Key Highlights

• Pay 0% personal income tax and only 9% corporate tax on profits exceeding AED 375,000, as per UAE Federal Tax Authority regulations.
• Register your Dubai free zone company with license issuance in 3-5 working days, though full setup, including visas, typically takes 6-8 weeks depending on documentation.
• Free zone setup packages typically range from AED 15,000 to 50,000 for Year 1, varying by jurisdiction and business activity.
• The UAE attracted AED 167.6 billion in FDI in 2024, offering a GMT+4 timezone advantage and connectivity to European, Asian, and African markets through 240+ flight destinations.

Moving your business to Dubai is not just about escaping tax. It is about strategic positioning. In 2024, over 2,500 UK companies registered in Dubai, representing a 14.2% increase from the previous year. 

The total number of British firms operating in the UAE now exceeds 5,000. These entrepreneurs are not chasing a loophole. They are building global businesses from a jurisdiction that actively supports growth.​

This guide answers the burning questions you have been googling. Can you actually move your business to Dubai tax-free? What is the realistic timeline and cost? What happens with HMRC? You will get the complete process, covering strategic planning, legal setup, financial investment, and tax compliance.  

Keep reading the article to learn more. 

Disclaimer: This article provides general information about UAE company formation and does not constitute legal, tax, or financial advice. All costs, timelines, and regulations mentioned are subject to change by UAE authorities, and readers must verify current requirements with official government sources before proceeding.

Strategic Planning: Understanding Your Starting Position as a UK Citizen

1. Why the UK-UAE Tax Relationship Matters

Before you book that flight to Dubai, you need to understand something critical. Your tax savings depend entirely on your residency status. The UK Statutory Residence Test (SRT) and the UK-UAE Double Taxation Agreement (DTA) determine whether you can genuinely benefit from Dubai’s 0% personal income tax.​

The SRT considers several factors, including the number of days you spend in the UK, whether you have a home, family, or work ties in the UK, and your personal connections. 

If you spend more than 183 days in the UK during the tax year, you are automatically considered a UK tax resident. Even with fewer days, you may still be classified as a resident if other connections are present.​

Here is the key question. Will you become a UAE tax resident (183+ days in UAE) or remain a UK tax resident? This decision shapes your entire tax strategy.​

2. The Central Management and Control Trap

HMRC does not just look at where your company is registered. They care about where strategic decisions are made. This is called the Central Management and Control (CMC) test.​

Under UK tax law, if your board meetings are held in the UK, key contracts are signed in the UK, or directors are residing and working in the UK, HMRC may view your Dubai company as “UK tax resident.” The result? You pay UK corporation tax at 25% on worldwide profits, and your Dubai tax benefits disappear.​

The solution is straightforward but requires commitment. Manage operations physically from the UAE. Hold board meetings in Dubai. Make strategic decisions there. If you remain a UK tax resident while owning a Dubai company, HMRC may negate your tax benefits entirely.​

3. Do You Need to Become a UAE Resident to Set Up a Company?

No, you can set up a Dubai company without becoming a UAE resident. However, the tax benefits require residency. 

To qualify as a UAE tax resident, you must be physically present in the UAE for 183 days or more in a 12-month period. 

Once you meet this requirement, you must apply to the Federal Tax Authority for a UAE Tax Residency Certificate. The FTA will review your application along with supporting documents (entry/exit records, Emirates ID, and proof of income). Once approved and issued, the certificate protects you under the DTA.

Mainland vs Free Zone: The Critical Decision

This is perhaps the most important choice you will make. Dubai offers two primary paths for company formation, and choosing the wrong one can limit your business growth from day one.

1. When to Choose Mainland

Mainland makes sense if your target customers are UAE-based businesses or consumers. Only mainland companies can bid on UAE government contracts, a market worth billions in infrastructure, healthcare, and technology projects. Mainland companies can operate across all seven emirates without restrictions.​

2. When to Choose Free Zone

Free zones are ideal if you operate internationally, work primarily online, or want a flexible office setup. IFZA, DMCC, and Dubai Silicon Oasis are popular choices for UK entrepreneurs. Free zones offer faster registration, often fully remote completion without visiting Dubai, and significantly lower setup costs.​

3. Activity Selection: Over 2,000 Options

Dubai offers over 2,000 approved business activities across all categories, though 100% foreign ownership on the mainland is permitted for 122 activities listed on the Federal Positive List.

