Frequently Asked Questions

All UAE businesses, whether mainland, Free Zone, or offshore, that are juridical persons (companies) must register for corporate tax with the FTA. Natural persons conducting business in the UAE with revenue above AED 1,000,000 in a calendar year must also register. Registration is mandatory regardless of whether the business is profitable or expects to owe any CT.

The standard UAE corporate tax rate is 9% on taxable income above AED 375,000. Taxable income below AED 375,000 is taxed at 0%. Free Zone businesses that qualify as Qualified Free Zone Persons (QFZPs) may benefit from a 0% rate on their qualifying income. A 15% rate applies to large multinationals in scope for the OECD Pillar Two rules (global minimum tax).

The CT return is due within 9 months of the end of the company’s financial year. For a company with a 31 December financial year-end, the CT return is due by 30 September of the following year. The CT return and any tax due must be submitted and paid through the EmaraTax portal.

Small Business Relief (SBR) allows eligible UAE businesses to elect to be treated as having no taxable income for a tax period, simplifying compliance and eliminating CT liability. To qualify, the business must have revenue below AED 3,000,000 in the relevant tax period and in all prior tax periods from 1 June 2023. SBR is not available to Free Zone businesses claiming the QFZP 0% rate or to members of a multinational enterprise group.

The standard UAE VAT rate is 5%. A 0% rate applies to certain supplies including exports of goods and services, international transportation, certain educational and healthcare services, and supplies within designated Free Zones that qualify as Designated Zones under the VAT legislation. Certain other supplies are exempt from VAT, including bare land, residential property (except first supply), and certain financial services.

Mandatory VAT registration is required when a business’s taxable supplies and imports exceed AED 375,000 over the previous 12 months, or are expected to exceed AED 375,000 in the next 30 days. Voluntary registration is available for businesses with taxable supplies or expenses above AED 187,500. Failure to register when required carries a penalty of AED 20,000.

Most UAE businesses file VAT returns quarterly, within 28 days of the end of each quarter. Businesses with annual taxable supplies above AED 150,000,000 may be assigned a monthly filing period. VAT returns are filed through the EmaraTax portal, and any VAT due must be paid at the same time as the return is submitted.

VAT-registered businesses must retain all tax invoices issued and received, import and export records, accounting records, and VAT return workings for a minimum of 5 years (10 years for real estate-related records). Records must be available to the FTA on request and must be sufficient to allow the FTA to verify the accuracy of VAT returns.

Yes, in most sectors. The UAE Commercial Companies Law was amended in 2021 to allow 100% foreign ownership on the UAE mainland for the majority of business activities. Certain strategic and regulated sectors retain Emirati ownership requirements. ZAMA confirms the ownership structure available for your specific business activity before formation.

A mainland company can trade anywhere in the UAE, including government contracts and retail, under the relevant Department of Economic Development. A Free Zone company operates under its Free Zone’s regulatory framework and may face restrictions on direct mainland UAE trading. Free Zone companies can qualify for the 0% QFZP corporate tax rate on qualifying income. See our full comparison page for a detailed breakdown.

Free Zone companies with simple activity profiles can be set up in 3 to 7 working days in many jurisdictions. Mainland LLCs typically take 2 to 4 weeks. Offshore companies can be incorporated in 2 to 5 working days. Timelines depend on the specific Free Zone or licensing authority, the business activity, documentation completeness, and any additional regulatory approvals required.

Yes. The UAE Commercial Companies Law requires all companies to maintain proper books of accounts. Free Zone companies must additionally prepare audited financial statements annually for licence renewal. Under UAE corporate tax law, all taxable persons must maintain financial records sufficient to determine their CT liability for a minimum of 7 years.

All UAE Free Zone companies are required to submit audited financial statements annually. Mainland companies are required to appoint an auditor under the Commercial Companies Law. Banks require audited financials for lending. In practice, the majority of UAE businesses above a minimal size need an external audit for at least one of these reasons. ZAMA prepares audit-ready financial statements and coordinates with licensed auditors on your behalf.

ZAMA prepares all financial statements to International Financial Reporting Standards (IFRS), the standard required by UAE Free Zone authorities, banks, and regulators, and the basis on which UAE corporate tax liability is determined.

Yes. Economic Substance Regulations apply to UAE entities, both Free Zone and mainland, that conduct one or more Relevant Activities. If your Free Zone company conducts a Relevant Activity, it must file an annual ESR notification and, where applicable, an ESR report demonstrating that it meets the substance tests. ZAMA assesses your ESR position and manages your annual filings.

The Ultimate Beneficial Owner register is a record of the natural person or persons who ultimately own or control a UAE company, typically individuals with 25% or more ownership or voting rights, or who otherwise exercise effective control. UAE mainland companies must maintain and file a UBO register with the relevant licensing authority. ZAMA manages UBO compliance for its clients, including identification of beneficial owners in complex ownership structures.