Is a UAE company right for your business? A suitability check by business model

Whether a UAE company suits your business depends on a small set of questions that official sources make decisive: where your customers are, whether you can maintain substance in a free zone, how many people need visas, how your income will be taxed and which licence your activity needs. The UAE Government portal sets the mainland access rules for free zone companies, the Federal Tax Authority (FTA) and Ministry of Finance set the corporate tax and VAT rules, and each free zone licenses its own list of activities. This guide sets out those questions by business model; it does not argue that the UAE is or is not the right choice.

Five questions for every business model

1. Where are your customers? The UAE Government portal states that free zone companies can import, export and re-export with generally no restrictions, but that to sell goods or services locally a free zone company must work through a licensed mainland distributor or establish a mainland branch or company. In Dubai, Executive Council Resolution 11 of 2025 adds licences and permits issued by the Department of Economy and Tourism (see free zone vs mainland).

2. Can you show substance? The FTA's Free Zone Persons guide (May 2024) states that, for the 0% rate on Qualifying Income, a company must carry out its core income-generating activities in a free zone and have adequate assets, full-time employees and operating expenditure there. It may outsource those activities to other persons in a free zone if it supervises them adequately.

3. Who needs a visa? According to the UAE Government portal, work permits and residence visas for free zone employees are applied for through the free zone authority, and the number of visas a business can get depends on factors such as the package it signs up for.

4. How will income be taxed? Corporate tax is 0% on taxable income up to AED 375,000 and 9% above it (Cabinet Decision 116 of 2022, as published by the Ministry of Finance). The FTA's July 2024 bulletin states that every Free Zone Person, including a Qualifying Free Zone Person, must register for corporate tax and file a return within 9 months of the end of each tax period. VAT is 5%, and the FTA states that registration is mandatory once taxable supplies and imports exceed AED 375,000 over the previous 12 months (or are expected to within 30 days), and optional above AED 187,500.

5. Which licence covers your activity? Each free zone publishes its own licence types and activity list. Some activities also need another authority's approval; the zone tells you which.

Professional services and consulting

• Customers: if clients are mainland companies, the mainland access rules above apply.
• Tax: consulting does not appear in the list of Qualifying Activities in Ministerial Decision 229 of 2025. The FTA's guide explains that income from transactions with other Free Zone Persons that are the Beneficial Recipients of a service can still be Qualifying Income, provided it does not relate to an Excluded Activity. Transactions with natural persons are an Excluded Activity under the Decision, with limited exceptions.
• Licensing: some professions need approval from an authority other than the free zone; the consultants guide gives an example from Dubai.

Online and e-commerce businesses

• Customers: selling goods to UAE buyers outside the zone falls under the mainland access rules. According to the UAE Government portal, customs duty becomes due when goods move from a free zone into the mainland market.
• Tax: Ministerial Decision 229 of 2025 lists transactions with natural persons as an Excluded Activity, and the FTA's guide treats revenue from Excluded Activities as non-qualifying revenue, which must stay within the de minimis limit (the lower of 5% of total revenue or AED 5 million). VAT registration follows the thresholds above.
• Licensing: activity names for online selling differ between zones; confirm yours on the zone's activity list.

Trading and re-export

• Customers: the portal states that goods imported into a free zone carry 0% customs duty and goods stored for re-export carry none.
• Tax: Ministerial Decision 229 of 2025 lists trading of Qualifying Commodities, distribution of goods in or from a Designated Zone and logistics services among Qualifying Activities, each with defined conditions. Designated Zone status for VAT and corporate tax is set out in the VAT Designated Zones guide.
• Premises: warehouse or yard needs depend on the zone's published office types.

Software and tech

• Substance and staff: a growing team means more visas, and the FTA's substance condition refers to full-time employees in the free zone.
• Tax: the FTA's guide defines Qualifying Intellectual Property as patents, copyrighted software and rights functionally equivalent to a patent, excluding trademarks, and applies a nexus test linking income to the company's own research and development spending.
• IP: the UAE Government portal states that the Ministry of Economy and Tourism registers trademarks and intellectual works, and lists software among protected works.

Holding companies

• Tax: Ministerial Decision 229 of 2025 lists holding of shares and other securities for investment purposes as a Qualifying Activity, and treats shares as held for investment when held for an uninterrupted period of at least 12 months. The substance, audited accounts and other conditions in the FTA's guide still apply.
• Licensing: some zones publish a holding licence; see holding companies by zone.

Freelancers and creators

• Permit or company: a freelance permit licenses you as an individual; a company is a separate legal entity. See freelance permits.
• Tax: the FTA states that a natural person conducting business in the UAE is subject to corporate tax only if turnover from that business exceeds AED 1 million in a calendar year; wages, personal investment income and real estate investment income are not counted. The FTA's natural persons guide (November 2023) treats a sole proprietorship and its owner as one taxable person.
• Media: content and media activities carry their own federal rules, covered in the content creators guide.

Where to go next by business model

Questions to take to the authorities

• The free zone: does its activity list cover everything you plan to do, and how many visas come with each package?
• The emirate's economic department: what licence or permit would you need to serve mainland customers?
• A licensed tax adviser: which of your revenue streams would be qualifying, excluded or non-qualifying, and how would the de minimis limit apply?

Next steps

If the questions above point towards a free zone, the free zone finder builds a shortlist from your activity, visa needs and budget, and the free zones list shows every zone we track. The guide to how to set up a company in the UAE covers the steps, and how we verify explains where our figures come from.