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Company formation

The decisions that are expensive to reverse.

Mainland, free zone or offshore. Legal form, shareholding, activity class. All of it is cheap to get right at the start and costly to change once a bank account and six visas are hanging off it.

3–5 days to reserve and approve 5–10 days to licence 100% foreign ownership, most activities

Start here

One question settles it.

Not cost. Not speed. Not which zone somebody at a networking event recommended. The question is: who receives your invoices?

If the answer is customers outside the UAE, a free zone is almost always right, and the rest of the decision is a comparison of price and credibility among forty-odd options. If the answer is customers inside the UAE, you are looking at a mainland licence, and the free zone brochures on your desk are a distraction that will cost you a distributor agreement to work around.

Everything else — the legal form, the share capital, the office — follows from that. Get it backwards and you spend the second year restructuring the first.

A decision diagram. Who receives your invoices? Customers outside the UAE leads to a free zone licence: full foreign ownership, potential zero per cent qualifying income, no direct domestic sales. Customers inside the UAE leads to a mainland licence: full market access, government tenders, tenancy and Ejari required, nine per cent corporate tax above the threshold. Who receives your invoices? Outside the UAE exports, offshore clients Free zone licence Full foreign ownership · 0% on qualifying income · no direct domestic sales Inside the UAE UAE businesses, consumers, government Mainland licence Whole market · government tenders · tenancy and Ejari · 9% above threshold Both, or unsure free zone now, mainland branch later Sequencing matters — ask before you file
The order the decision is actually made in. Price enters at the very end, once the field has already narrowed.

The three routes

What each one actually gives you.

Free zone

A company incorporated inside a designated economic zone, licensed by that zone's own authority rather than the emirate's economic department. Full foreign ownership has always been available. Customs duty is suspended on goods that enter and leave without touching the domestic market. Qualifying income can be taxed at 0%.

The constraint is real and frequently understated: you may not sell directly to customers in the UAE domestic market. Working around it means appointing a mainland distributor, who takes a margin, or opening a mainland branch, which is a second set of fees doing the job of one.

Mainland

Licensed by the emirate's economic department — DET in Dubai, ADDED in Abu Dhabi, and so on. You can trade with anyone, anywhere in the country, bid for government contracts, open a shop, and hold an unlimited visa quota subject to the floor area you lease.

Since the 2021 amendment to the Commercial Companies Law, the large majority of mainland activities permit 100% foreign ownership. A short strategic-impact list still requires an Emirati partner or a local service agent, and it is worth checking your specific activity against it rather than assuming either way.

Offshore

Not a cheaper free zone. An offshore company — RAK ICC, JAFZA Offshore — holds things. Shares, property where permitted, intellectual property. It has no premises, conducts no business inside the UAE, and sponsors no residence visas at all, including yours.

If somebody has offered you an offshore company as a route to living in Dubai, they have either misunderstood the product or they are hoping that you have.

Structure

Two companies, when one will not do.

Most businesses need one entity. Some need two, and the ones that do usually discover it a year late, when unpicking the first is expensive.

The common pattern is a holding company above one or more operating companies. The holding entity owns the shares, the intellectual property and sometimes the property; the operating entities carry the trading risk, the staff and the contracts. If an operating business is sold, closed or sued, the assets are not sitting inside it.

A structure diagram. A holding company, typically ADGM or RAK ICC, owns the shares and intellectual property. Beneath it sit two operating companies: a free zone entity for export trade and a mainland entity for UAE domestic sales. Holding company ADGM · RAK ICC · DIFC owns shares, IP, property Free zone company export trade, overseas clients 0% on qualifying income Mainland company UAE customers, tenders 9% above AED 375,000 Further entities as needed per market or per venture Transactions between these entities are related-party transactions. They must be priced at arm's length and documented. This is not optional.
The structure is straightforward. The transfer pricing documentation underneath it is the part people forget to budget for.

Two entities cost roughly twice as much to run and require the transactions between them to be priced at arm's length and documented. That is a real annual obligation, not a formality, and it is the reason we talk people out of a holding structure more often than into one.

What we do

The formation itself.

  1. Structure and jurisdiction

    A written recommendation covering legal form, shareholding, activity class and jurisdiction, with the total first-year cost itemised — government fees separated from ours. Before anything is filed.

    2 days

  2. Trade name and initial approval

    Name reserved with the relevant authority, initial approval secured, and the activity list confirmed against what you actually intend to do — which is not always what the first draft said.

    3–5 days

  3. Memorandum and incorporation documents

    Memorandum of association drafted and notarised, shareholder resolutions prepared, passports and proofs attested where the authority requires it. Powers of attorney if you are not here.

    2–4 days

  4. Licence issuance

    Licence issued, establishment card opened and the immigration file registered. From this point the company exists, can contract, and can begin sponsoring residence visas.

    5–10 days

  5. Registrations that follow

    Corporate tax registration, VAT where the threshold is met or voluntary registration makes sense, UBO filing, and the bank introduction. None of these are optional and all of them have dates.

    2–4 weeks

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