Country：阿联酋 · Entity Incorporation
United Arab Emirates · Entity Incorporation
UAE incorporation uses a free-zone company (FZE/FZCO) or a mainland LLC. Since 2021, 1,000+ mainland activities allow 100% foreign ownership with no mandatory local sponsor. Free zones offer 100% foreign ownership, free profit repatriation and 0% CT on qualifying income. Setup is fast (free zone 3–10 days, mainland 7–14 days) with a licence and registered address.
Key points
- Entities: free-zone FZE/FZCO (100% foreign, international business) or mainland LLC (whole-UAE market).
- Foreign ownership: since the 2021 law, most mainland activities allow 100% foreign ownership, removing the mandatory local sponsor.
- Licence types: commercial (trade/import-export), professional (services/consulting), industrial (manufacturing).
- Address: free zones allow virtual office/shared desk; mainland requires a physical Ejari lease.
- No rigid minimum capital (some free zones suggest an amount); capital is flexible.
Procedure
- Select jurisdiction and activity; reserve trade name.
- Submit initial approval to free-zone authority or DED.
- Sign MOA and lease office (Ejari or virtual office).
- Pay fees and collect licence and registration certificate.
- Apply visa quota and open a bank account.
Hard requirements
- Shareholder/director passports; business plan or activity summary.
- Registered address (free-zone virtual or mainland physical).
- Some activities need federal pre-approval (finance/medical/energy).
Costs
Free-zone licence a few thousand to tens of thousands USD/year (incl. virtual office).Mainland requires physical office lease (Ejari).Annual licence renewal and audit.⏱ ⏱ Timeline：Free zone 3–10 days; mainland 7–14 days.⚠ Common risks
- Free-zone company selling directly to mainland → non-qualifying income taxed 9%.
- Mainland physical office cost high.
- Licence activity inconsistent with substance → penalty.
Handbook
📘 Step-by-Step Handbook (with owner / timeline / cost / penalties)
Applies to：Chinese entities establishing an operating entity in the UAE (mainland LLC or free-zone FZE/FZCO); excludes branches/representative offices.
Prerequisites
- Proposed activity confirmed outside the mainland negative list or strategic sectors, or within a free zone's activity list.
- Mainland: confirm whether 100% foreign ownership is allowed (most activities post-2021 Commercial Companies Law amendment); some strategic sectors still need local participation or federal approval.
- Free zone: select the specific authority (DMCC/DIFC/ADGM/JAFZA etc.) and confirm its activity list and ownership rules.
- Shareholder/director passports; if held by a China parent, complete domestic ODI filing before outbound injection (see odi).
- Registered address: mainland needs a physical Ejari lease; free zone may use a virtual office/shared desk (compliant).
| Step | Action | Owner | Timeline | Cost | Official form / system | Notes & penalties |
|---|---|---|---|---|---|---|
| 1 | Determine path and activity (mainland vs free zone) Cross-check the activity list: mainland (whole-UAE market, government tenders) or free zone (100% foreign, 0% qualifying income). Confirm negative-list or strategic-sector limits; regulated finance needs DIFC/ADGM. | Founder / advisor | 1–2 weeks | Internal / advisor | Activity-list cross-check | Penalty：Wrong path → tax (9% non-qualifying) or ownership/licence error |
| 2 | Name reservation and initial approval Mainland: submit name application and initial approval to DET/DED; free zone: submit pre-approval to the authority. Avoid restricted words. | Applicant / agent | 1–5 working days | Name-reservation fee per authority | Name application + initial approval | Penalty：Name conflict or restricted word → rejection delay |
| 3 | Sign MOA/AOA and lease office Mainland: sign MOA and arrange Ejari physical lease; free zone: sign MOA and virtual-office/Flexi-desk lease (must compliantly receive mail). | Applicant / legal | 3–7 days | Lease fee | MOA / AOA; lease | Penalty：False address → bank rejection and licence issues |
| 4 | Pay fees and collect licence and certificate Mainland: DET issues the mainland trade licence; free zone: authority issues FZE/FZCO licence and registration certificate. | Authority | Free zone 3–10 days; mainland 7–14 days | Licence fee (thousands to tens of thousands USD/year per authority) | Licence application | Penalty：Licence activity inconsistent with substance → fine/cancellation |
| 5 | Apply visa quota (if hiring) Mainland: apply to MOHRE/DED; free zone: apply to the authority (usually by office area, e.g. DMCC 1 per 9 m²). | Employer | Days–weeks | Quota-related | Quota application | Penalty：Insufficient quota limits hiring |
| 6 | Open bank account (see banking) Submit KYC to a bank with licence, registration certificate, UBO declaration and business-substance materials (see banking). | Bank | 2–4 weeks | Account fee and min deposit per bank | KYC questionnaire | Penalty：Rejected for opaque UBO or lack of substance |
| 7 | Tax registration (see tax) Within 3 months of entity formation, register CT on EmaraTax (even at 0%); register VAT at the AED 375,000 threshold. | FTA | Within 3 months of formation | Free | EmaraTax CT/VAT registration | Penalty：Late registration fine AED 10,000 (per FTA notice) |
✅ Self-check list
⚠ Common pitfalls
Free-zone company selling directly to mainland影响：Non-qualifying income taxed 9%, may lose 0% status.规避：Free zone only qualifies for qualifying activities and free-zone/foreign transactions; for mainland sales set up a mainland branch or assess de minimis.
Assuming free zone = fully tax-free影响：Ignoring QFZP substance, audit and de-minimis → taxed 9%.规避：Implement economic substance, audited financials, income-class monitoring (see tax).
Mainland virtual address影响：Bank rejects account, licence abnormal.规避：Use a real Ejari physical lease.
Wrong path (regulated finance in a normal free zone)影响：Operating without licence → penalty.规避：Finance → DIFC (DFSA) or ADGM (FSRA) regulated path.
Licence activity inconsistent with substance影响：Fine or cancellation.规避：Choose activity by real business; update licence on change.
Outbound injection without ODI影响：SAFE violation, affects repatriation.规避：China parent completes NDRC/MOFCOM/SAFE ODI first (see odi).
Free-zone cross-mainland operation limited影响：Need a mainland branch, extra cost.规避：Plan operating radius and entity structure early.
📅 Ongoing post-incorporation obligations
- Annual licence renewal.
- Audited financials (QFZP mandatory, see tax).
- CT/VAT filing (see tax).
- Visa renewal and WPS payroll (see employment).
- UBO and economic-substance updates.
🔗 Official portals
📎 Source：Free-zone authorities; Department of Economy & Tourism (DET); Federal Tax Authority (FTA); 2021 Foreign Full Ownership Law
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