There are many reasons for setting up a business in the United Arab Emirates (UAE), whether as a private individual wanting to live and work where others go on holiday or as an entrepreneur wanting to take advantage of the many benefits the country has to offer.

We will be happy to advise you individually on which form is the most suitable for you. For a better overview please refer to the following examples as well as to the detailed presentation of the company forms.


Example 1

FreeZone Company without Visa

Mr. X owns several companies in Germany and would like to set up a company form in Dubai comparable to a holding company for them. He does not plan to do business with companies in Dubai or the other emirates with this company and does not want to move his residence to Dubai. He does not need a bank account. The company serves the sole purpose of a holding company.

Example 2

FreeZone company with one visa

Ms. Y runs an online agency and exclusively serves international clients outside the Emirates with this company. Since she can conduct her business from anywhere Ms. Kunert wants to move her company and possibly her residence to Dubai but does not plan to service clients in the UAE. A bank account is absolutely necessary.

Example 3

Mainland LLC or Professional License

Mainland LLC or Professional License
Mr. and Mrs. Z are in the textile business. They are now planning to set up a business in Dubai to sell their products there directly to customers in the UAE. A bank account is absolutely necessary.



This form of company is currently still offered by many agencies. However since it is practically impossible to obtain a bank account for an offshore company this form of company can usually be ruled out from the outset.

Should you nevertheless decide to use this type of company, please note the following:

  1. no visa authorization
  2. no business relations with companies within the UAE


This type of company is intended for companies that wish to take advantage of the UAE tax benefits but do not plan to do business with customers within the UAE.

Freezone companies offer many advantages:

  • No corporate income tax
  • No withholding tax on outbound dividends
  • No income tax if resident in UAE
  • 100% owned by you
  • Limited visa eligibility
  • No business relations with UAE companies

In Dubai there are over 27 Freezones (Free Trade Zones) where foreign companies can locate accordingly. Which free zone is the right one basically depends on your field of activity.

Free Zones in Dubai

Dubai Airport Free Zone (DAFZA)
Dubai Auto Zone (DAZ)
Dubai Cars and Automotive Zone (DUCAMZ)
Dubai Design District
Dubai Flower Centre
Dubai Gold and Diamond Park (GDP)
Dubai Healthcare City (DHCC)
Dubai International Academic City (DIAC)
Dubai International Financial Centre (DIFC)
Dubai Internet City (DIC)
Dubai Knowledge Park (DKP)
Dubai Logistics City (DLC)
Dubai Maritime City Authority (DMCA)
Dubai Media City (DMC)

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Dubai Multi Commodities Centre (DMCC)
Dubai Outsource City (DOC)
Dubai Production City (DPC)
Dubai Science Park (DSP)
Dubai Silicon Oasis (DSOA)
Dubai Studio City (DSC)
Dubai Textile City (TEXMAS)
Dubai – the Energy and Environment Park (ENPARK)
International Freezone Authority (IFZA)
International Humanitarian City (IHC)
Jebel Ali Free Zone Authority (JAFZA)
Jumeirah Lakes Towers Free Zone (JLT Freezone)
National Industrial Park (NIP)


Probably the most popular and common form of company is the Mainland LLC, Limited Liability Company. An LLC is comparable to a GmbH in Germany or Austria i.e. the company consists of at least one or more partners. An Emirati partner is required who holds 51% of the shares.

The partners can be private persons as well as foreign companies and a managing director or director authorized to sign is required. There is also the possibility of a mainland company with a local service agent (100% ownership).


  • No corporate tax
  • 100% ownership possible
  • No withholding tax on outbound dividends
  • No income tax if resident in UAE
  • No share capital deposit required
  • Unlimited visa privileges
  • Better image with banks and business partners
  • Business relations with all Emirati and GCC companies
  • Incorporation time: approx. 1 week

There are 3 ways to establish a mainland company in Dubai or Abu Dhabi. There is no need to pay in share capital.

1st variant: Mainland company with local partner

The most common company model so far is an LLC with a local partner. This partner officially holds 51% of the company shares in the business license. There is also the possibility to conclude an additional contract in which it is stated that you own 100% of the company shares. The owner is not personally liable. The Local Partner receives a fixed, pre-agreed, annual remuneration and has no access to bank account or other internals of your company.

