Global Partner. Integrated Solutions.
Frequently Asked Questions (FAQs)
Frequently Asked Questions (FAQs)
The UAE is focused on economic diversification, moving beyond traditional oil reliance, and establishing itself as a pivotal global business hub.
- Key Initiatives: The Dubai Economic Agenda (D33) aims to double the size of Dubai’s economy over the next decade and consolidate its position among the top three global cities, encompassing 100 transformational projects. The "We the UAE 2031" vision targets doubling Foreign Direct Investment (FDI) flows to AED 240 billion annually and tripling FDI stock by 2031.
- Economic Strength: The GDP was estimated at USD 527.8 billion in 2024, with projections for 2025 suggesting an increase to USD 550.2 billion. FDI inflows reached USD 30.688 billion in 2023, positioning the UAE as the second-largest global recipient.
- Competitive Advantages: These include a strategic location at the crossroads of Europe, Asia, and Africa, world-class infrastructure, a business-friendly ecosystem, and a lack of exchange control restrictions, enabling seamless cross-border trade and capital repatriation.
Corporate entities can be established in the Mainland (Onshore) or within a designated Free Zone (FZ).
| Feature | Mainland (Onshore) | Free Trade Zones (FZs) |
|---|---|---|
| Regulation | Regulated by the respective emirate's Department of Economic Development (DED). | Governed by their own regulatory authority and specific rules. |
| Foreign Ownership | 100% foreign ownership is permitted in most mainland sectors (over 1,000), eliminating the 51% local ownership requirement. | 100% foreign ownership is a standard feature and major incentive. |
| Operations Scope | Entities can operate across the entire country without jurisdictional restrictions. | Operations are generally restricted to within the free zone or internationally. Dual licensing may permit mainland presence subject to DED license. |
| Corporate Tax (CT) | Standard CT rates apply (9% on income exceeding AED 375,000). | Qualifying Free Zone Persons (QFZPs) benefit from a 0% CT rate on Qualifying Income. |
The UAE utilizes a hybrid legal system combining civil law principles with elements of Islamic Sharia.
- Financial Free Zones: The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) are notable exceptions, operating distinct common law jurisdictions based on English common law.
- Dispute Resolution: Commercial disputes often rely on arbitration, governed by Federal Law No. 6 of 2018. The UAE is a signatory to the New York Convention (since 2006), ensuring the enforcement of foreign arbitral awards.
The Dubai Land Department (DLD) and the Real Estate Regulatory Agency (RERA) regulate the market. Recent regulatory updates in 2025 include:
- Freehold Expansion: Freehold ownership zones were expanded to include areas like Dubai South, Al Wasl, and Meydan, allowing 100% foreign property ownership in these designated zones.
- Rental Index: RERA replaced the traditional rental calculator with an AI-powered Smart Rental Index Calculator to provide real-time, data-driven rental benchmarks.
- Rent Increase Caps: Increases are strictly regulated based on how far the current rent is below the market average, ranging from 0% (if less than 10% below market) up to 20% (if more than 40% below market).
- Residency Linkage: Property investment of AED 750,000 qualifies for a 2-year investor visa, while AED 2 million or more qualifies for the 10-year Golden Visa.
The UAE tax regime includes federal Corporate Tax, Value Added Tax (VAT), and various other levies.
| Tax Type | Rate | Key Details |
|---|---|---|
| Federal Corporate Tax (CT) | Standard rate: 9% on taxable income > AED 375,000. | Effective from June 1, 2023. Small business relief is available for revenue < AED 3 million. |
| Qualifying Free Zone CT | 0% on Qualifying Income | Requires adequate substance, audited financial statements, and compliance with the Arm’s Length Principle (ALP). |
| Value Added Tax (VAT) | 5% standard rate. | Applied on the supply of goods and services. Mandatory registration threshold is AED 375,000. |
| Excise Tax | 50% or 100%. | Levied on specific goods harmful to health or the environment (e.g., 50% on sweetened drinks, 100% on tobacco and energy drinks). |
TP documentation is required to demonstrate that transactions between related parties adhere to the Arm’s Length Principle (ALP).
- Disclosure Form (TPDF): Required if the aggregate value of all transactions with related parties exceeds the primary threshold of AED 40 million.
- Master File (MF) and Local File (LF): Required if the Taxable Person is part of a Multinational Enterprise (MNE) group with total consolidated revenue of AED 3.15 billion or more, OR if the taxable person’s revenue is AED 200 million or more.
- Country-by-Country Report (CbCR): Required for MNE groups with consolidated revenues exceeding AED 3.15 billion (approximately EUR 750 million).
Non-compliance carries significant penalties across various regulatory frameworks:
- Data Protection: Under the federal PDPL, fines can reach up to AED 10,000,000 (USD 2.7 million). In ADGM, fines may reach up to USD 28 million, while the DIFC may impose administrative fines up to USD 100,000.
- Anti-Money Laundering (AML): Supervisory Authorities, such as the DFSA, can impose sanctions ranging from warnings and fines (AED 50,000 to AED 500,000) to suspension of activity for up to one month or cancellation of the license/authorization.
- Cybercrime: Federal Decree-Law No. 2 of 2019 on Cybercrime imposes strict penalties, including hefty fines and imprisonment, for offenses like unauthorized access and data breaches.
- Work Permits and Visas: Non-UAE nationals must obtain a work permit and residence visa, usually sponsored by the employer. Standard work visas are typically valid for two years.
- Contracts: All contracts must be fixed-term, and it is common practice to execute both a basic MOHRE/Free Zone template contract and a supplementary, detailed private employment contract.
- Emiratization: Companies with 50 or more employees must increase the proportion of UAE nationals in their workforce by 2% each year, targeting 10% by 2026. Failure to meet quotas results in fines.
- Wages Protection System (WPS): Employers must pay salaries electronically through authorized financial institutions to ensure timely and transparent payments.
- End-of-Service Gratuity: An employee who completes at least one year of continuous service is entitled to a gratuity, calculated at 21 days' wage for each of the first five years and 30 days' wage for subsequent years (capped at two years' total wages, excluding allowances).
The UAE offers several reformed residency options designed to attract and retain global talent:
- Golden Residence (10 years): Granted to investors, entrepreneurs, exceptional talents, scientists, and professionals. For professionals, eligibility requires a specialized degree, classification in the first or second occupational level, and a salary of not less than AED 30,000. For property investors, a minimum investment of AED 2 million is required.
- Green Residence (5 years): Available for skilled professionals and freelancers/self-employed individuals. It requires a bachelor's degree or specialized diploma and, for freelancers, an annual income of at least AED 360,000 over the last two years. This visa provides a longer flexible grace period (up to 6 months) to stay in the country if the permit is cancelled.