Professional License activities (consulting, legal services, and IT consulting) may require a UAE Local Service Agent on the mainland, though this does not involve profit sharing.​

Commercial License activities (trading, retail, and e-commerce) are straightforward with 100% foreign ownership on the Positive List.​

Important note: Your UK professional qualifications may require verification and local registration. Not all UK credentials are automatically recognized in the UAE.​

Legal Setup Process: Step-by-Step for UK Citizens

Stage 1: Document Attestation (UK Leg)

If you are setting up as an individual UK citizen, the process is simple. You will need a passport copy and proof of address.​

However, if a UK corporate entity is the shareholder, your documents must undergo the Attestation Chain:​

1. UK Solicitor/Notary: Certify documents (Certificate of Incorporation, Articles of Association)
2. UK FCDO (Foreign, Commonwealth & Development Office): Apostille documents at £45 per document for standard service​
3. UAE Embassy London: Legalise documents​
4. MOFA (Ministry of Foreign Affairs) UAE: Final attestation​

As of February 2025, the UAE Embassy in London has introduced a Digital Attestation system that replaces traditional paper-based authentication. Documents are scanned and attested digitally, with a PDF version available for download and verification at verify.mofa.gov.ae.​

Timeline: 4-6 weeks for the full chain.​

Stage 2: Trade Name Reservation

Choose a unique name that complies with UAE naming regulations. Names must not contain offensive, religious, or political terms and must not duplicate existing company names.​

Trade name reservations are valid for 6 months. You must complete your business setup within this period or the reservation will be canceled.

You can check availability through the DED online portal (for mainland) or the Free Zone authority website. Submit three name options. The registration fee is AED 620-720 for standard names, with an additional AED 2,000-3,000 if the name includes foreign words.​

Timeline: 1-2 days for approval.​

Stage 3: Initial Approval

Submit your application with:

• Passport copies of all shareholders and managers
• Proof of address for shareholders
• Business plan (for certain regulated activities)​

Timeline: 1-2 days.​

Stage 4: Office Space & Ejari Registration

For mainland companies, you need a physical office (minimum 200 sq ft) with an Ejari-registered lease. Ejari is the government-authorized system that legalizes tenancy contracts. The registration fee is AED 120-220 depending on whether you use the Dubai REST app or a trustee center.

For free zone companies, flexi-desk or virtual office options are available. A flexi-desk costs approximately AED 5,000-15,000 per year.​

Banks will not open accounts without an office address. Your visa quota also depends on office size, with approximately 9 sq m per visa on the mainland.​

Typical Office Costs in 2025:

Stage 5: MOA & Formation Documents

The Memorandum of Association (MOA) outlines your company structure, ownership, and business objectives. For the mainland, this must be notarized. For free zones, digital submission is often acceptable.​

Documents required:

• Completed application form
• MOA/Articles of Association
• Passport pages for all shareholders
• Proof of residential address
• Specimen signatures​

Stage 6: Trade License Issuance

Pay government fees and receive your electronic trade license.

Timeline: 3-5 working days for free zones, 1-2 weeks for mainland.​

Financial Investment & Cost Breakdown

Year 1 Setup Costs: Realistic Estimates

Mainland Company (Small Professional Services):

Free Zone Company (IFZA Example):

DMCC Free Zone:

Hidden Costs Often Missed

• Advisory/Formation Agent Fees: AED 3,000-8,000 (optional but recommended)​
• Accounting/Compliance Services: AED 5,000-15,000​
• Document Translation/Attestation: AED 500-2,000​
• Banking KYC Documentation: Minimal cost but time-intensive​

The Real All-In Cost: Budget AED 25,000-90,000 for Year 1, depending on structure and jurisdiction.​

Disclaimer: All costs are indicative and subject to change. Always verify current pricing with the relevant UAE government authorities or licensed business setup consultants before making financial decisions.

Also Read:Top 10 AI and Tech Businesses to Start in Dubai

Banking: The Critical Operational Step

1. Why Banking Is Challenging for UK Nationals

UAE banks enforce stringent Know-Your-Customer (KYC) and Anti-Money Laundering (AML) compliance. UK nationals face heightened scrutiny due to international financial regulations.​

Common Rejection Reasons:

• Unclear source of funds​
• Insufficient business plan detail​
• Mismatch between trade license activities and business description​
• Flexi-desk address rejected by traditional banks​

2. Documentation Requirements

For a corporate bank account, you will need:​

• Trade license (original and certified copy)
• Memorandum of Association
• Passport and visa copies for all shareholders
• Emirates ID
• 6 months of personal UK bank statements
• Proof of residential address (UAE)
• Business plan detailing operations, revenue model, and client base
• Source of funds declaration

Timeline: 2 days to 2 weeks depending on the bank.​

3. Banking Solutions for UK Entrepreneurs

Traditional Banks (Emirates NBD, FAB, Dubai Islamic Bank):

• Full-service capabilities but slower approvals
• Minimum balance: AED 25,000-200,000​
• Best for established businesses needing comprehensive services

Digital Banks (Wio, Mashreq NeoBiz):