2nd variant: Mainland company – 100% ownership with Local Service Agent

In this case the company remains 100% owned but a so-called Local Service Agent is appointed in advance. If there is only one shareholder then it is a Professional License. If several partners are involved then one speaks of a Civil Company. The company form is comparable to a German GbR therefore the owner is liable. The Local Service Agent receives an annual, previously agreed remuneration. There are no further costs or obligations.

3rd variant: Mainland company – 100% ownership without Local Service Agent

Since recently there are some profound changes regarding the LLC. Previously each company required a so-called Local Sponsor or Local Service Agent i.e. a domestic business partner. In August 2019 these regulations were relaxed and the Foreign direct investment (FDI) approved a so-called “positive list” of activities that can be 100% foreign owned. However there are strict requirements for most activities and sectors an Emirati partner remains required. Nevertheless this can again be solved with a Local Service Agent Agreement (see above).

We must point out that it is very difficult and costly to do without a Local Partner or Local Service Agent as the requirements in this regard are very high. We therefore advise the 1st or 2nd option.
Sectors that require a local sponsor include oil and gas, road and air transport, post and telecommunications, banking and finance, fishing and some other activities especially in the medical field.
Below is an overview of the sectors where a Local Partner or Service Agent is no longer required.

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The Positive List contains 122 economic activities in three sectors.

  1. agriculture (19 activities)
  2. industry (51 activities)
  3. services (52 activities)


The 19 agricultural activities (e.g. growing fruits, vegetables, grains) are subject to the following provisions:

All but one activity requires a minimum capital of AED 7.5 million (approximately EUR 1.8 million). Companies must join the Emiratization Partners Club.* The use of modern technology in the production process is mandatory.


The 51 industry activities are subject to the following conditions:

The minimum capital required varies from AED 15 million to AED 100 million (approximately EUR 3.75 million to EUR 25 million). Companies must join the Emiratisation Partners Club.*

The use of modern technology in the production process is mandatory.
The positive list distinguishes between light and heavy industry. Generally light industry activities (e.g. garment manufacturing, leather product manufacturing, pharmaceutical product manufacturing, aircraft maintenance and repair, aircraft engine maintenance and repair, ship maintenance and repair, ship engine maintenance and repair) require a lower registered capital of AED 15 mil.

Heavy industrial activities (e.g. manufacture of motor vehicles, trailers and semi-trailers, construction of merchant vessels, manufacture of marine parts and floating structures, construction of floating or submerged drilling platforms, construction of floating structures) generally require a higher registered capital of AED 100 mil.


The positive list contains 52 service activities

  • Civil engineering, electricity, sanitation, demolition and site preparation, building construction, rental of construction and demolition machinery and construction equipment (limited to infrastructure projects such as airports, highways and sports facilities with a value of AED 450 mil and other construction activities)

  • Education services (pre-school, primary, secondary and higher education)

  • Hotel and restaurant management

Some of the service activities require a registered capital of AED 100 million (approximately €25 million).

The question arises as to whether all these activities are also compatible with a company share of 100 percent. This question cannot be answered conclusively as the percentage of ownership allowed for each activity has not been disclosed to the public.

The positive list does not contain any restrictions on share ownership. However it is expected that some of the above activities will still require a minimum Emirati partner ownership of approximately 30%. In addition the level of foreign ownership depends on the Emirate and its respective laws.

What are the requirements to obtain a permit?

The conditions for obtaining a permit to establish a company with 100% foreign ownership are in Art.10 FDI Law. The conditions depend solely on the local regulations of each emirate.

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The newly approved FDI Law contains both a positive and negative list. The negative list includes the following activities and sectors:

  • Oil Exploration and Production
  • Investigation, security, military (including production of military weapons, explosives, clothing and equipment)
  • Banking and financial activities
  • Insurance institutions
  • Pilgrimage and Umrah services
  • Certain recruitment activities
  • Water and electricity supply
  • Fishing and related services
  • Postal, telecommunications and other audiovisual services
  • Road and air transportation
  • Printing and publishing
  • Trade agency
  • Medical retail (including pharmacies)
  • Blood banks

* The Emiratization Partners Club is an initiative launched in 2017 by the Ministry of Human Resources and Emiratization (MOHRE).

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