From Strategy to Setup – A Foreign Investor’s Roadmap to the UAE

May 16 2025

The United Arab Emirates (UAE) continues to attract international investors looking to establish a presence in one of the world’s most business-friendly and strategically located economies. With its cutting-edge infrastructure, stable regulatory environment, and diverse market access, the UAE is an ideal launchpad for regional and global operations. However, succeeding in this environment requires careful navigation of the legal, financial, and administrative landscape.

Mainland vs Free Zone: Choosing the Right Structure

Investors must begin by choosing between two primary business jurisdictions: mainland and free zone. Mainland companies, licensed by the Department of Economic Development (DED), may operate across the UAE and internationally, and are now eligible for 100% foreign ownership in most sectors following recent reforms.

Free zone entities, on the other hand, are limited to operations within their respective zones or international markets unless working through a mainland distributor. They offer streamlined setup procedures, sector-specific benefits, tax exemptions, and full foreign ownership from the outset. The best choice depends on your industry, client base, and commercial objectives. Although the Emirate of Dubai introduced dual license for free zones companies to be eligible to work in mainland but the implementation of such new regulation is yet to be released.

Taxation: A Changing but Competitive Landscape

In June 2023, the UAE implemented a 9% federal corporate tax on business profits exceeding AED 375,000. Despite this new layer of compliance, the UAE maintains one of the most competitive tax regimes globally. Free zone businesses may still qualify for exemptions, provided they meet economic substance and qualifying income requirements.

VAT is also applicable at a rate of 5%, with mandatory registration for businesses exceeding AED 375,000 in annual taxable revenue. Importantly, the UAE does not impose personal income tax, reinforcing its appeal to entrepreneurs, executives, and high-net-worth individuals.

Licensing and Regulatory Authorities

Understanding the relevant regulatory bodies is essential for setting up and operating legally in the UAE. Mainland companies report to the DED in their Emirate, while each free zone operates under its own regulatory authority, such as the DMCC (for trade and tech), DIFC and ADGM (for finance), and others.

National oversight is provided by the Federal Tax Authority (FTA), which handles VAT and corporate tax registration and compliance. Each authority has its own documentation, rules, and procedures – so investors must align their setup with the correct jurisdiction from the outset.

Banking: Essential, but Complex

Opening a corporate bank account is a crucial milestone for any UAE business, but the process is often rigorous. Strict AML (Anti-Money Laundering) and KYC (Know Your Customer) policies require detailed documentation, including business plans, incorporation certificates, shareholder IDs, and proof of physical presence. With proper preparation, the process can be completed smoothly, but delays are common when requirements are unclear or incomplete.

Residency Through Investment

The UAE offers a variety of investor residency visas, including the standard 2–3-year investor visa and the prestigious 10-year Golden Visa for qualifying individuals. These programs allow business owners to live, work, and access services in the UAE—and to sponsor their families and staff. Residency streamlines operations, simplifies banking, and provides peace of mind for long-term investors.

Partnering for Success

Setting up in the UAE presents tremendous opportunity but also legal and procedural complexity. Every decision, from business structure to regulatory compliance, impacts the long-term success of your venture.

At MIS legal firm, we provide end-to-end support for foreign investors entering the UAE market. From legal consultation on the most suitable corporate structure, business setup and licensing to tax registration through our strategic partners, residency solutions, and corporate governance, our team ensures a seamless transition from strategy to setup. With deep local expertise and a commitment to responsiveness, we’re ready to be your trusted partner on the ground.

Ready to expand into the UAE? Contact us today to schedule a consultation [email protected]