• Faster onboarding (3-7 working days)​
• Designed for startups and international clients
• Lower or zero minimum balance requirements​
• Wio offers a monthly fee of AED 99 with no minimum balance​
• Mashreq NeoBiz offers zero-balance options for select plans​

International Fintech (Wise, Currenxie):

• Temporary solution for initial business receipts
• Not a replacement for full corporate account due to regulatory limitations​

Taxation: Understanding the UAE Corporate Tax Regime

1. UAE Corporate Tax Explained

The UAE introduced a federal corporate tax effective June 1, 2023:​

For large multinationals (global revenue above €750 million), a 15% Domestic Minimum Top-Up Tax (DMTT) applies from January 2025 under the OECD Pillar Two framework.​

2. Free Zone Tax Advantage

Free zone companies can benefit from 0% corporate tax on “Qualifying Income,” which includes:​

• Intellectual property developed in the free zone
• Intercompany transactions within free zones
• Manufacturing, logistics, investment management, aircraft leasing

Non-qualifying income (such as UAE mainland services) is taxed at 9%. To maintain the 0% rate, you must demonstrate adequate substance (office, staff, expenditure), maintain audited financials, and meet transfer pricing requirements.​

3. Small Business Relief

If your annual revenue is AED 3 million or less for tax periods between 2024-2026, you may qualify for Small Business Relief under Article 21 of the UAE Corporate Tax Law. This means no corporate tax liability during that period, although you must still register and file a return with the Federal Tax Authority.​

4. VAT Registration

The standard UAE VAT rate is 5%. Registration is done through the Federal Tax Authority e-Services portal, with processing typically taking 2-3 weeks.​

5. The UK-UAE Double Taxation Agreement

The DTA prevents you from being taxed on the same income in both jurisdictions. However, it only applies if you qualify as a tax resident of one country.​

To qualify for UAE tax residency:

• Physical presence of 183+ days in UAE during a 12-month period​
• Obtain UAE Tax Residency Certificate from FTA​

If you remain a UK tax resident:

• Your Dubai company may be deemed a “UK tax resident” if managed from the UK.
• Subject to UK corporation tax (25%) on worldwide profits​
• DTA benefits lost​

Visa & Immigration Roadmaps

1. Investor/Partner Visa (Standard Path)

This visa is available immediately upon trade license issuance. Tied to your company shareholding.

Duration: 2-3 years, renewable.​

Process:

1. Apply through your company to GDRFA Dubai 
2. Entry permit issuance (1-2 working days)
3. Medical examination (mandatory for all expats)​
4. Biometric registration
5. Emirates ID issuance
6. Visa stamping in passport

Timeline: 1-3 weeks total.​

Benefits:

• Family sponsorship rights (spouse, children)​
• Ability to sponsor employees​

Visa Quota: Depends on office size. Approximately 1 visa per 9 sq m on the mainland. Free zone packages vary.​

2. Golden Visa (5-10 Year Alternative)

The UAE Golden Visa offers long-term residency without a sponsor.​

For Entrepreneurs (5-year visa):

• Own an economic project of technical/future nature worth at least AED 500,000​
• Approval from an auditor confirming project value
• Approval from relevant authority stating the project is technical or innovative
• Approval from a UAE-accredited business incubator​

For Real Estate Investors (5-year visa):

• Own property worth AED 2 million or more​
• Mortgaged properties generally acceptable with bank confirmation​

For Investors in Public Investments (10-year visa):

• Deposit of AED 2 million in a UAE-accredited investment fund​
• No reliance on loans (except UAE bank mortgages with 20% down payment)​

3. Family Sponsorship

Once you hold an Emirates ID, you can sponsor your spouse and children. This requires attested marriage and birth certificates. UK documents must follow the attestation chain.​

Timeline: 2-4 weeks per dependent.
Annual visa cost: Approximately AED 1,500-2,000 per dependent.

Compliance & Ongoing Obligations

Annual Renewals

Trade License Renewal:

• Due annually during your license anniversary month
• Trade License Renewal: AED 12,000-30,000 for mainland, AED 15,000-45,000 for free zones, varying by activity and jurisdiction.

Visa Renewal:

• Every 2-3 years
• Requires medical check, Emirates ID update
• Cost: AED 3,500-5,000 per renewal​

Corporate Tax Filing:

• Annual return due 9 months after financial year-end​
• Requires audited financial statements for most businesses​

Accounting & Audit Requirements

Mainland companies:

• Annual financial audit mandatory (by registered auditor)
• Quarterly VAT filing (if registered)
• Annual corporate tax filing

Free zone companies:

• Audit requirements vary by zone (DMCC requires audit)​
• VAT applies if UAE turnover threshold exceeded​

Audit services cost: AED 3,000-10,000 annually for small businesses.

