missing corporate tax registration deadlines
- Under-estimating time for bank account opening
- Moving money from India without FEMA compliance
Frequently Asked Questions
Can an Indian own 100% of a UAE company?
In free zones and in most mainland activities, yes.
Do I need to live in the UAE to own a company there?
No, but having a UAE residence visa can help with banking and operations.
Related Services
- International Business Setup
- Company Incorporation Outside India
- USA LLC Formation
- UK Company Formation
Talk to a Chartered Accountant
If you are looking for professional assistance with UAE Company Formation, along with UAE tax registration and Indian compliance, contact us for detailed guidance.
CA Mayank Agarwal (Chartered Accountants)
Raj Nagar Extension & Indirapuram, Ghaziabad
Phone / WhatsApp: 9718877122 | Email: fcamayankagarwal@gmail.com
This page gives general information for guidance only. Laws, forms, fees and timelines change from time to time and depend on individual facts, so please confirm the current position before acting. See all our service guides.