The UAE will continue to be an attractive jurisdiction for company registration in 2025. This will be facilitated by a favourable corporate and tax system, as well as the Emirates’ desire to go beyond traditional associations with natural resources and diversify their economy, including by attracting foreign investments in various sectors.
Positions of the UAE and Dubai in International Rankings
According to the World Investment Report by the United Nations Conference on Trade and Development (UNCTAD), the total inflow of foreign direct investment into the UAE in 2023 amounted to 30.7 billion US dollars.
The interest of foreign investors in the UAE, particularly in Dubai, is largely determined by the country’s positions in international rankings, based on which conclusions can be drawn about the prospects of doing business in the UAE.
Ranking | Positions of the UAE and Dubai in 2024 |
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World Competitiveness Ranking | 7th place out of 67 countries; the UAE’s position improved from 10th place in 2023. |
Economic Freedom of the World | 45th place out of 165 countries (according to the 2024 report based on 2022 data). |
Global Innovation Index | 32nd place among 133 economies. |
Global Financial Centres Index | Dubai ranks 16th out of 121 financial centres worldwide. Abu Dhabi also appears in this ranking at 35th. |
Global Entrepreneurship Monitor | 1st place among 49 economies. |
Thus, the country’s positions in the aforementioned rankings reflect the stable development of the economy and institutional environment, which are aimed at creating favourable conditions for attracting investors.
Prospects for Foreign Investors in the UAE
The UAE continues to actively develop initiatives aimed at attracting foreign capital. The most significant for investors are the following:
Initiative | Significance for Entrepreneurs |
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Opportunity for 100% Foreign Ownership of a Company in the UAE | Foreign investors can own 100% of the shares of a company registered in the UAE, without the need to involve a UAE national partner, except for certain sectors and specific activities of strategic importance, which are subject to separate rules. |
Tax Regime | The UAE maintains a favourable tax regime for companies and businesses, supported by a relatively straightforward tax system and a low corporate tax rate. In addition, individual income in the UAE is not taxed, including salaries and investment income. |
Free Zones |
The UAE has a well-developed system of free economic zones, each providing additional benefits for foreign investors, such as:
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Possibility of Obtaining a Resident Visa | Establishing a business in the UAE allows the foreign investor to become a UAE resident. This means obtaining a resident visa for long-term living and travelling within the UAE. |
Additionally, the advantages of the UAE for company registration include:
- No foreign exchange control requirements
- Advantageous strategic location
- Developed business infrastructure
- Stable and reliable banking system
Features of Company Types in the UAE
In the UAE, it is possible to establish a company of one of the following types, depending on the territories in which it will conduct its activities:
- Local companies
- Free Zone companies
- Offshore companies
The key features of these types of companies are presented in the table below.
Type of Company | Features |
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Mainland Companies |
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UAE Free Zone Companies |
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Offshore Companies in the UAE |
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A common requirement for all companies in the UAE is the possession of a business licence, which is a type of permit to conduct activities. Licences are issued by the Departments of Economic Development of the respective emirates or by the governing authorities of the free zones.
Thus, important criteria for choosing the type of company in the UAE include, in particular:
- Territory of operation
- Simplicity of the registration procedure
- Taxation features
- Need to obtain a resident visa
- Company’s status as a UAE resident
Modern Trends in the Regulation of Companies in the UAE
Register of Beneficial Owners
As part of measures to enhance the transparency of corporate structures, the UAE is introducing a requirement to disclose information about companies’ beneficial owners. This obligation applies to all companies that obtain a licence in the UAE, including those in free zones (with certain exceptions).
The following information must be collected regarding beneficial owners:
- Identification details (full name, nationality, date and place of birth)
- Residential address and address for notifications
- Identity document details
- The basis and date on which the person became a beneficial owner of the company
- The date on which the person ceased to be a beneficial owner of the company
This information must be submitted to the Registrar of Companies within 60 days of the company’s registration and obtaining its licence. However, access to information about beneficial owners is not public and may only be available to government authorities for the purposes of combating violations, as well as within the framework of international agreements involving the UAE.
Economic Substance in the UAE
An important change in 2024 is the abolition of the requirement to ensure economic substance within the UAE. This innovation is primarily associated with the introduction of a corporate taxation regime in the UAE. It significantly reduces the administrative burden on companies, as there is no longer a need to report on economic substance.
Nevertheless, it should be noted that in some cases, companies will still need to ensure the necessary level of presence. For example, to benefit from the zero corporate tax rate on profits, a company registered in a Free Zone must be a “qualified resident” of the Free Zone, which implies, among other characteristics, maintaining a sufficient level of presence in the UAE.
Procedure for Company Registration in the UAE
To register both local companies and Free Zone companies, the following steps must be taken:
- Determine the nature of commercial activities, as the type of licence received will depend on this.
- Decide on the type and legal form of the company, as well as its shareholders and management personnel.
- Choose a name and check its availability and compliance with requirements.
- Obtain initial approval—confirmation that the UAE government has no objections to the establishment of the specific business in the country.
- Prepare the company’s founding documents (Memorandum and Articles of Association).
- Select the company’s office location.
- Obtain additional permits, if they are required for conducting specific activities.
- Submit the necessary documents and pay the fees.
Company registration takes up to five working days.
Registration of an offshore company involves the same steps. Additionally, an offshore company must have a registered agent in the UAE.
Opening a Bank Account for Companies in the UAE
Banks in the UAE primarily work with UAE residents—that is, local companies and Free Zone companies. Opening an account for offshore companies in the UAE will be significantly more challenging, despite the absence of a direct prohibition on opening such accounts in local banks.
Moreover, it is important to consider current realities and the sanctions imposed against Russia. Although the UAE is not considered an unfriendly country towards Russia, UAE banks are reluctant to service companies whose beneficiaries, shareholders, or directors are Russian citizens.
You can familiarise yourself with the main banks in the UAE and Dubai, as well as the products and services they offer, in our material.
Conclusion
Thus, the UAE offers quite favourable prospects for foreign entrepreneurs wishing to establish their presence in the region. It is possible to register various types of companies in the UAE, depending on the territory of operation. However, it is essential to consider certain features of company taxation, their reporting obligations, and the opening of bank accounts for them. Business setup consultants can help you handle these procedures by ensuring full compliance with UAE legislation.
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