Ultimate Beneficial Owner (UBO) Declaration

All companies must declare beneficial owners as part of UAE AML compliance. Declaration is made once the license is issued. Updates are required if ownership changes.​

Common Mistakes & How to Avoid Them

Top 10 Pitfalls for UK Entrepreneurs

Rushing the jurisdiction choice: Choosing free zone for a business that needs local market access​

1. Fix: Define target clients upfront. Verify activity restrictions.

Underestimating documentation: Missing notarisation, apostille, or translation steps​

2. Fix: Use a professional setup consultant. Prepare UK documents early.

Wrong activity classification: Registering under the wrong license category​

3. Fix: Check the DED or free zone activity list thoroughly.

Misunderstanding tax residency: Assuming 0% tax applies while remaining UK tax resident​

4. Fix: Commit to UAE residency (183+ days). Track days carefully.

Banking failure: Incomplete KYC documents. Business plan mismatch with license​

5. Fix: Prepare a detailed business plan. Gather 6 months of UK bank statements before applying.

Ignoring VAT threshold: Not registering when AED 375,000 threshold reached​

6. Fix: Monitor annual turnover. Register proactively when approaching the threshold.

Selecting wrong free zone: Registering in a zone not suited to your activity​

7. Fix: Research zone-specific activity lists. Verify banking partnerships.

Office space underestimation: Securing an undersized office. Unable to get additional employee visas​

8. Fix: Plan for 2-year growth. Lease 20-30 sq m even if starting solo.

Overlooking renewals: Missing license renewal date or visa expiry​

9. Fix: Use a compliance calendar. Set phone reminders.

DIY approach without guidance: Attempting the full process alone. Repeated rejections and delays​

10. Fix: Engage a licensed formation consultant. Invest AED 3,000-5,000 for a professional setup.

Timeline & Execution Roadmap

1. Free Zone Timeline (Typical)

2. Mainland Timeline (Typical)

Can you speed this up? Paying for expedited services may reduce the timeline by 1-2 weeks. Cost varies from AED 1,000-3,000.

Frequently Asked Questions

1. Do I need to be physically present in Dubai to start a company?

No for free zones. The entire process can be completed remotely. Mainland may require in-person office visits.​

2. Can I keep my UK business and run a Dubai company?

Yes, but tax implications apply. Ensure separate management structures to avoid Permanent Establishment complications.​

3. What if my visa is rejected?

Rare if documentation is complete. Rejection typically occurs due to incomplete KYC or failed background checks. You can reapply after 30 days.​

4. What’s the real cost to start in the UAE? 

AED 20,000-90,000 for Year 1 depending on mainland vs free zone. Budget conservatively.​

5. Do I need an accountant?

Highly recommended for compliance. Mandatory for audit-required licenses.​

6. Can I apply for a residency visa remotely?

Initial application is possible remotely. Final visa issuance requires in-person medical and biometric registration.​

7. What taxes do I really pay in Dubai?

Corporate tax is 9% (if profit exceeds AED 375,000) and VAT is 5%, but there is no personal income tax.​

8. How do I know if I need a local sponsor?

Check the DED Positive List. Most service businesses now allow 100% foreign ownership. Restricted sectors (oil, defense, banking) still require local partners.​

9. Will my UK qualifications be recognized? 

Depends on activity. Engineering and medical require local registration. Consulting is typically recognized. Verify with the relevant authority.​

Why UK Entrepreneurs Are Choosing Dubai

The numbers tell the story. In 2024, the UAE attracted AED 167.6 billion ($45.6 billion) in foreign direct investment, a 48% increase year-on-year. The UAE ranked 10th globally as a leading destination for inbound FDI, accounting for 37% of all FDI inflows into the Middle East region.​

Dubai recorded 1,826 total announced FDI projects in 2024, marking an 11% increase compared to 2023. The top sectors include software and IT services (11.5%), business services (9.7%), and renewable energy (9.3%).​

For UK entrepreneurs, the combination of financial advantages and lifestyle benefits creates a compelling case. Zero personal income tax. 100% foreign ownership. A 4-hour time zone difference from London that allows you to serve both European and Asian markets. Access to over 3.4 billion consumers across Africa, South Asia, and the Middle East.​

How JSB Incorporation Can Help

Starting a company in Dubai involves navigating multiple government entities, understanding jurisdictional differences, and ensuring compliance with both UAE and UK tax requirements. Making even small mistakes in activity classification, documentation, or banking applications can result in weeks of delays.

Your business deserves a jurisdiction that supports growth instead of strangling it. Dubai offers that environment. The question is not whether to make the move. It is how quickly you can position yourself in the world’s fastest-growing business hub.

Book your free consultation call today with the experts of JSB Incorporation to learn more.