Key facts
- Corporate tax
- 0% up to AED 375,000 of taxable income, 9% above
- Qualifying free zone companies
- 0% on qualifying income, 9% on the rest
- Small business relief
- Revenue up to AED 3 million, tax periods ending by 31 December 2029
- Personal income tax
- None on salaries, dividends or personal investments
- VAT
- 5%
- Golden visa
- Property worth AED 2 million or more
Why Dubai attracts business owners
The UAE does not tax individuals on salaries, dividends, interest or personal investments. For an owner who moves there, that means the money the company pays out reaches them without a second layer of tax. Add a corporate tax that starts at 0% and tops out at 9%, a business-friendly administration and direct flights to almost everywhere, and you understand why so many founders look at Dubai first.
What has changed is that Dubai is no longer a place where you can simply register a company and pay nothing. Since 2023 there is federal corporate tax, the rules on free zones are demanding, and banks and tax authorities in your home country look closely at substance.
How companies are taxed in the UAE
| Company profile | Tax on profit |
|---|---|
| Taxable income up to AED 375,000 | 0% |
| Taxable income above AED 375,000 | 9% on the part above |
| Qualifying free zone person, qualifying income | 0% |
| Qualifying free zone person, non-qualifying income | 9% |
| Revenue up to AED 3 million, electing small business relief | No taxable income (tax periods ending by 31 December 2029) |
| Groups with global revenue of €750 million or more | Domestic minimum top-up tax to 15% |
AED 375,000 is roughly €87,000. Every company must register for corporate tax and file a return, even when it pays nothing.
The qualifying free zone person
A free zone company only pays 0% if it qualifies. It must earn qualifying income, keep adequate substance in the UAE, follow transfer pricing rules, prepare audited financial statements and not elect for the standard regime. Its non-qualifying income must stay below the lower of 5% of revenue or AED 5 million. Break that limit and the company can lose the 0% rate for years.
Small business relief
If your revenue is AED 3 million or less, you can elect to be treated as having no taxable income. The relief covers tax periods ending on or before 31 December 2029, after the extension approved in August 2026, and it is not available to qualifying free zone persons or members of large groups.
Free zone or mainland
| Mainland | Free zone | |
|---|---|---|
| Where you can sell | Anywhere in the UAE and abroad | Inside the zone and abroad; mainland sales are limited |
| Foreign ownership | 100% for most activities | 100% |
| Corporate tax | 0% / 9% | 0% on qualifying income if you qualify |
| Typical fit | Retail, services to UAE clients, government contracts | Trading, consulting, holding and international services |
The decision is not about the licence price. It is about who your clients are. A consultancy that invoices clients in Europe often fits a free zone. A business that sells to UAE consumers needs the mainland.
How you are taxed as the owner
As an individual living in the UAE you pay no income tax on your salary, dividends from your company, interest or capital gains on your personal investments. The exception is running a business in your own name rather than through a company: once that business's turnover exceeds AED 1 million a year, it falls within corporate tax.
To benefit, you need to be UAE tax resident and, above all, stop being tax resident in your home country. Read how UAE tax residency works.
Setting up the company, step by step
- Define the activity and the jurisdiction. The licence must match what you actually do, and the authority depends on mainland or free zone.
- Reserve the trade name and obtain initial approval.
- Secure premises: an office or flexi-desk, depending on the authority.
- Get the licence, the establishment card and the visas for you and your staff, followed by the Emirates ID.
- Register for corporate tax with the Federal Tax Authority, and for VAT if taxable supplies exceed AED 375,000 a year.
- Open the bank account. This is often the slowest step: banks want to see a real business, a business plan and the origin of the funds.
A free zone licence can be issued in days. With visas, Emirates ID and a bank account, count on several weeks to a few months.
Residency and the golden visa
The company licence lets you sponsor your own residence visa. For a longer-term option, the UAE golden visa is available to property investors from AED 2 million, among other categories, and lets you sponsor your spouse and children. Dubai property purchases can follow the Dubai Land Department route to the golden visa.
Before you move: what to check at home
- Exit tax: your country may tax the unrealised gains on your shares when you leave. See our exit tax guide.
- Controlled foreign company rules: if you stay resident at home, your country can tax the Dubai company's profits in your hands, especially passive income.
- The treaty between your country and the UAE, and whether your country treats the UAE as a low-tax jurisdiction.
- Where the company is really managed: if you run it from home, it may be considered resident there.
Not sure whether Dubai or Cyprus fits you better? Read our Cyprus vs Dubai comparison.
Frequently asked questions
Is Dubai still tax free for companies?
No longer completely. Since June 2023 the UAE levies federal corporate tax: 0% on the first AED 375,000 of taxable income and 9% above. Qualifying free zone companies pay 0% on qualifying income. Individuals still pay no income tax on salaries, dividends or personal investments.
Free zone or mainland: which one should I choose?
A mainland company can sell anywhere in the UAE, including to consumers and the government. A free zone company is ideal for international business and can pay 0% on qualifying income, but its sales to the UAE mainland are limited and may be taxed at 9%. The right choice depends on where your clients are.
Do I have to live in Dubai to have a company there?
No, but if you manage it from your home country, that country may consider the company resident there or tax its profits through its controlled foreign company rules. To benefit fully, the company needs real management in the UAE, and usually the owner does too.
How do I become a UAE tax resident?
You are tax resident if your usual residence and centre of interests are in the UAE, if you spend 183 days there in 12 months, or if you spend 90 days and are a UAE citizen, UAE resident or GCC national with a permanent home, a job or a business there. The Federal Tax Authority issues tax residency certificates.
What is the small business relief?
UAE resident businesses with revenue of AED 3 million or less can elect to be treated as having no taxable income, for tax periods ending on or before 31 December 2029 (extended in August 2026 by Ministerial Decision No. 131 of 2026). Qualifying free zone persons and members of large multinational groups cannot use it.
Official sources and references
- UAE Ministry of Finance: Ministerial Decision No. 131 of 2026 on small business relief
- Khaleej Times: UAE extends corporate tax relief for small businesses until 2029 (August 2026)
- Deloitte Middle East: Ministerial Decision on small business relief
- Meydan Free Zone: corporate tax exemptions and QFZP conditions (2026)
- DLA Piper: UAE domestic minimum top-up tax from 1 January 2025
- Taylor Wessing: understanding tax residency in the UAE (December 2025)
- UAE Government portal: golden visa
Figures reviewed on the date shown above. Rules change: always check the source.
This guide is general information, not tax or legal advice. Every case needs individual analysis.