Corporate TaxQualifying Free Zone Person: the conditions behind the 0% Corporate Tax rate
Free zone companies pay 0% Corporate Tax on qualifying income only if every condition is met. What they are, and what happens if one is missed.
Business Setup
Choose the right jurisdiction, get licensed and start trading, with the paperwork handled for you.
Setting up a company in the UAE involves more decisions than most founders expect. Mainland or free zone, which emirate, which licensed activities, how many visas, how the shares are held: each choice shapes what you can do later, from where you are allowed to sell to how you are taxed.
The rules have also moved on considerably in recent years. Most mainland activities can now be fully foreign-owned, Corporate Tax applies to almost every company, and banks examine new account applications more closely than they once did. A structure that made sense a few years ago is not necessarily the right one today.
We help you make these decisions with the whole picture in view, then take care of the applications, approvals and follow-up. Because we also handle accounting, tax and AML compliance, the company we set up is ready for what comes after the licence, not just the licence itself.
What we cover
A mainland company is licensed by the economic department of the emirate it operates in (in Dubai, the Department of Economy and Tourism) and can trade directly with customers anywhere in the UAE. It suits businesses that need to serve the local market in person, such as retail, contracting and many service firms. We handle the trade name, initial approval, tenancy registration and licence issuance from start to finish.
The UAE has dozens of free zones, each with its own fees, permitted activities, office options and visa allowances. A free zone company can be fully foreign-owned and suits businesses that trade internationally or mainly with other companies. We compare zones against your actual plans rather than the headline package price, then manage the application through to licence issuance.
An offshore company is a non-trading entity, typically used to hold shares, property or intellectual property, or to sit at the top of a group structure. It cannot trade inside the UAE or sponsor residence visas. We help you decide whether an offshore vehicle genuinely serves your purpose and, if it does, take you through incorporation with a registry such as RAK ICC or JAFZA Offshore.
A trade licence must be renewed every year, and renewal often depends on other things being current: a valid tenancy contract, an establishment card and, in many free zones, audited financial statements. A lapsed licence can lead to fines and can block visa processing for the company. We track your renewal dates and prepare everything in advance, so renewal is routine rather than a last-minute scramble.
Opening a corporate bank account is often the slowest step in starting up, because banks need to be satisfied about who owns the business, where its money comes from and how it will trade. A clear, complete application makes a real difference. We help you assemble the documents and business profile banks look for and approach banks whose criteria suit your business, although the final decision always rests with the bank.
Once the company is licensed, owners, employees and their families need residence visas and Emirates ID cards. Each stage, from entry permit and change of status to medical test and biometrics, has its own forms, fees and timings. Our PRO service handles the submissions and government liaison and keeps track of renewal dates for every visa your company sponsors.
Since the ownership reforms, most businesses no longer need a UAE national shareholder or local service agent. Some still do, because of their activity or licence type, and others choose one for practical reasons, and in those cases we arrange it for you. We also advise on structuring decisions best made early: whether to use a holding company, a branch or a subsidiary, and how ownership is split between partners.
Businesses change: partners join or leave, activities expand, premises move, and some companies eventually close. Each change needs regulator approval and updated documents, and closing a company properly means clearing tax registrations, visas and liabilities before the licence is cancelled. We manage amendments, share transfers and voluntary liquidation so nothing is left open that could cause problems later.
Process
We discuss what you will sell, to whom and where, and how many people need visas. This tells us which jurisdictions and licence types genuinely fit.
We set out the realistic options side by side, covering costs, timelines, visa allowances and restrictions, and recommend one.
We prepare the documents, reserve the trade name and submit applications to the relevant authority, keeping you updated at each approval.
Once the licence is issued, we move straight on to the establishment card, residence visas, Emirates IDs and the bank account application.
We register the company for Corporate Tax, and for VAT where required, and can put bookkeeping in place from the first month.
Business Setup
We also handle accounting, tax and AML work, so we structure companies with their ongoing obligations already accounted for.
We compare jurisdictions on what they will cost and allow over several years, not on the cheapest first-year package.
Structuring questions are discussed directly with a partner of the firm.
We have been helping businesses establish and operate in the UAE since 2017.
FAQs
Have a question that is not answered here? Ask us directly, and we will give you a straight answer.
Ask a questionIt depends mainly on who your customers are. If you will sell directly to customers in the UAE market, a mainland licence usually makes sense. If you trade internationally or mainly with other businesses, a free zone may be the better fit. Visa needs, office requirements and your Corporate Tax position also matter, so we look at all of them together.
In most cases, yes. Free zone companies have always allowed full foreign ownership, and since 2021 most mainland activities can be fully foreign-owned too. A limited set of activities still requires UAE national participation, which we check against your chosen activities before you apply.
The licence itself can often be issued within a few working days to a few weeks, depending on the jurisdiction and whether any activity needs an external approval. Visas and the bank account add further time, and the bank account is usually the longest step. We give you a realistic timeline for your specific case at the outset.
Several steps can be completed remotely, particularly in free zones that accept digital signatures and online submissions. Residence visas, however, require a medical test and biometrics in the UAE, and most banks expect to meet account signatories. We plan the process to keep the number of visits to a minimum.
Yes. UAE companies, including free zone companies, must register for Corporate Tax with the Federal Tax Authority even if they expect to pay no tax. For new companies the deadline is linked to the date of incorporation, so it is best to register promptly once the licence is issued.
Late renewal usually attracts fines, and an expired licence can block visa processing and other government services for the company. If your licence has already lapsed, we can work out what is outstanding and bring the company back into good standing.
Insights
Corporate TaxFree zone companies pay 0% Corporate Tax on qualifying income only if every condition is met. What they are, and what happens if one is missed.
Business SetupMainland or free zone shapes where you can trade, how many visas you get and how you are taxed. Five questions that make the choice clearer.
Business SetupMost mainland activities can now be fully foreign-owned. What the Commercial Companies Law changes mean for new and existing businesses.
Consultation
Tell us a little about your business and what you need. We will come back to you to arrange a conversation, usually by phone or WhatsApp.
We will be in touch shortly. If it is urgent, call or WhatsApp us on +971 52 127 6956.