The United Arab Emirates (UAE) is situated in the Middle East, strategically located between Asia, Africa and Europe, bordering the Gulf of Oman and the Persian Gulf, between Oman and Saudi Arabia; it is in a strategic location slightly South of the Strait of Hormuz, a vital transit point for world crude oil.

The UAE offers businesses a strong enabling environment, new business opportunities, investor friendly regulations, stable political and macroeconomic conditions, a future-oriented Government, good general infrastructure, and ICT infrastructure. 

The country has made continuous improvements to its regulatory environment and is ranked 16 in the world for ease of doing business in the “World Bank’s Doing Business” index. The United Arab Emirates also ranks first among the countries most attractive to foreign direct investment in the Middle East (ME) and North

Africa region and 15th globally. The UAE are in the top ranks of several other global indices, such as the World Economic Forum’s (WEF) Global Competitiveness Index (GCI), the World Happiness Report (WHR) and the Global Innovation Index (GII). The Economist Intelligence Unit (EIU) assigns the UAE rank two regionally in terms of business environment and 22 worldwide. UAE is ranked first in the region and fourth globally in the Global Entrepreneurship Index (GEI) 2020 by the Global Entrepreneurship Monitor (GEM – NECI).


The UAE could be an attractive hub for investors to locate their business interests for the following reasons:

  • Strategic location.
  • The UAE has one of the most liberal trade regimes in the Gulf region and attracts strong capital flows from across the region.
  • First in World Bank Doing Business Index for MENA region.
  • Direct links to all major global markets by land, sea, and air.
  • UAE is focussed on economic diversification in trade, logistics, banking, tourism, real estate, and manufacturing and provides opportunities in various industries.
  • UAE has a well-established infrastructure, strong banking system and a stable political system.
  • Large sovereign wealth fund.
  • SMEs constitute a major chunk of overall business.
  • Energy supply is abundant and low-priced.
  • Effective 1st June 2023 there will be a 9% corporate tax (one of the lowest in the world) on business profits above AED 375,000 .
  • No personal income tax.
  • Low value added tax – 5%.
  • 100% foreign ownership allowed in Free Zones and recently in mainland UAE too.
  • 100% customs tax exemption in custom bonded Free Zones.
  • There are no exchange control restrictions for repatriation of income and capital.
  • United Arab Emirates Dirham (AED) pegged to United States Dollar (USD) (USD 1.00 = AED 3.6725).
  • There are a high number of expatriate workers (over 80%) with skilled, multicultural and diverse talents at all levels of the economy.
  • UAE’s culture is driven by Islamic traditions, however, with over 150 nationalities, expatriates are free to practise their own cultures.
  • UAE provides a safe and secure family environment with one of the lowest crime rates in the world.


Abu Dhabi International Airport / Al Ain International Airport / Dubai International Airport / Al Maktoum Airport / Sharjah International Airport / Ras Al Khaimah International Airport / Fujairah International Airport. 


Zayed Port, Abu Dhabi / Khalifa Port, Abu Dhabi / Free Port, Abu Dhabi / Musaffah Port, Abu Dhabi /Jebel Ali, Dubai / Mina Rashid, Dubai / Sharjah Container Terminal (SCT), Sharjah / Khor Fakkan Container Terminal (KCT), Sharjah / Mina Saqr, Ras Al Khaimah / Fujairah Port.


The Emirati Dirham is the official currency of the UAE, abbreviated officially as AED. Since 1980, the Dirham has been pegged to the US Dollar (USD 1 is equivalent to AED 3.6725). There are no exchange control regulations in the UAE.


Banks in the UAE are segregated into two major categories: Locally Incorporated Banks and branches of Foreign Banks.

The UAE has 21 local banks and 27 foreign banks. These banks, through their branch networks, cater to the financial needs of the UAE business/population. Apart from conventional banking, UAE also offers Islamic banking.

The Central Bank of the UAE is the banking regulatory authority in the country and its main responsibility is formulation and implementation of monetary policy and banking regulation in the United Arab Emirates.



Foreign investors interested in establishing a formal presence in the UAE generally have two options:

  1. Establish a presence in the UAE mainland, in any one of the Emirates or
  2. Establish a presence in one of the many UAE Free Zones as an onshore entity to undertake business within the Free Zone and outside the UAE or as an offshore entity to undertake business only outside the UAE.

