UAE company formation: free zones, RAK ICC and 0–9% tax
The UAE has become the default hub for founders who want low tax with a real place to live and work. Since corporate tax arrived in 2023 the analysis is more nuanced than '0% Dubai company' — here is the current picture.
Corporate tax
0% / 9% above AED 375k
Formation
~7 days
Our office
Ras Al-Khaimah
Best for
Holding, SPV, trading, crypto
Three structures, three purposes
Free zone companies (RAK Economic Zone, DMCC, IFZA, ADGM, DIFC and others) are the workhorse: full foreign ownership, residence visas, and access to free-zone incentives. Mainland companies are for selling into the UAE domestic market. RAK ICC offshore companies are holding vehicles — efficient for owning assets and shares, but not for local operations or visas.
Choosing wrongly is expensive: an offshore vehicle cannot obtain visas, and a mainland licence carries obligations you may not need.
Tax as it now stands
The 0% free-zone outcome is a regime with qualifying-activity and substance conditions, not an automatic status. Treat any adviser who describes it as guaranteed with caution.
- 9% federal corporate tax on taxable profit above AED 375,000; 0% below.
- Qualifying free zone persons can retain 0% on qualifying income — conditions are strict and tested annually.
- No personal income tax; 5% VAT with registration thresholds.
- Transfer pricing and economic substance reporting now apply.
Substance and residence
- Physical premises or a flexi-desk appropriate to the licence.
- Resident director or manager and adequate qualified personnel.
- Emirates ID and residence visas via the company, with a UAE tax residence certificate where needed.
- Bookkeeping, audit where required, and corporate tax registration and filing.
Banking in the UAE
UAE banking is excellent once you are in and demanding on the way in. Banks expect residence, substance, a coherent business explanation and clear source of wealth; high-risk verticals such as crypto and forex need the licence and AML programme in place before the account conversation. Our Ras Al-Khaimah presence means the file is prepared locally and followed up in person.
Crypto and regulated activity
Virtual asset activity is licensed — VARA in Dubai, ADGM in Abu Dhabi, or specific free-zone approvals. A general trading licence does not authorise exchange, custody or brokerage services, and using one for that purpose is the fastest way to lose both the account and the licence.
Frequently asked questions
Is the UAE still 0% tax?
For individuals, yes — there is no personal income tax. Companies pay 9% above AED 375,000 of profit, unless they meet the qualifying free zone person conditions for 0% on qualifying income.
Which free zone should I use?
It depends on activity, visa needs and budget. RAK zones are cost-efficient for holding and trading; DMCC suits commodities and general business; ADGM and DIFC suit financial services.
Do I need to live in the UAE?
Not legally to own a company, but residence and genuine substance make banking and tax residence far simpler.
How long does formation and banking take?
Around a week for the licence and visas to be initiated; three to six weeks for banking once the file is complete.
Want this applied to your file?
A short consultation replaces general guidance with a written recommendation. Reply within 2 hours.
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