All entities operating in the UAE are required to have a valid license to perform business activities within a particular emirate or Free Zone.


The legal forms for the UAE mainland are governed by Federal Law No. 2 of 2015 – the Commercial Companies Law (CCL). Mainland companies are incorporated onshore and licensed by the Department of Economic Development (DED) or equivalent local authority depending on the emirate. Mainland companies can be incorporated anywhere (other than free zones) in the UAE and can trade internationally as well as directly with the local market.  Mainland Companies can enter into Government contracts. Customs taxes are applicable to mainland entities.

Mainland entities normally are formed as:


Entities can set up a branch in the UAE mainland. A branch of a foreign or UAE company are allowed to carry out the same activities as that of the parent Company. While they are free to trade independently and earn a profit, they remain wholly owned by the parent company and are not a separate legal entity.


A representative office of a foreign company can be set up in the mainland and may only carry out marketing and promotional activities for the Parent Company. Such entities may not undertake any business or trade activity.


An LLC can be established in mainland UAE. It must have at least two shareholders with a maximum of 50. Recently, the UAE has amended the Commercial Companies Law No 2 of 2015 (CCL) vide decree Law No. 26 of 2020, allowing foreign nationals to have 100% ownership of such companies, with certain restrictions. LLCs are free to trade with the local market without the need for a service agent.


LLCs are not generally subject to any minimum share capital requirement; however, this is at the discretion of the Department of Economic Development (DED)/related authority and in most cases, they require investors to inject a paid-up capital of around AED 150,000 to AED 300,000 depending on the activity and Emirate.


Investors can also start business in any of the Free Zones in UAE. Free zone companies are incorporated within special economic zones.  Free zone entities can do business within the free zone and internationally. Free zone entities can trade with the local UAE market only with the assistance of a local service agent or distributor. Free Zone entities cannot take on Government contracts. Many free zones offer license packages inclusive of visa costs, as well as access to coworking space, office space, warehousing, and more.

There are three main types of entities in Free Zones. They can operate only within the specific Free Zones and outside the UAE: –


A foreign entity or a UAE Company can establish a branch in a Free Zone.


A Free Zone Establishment is a legal entity that can be established in a Free Zone and can have only one shareholder. The minimum share capital requirement will vary (AED 50,000 to AED 1,000,000) according to the activity and Free Zone.


An FZCO/FZLLC requires a minimum of two shareholders. The minimum share capital requirement will vary (AED 50,000 to AED 1,000,000) according to the activity and Free zone.


Businesses not intending to do any business in the UAE, can set up business under the offshore regulatory system. Such businesses act as holding companies for subsidiaries outside the UAE. Under the offshore regulations of certain free trade zones, these companies act as a vehicle to own freehold property within the UAE and also to carry on almost any business outside the UAE. UAE offshore companies are governed by the relevant Free Zone’s offshore regulatory laws and regulations. Offshore companies are not eligible for visas.


There are more than 45 Free Zones in the UAE with a majority of them in Dubai. Each Free Zone follows its own rules and regulations. However, they are subject to certain UAE federal laws.

Following are some of the Free Zones in UAE:

Jebel Ali Free Zone Authority (JAFZA) / Dubai Airport Free Zone Authority (DAFZA) / Dubai International Financial Centre (DIFC) /Dubai Healthcare City / Dubai Industrial City (DIC) / Dubai Media City (DMC) / Dubai Multi Commodities Centre (DMCC) / Dubai Internet City / Abu Dhabi Global Market (ADGM) / Khalifa Industrial Zone Abu Dhabi (KIZAD) / Hamriyah Free Zone (HFZ) / Sharjah Airport International Free Zone (SAIF) / Ras Al Khaimah Free Trade Zone (RAKFTZ) / Ajman Free Zone (AFZ) / Ajman Media City Free Zone / Fujairah Free Zone (FFZ).


  • Free Zone entities are offered a 15-50 year ‘tax holiday’. (Ministry of Finance has announced the introduction of a Federal Corporate Tax regime wef 1st June 2023. Free zone businesses will be subject to CT, but the CT regime will continue to honour the CT incentives currently being offered to free Zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE).
  • No restrictions on foreign ownership ie 100% foreign ownership allowed.
  • No restrictions on capital and profit repatriation.
    100% customs tax exemption in custom bonded freezones.