How to choose the company type and licence in Dubai

“I want to open a company in Dubai” is six decisions disguised as one: in the UAE there is no such thing as the company, but a menu of figures — each with its licence, its market reach, its cost and its timeline — and choosing the wrong one is the most expensive mistake in the process, because it is discovered late. The good news is that the menu is short and the rules for choosing are clear.

This guide walks through the six company types of Dubai and the UAE — free zone, mainland LLC, offshore, freelance licence, holding and foundation —, explains what each one is for and ends with the question that orders all the others: who you are going to invoice. The full incorporation process, with steps, timelines and costs, is in the guide to setting up a company in Dubai.

The full menu: general map

The operating vehicles: free zone, LLC and freelance

The free zone company is the foreign founder’s workhorse: 100% ownership with no local partner, fast and remote incorporation, and a flexi desk covering the registered-address requirement. Each free zone has its own activity list and rates — choosing the zone well is half the decision, and the free zone guide compares them. Its natural limit is the market: it is designed to invoice abroad and between businesses.

The mainland LLC is the local-market figure: selling to the UAE consumer, opening a shop, clinic or restaurant, and bidding for public contracts. Today it admits 100% foreign ownership in most activities, with costs from USD 12,000 and the emirate’s own office requirements.

The freelance licence is the lightest figure on the menu: an individual permit — not a company — to work in your own name with 100% ownership and access to Emirati residency, processed in 5 to 15 days. Its perimeter is its definition: you, your trade and your clients; with partners, employees or investors, it is time to jump to the company.

The structural vehicles: offshore, holding and foundation

The offshore company is the international company on the menu: it can operate and invoice outside the UAE and is the classic vehicle for holding assets and for international structures. What it does not have is a local licence — unlike the free zone, it does not operate inside the country, obtain visas or invoice the Emirati market. RAK ICC, JAFZA Offshore and Ajman are the usual jurisdictions, with costs from USD 4,500; using it while expecting residency or the local market is the classic textbook mistake.

The holding groups: shareholdings in other companies, real estate, intellectual property. The routes are the free zone holding, the RAK ICC one and the DIFC or ADGM SPV, with the structure up and running in 2 to 20 days depending on the option. And the foundation orders the wealth over the long term — succession planning, asset protection, family governance — with DIFC, ADGM and RAK ICC as the reference frameworks. In serious family structures, holding and foundation usually work together: one owns, the other decides what will happen to what is owned.

How to choose: the question that orders everything

The decision is almost always settled by one question: who do you invoice? Abroad and to businesses → free zone. To the UAE local consumer → mainland LLC. Abroad without needing residency or local presence → the offshore, the international company with no local licence. And if the vehicle only owns → holding or foundation depending on what it owns and what for. And if the one invoicing is you, in your own name → freelance licence. On that base you choose the official activity from the list — which defines what the company can do — and the type of licence; the full map of jurisdictions and emirates is in where to incorporate in the Emirates.

Two nuances that spare you grief: the types combine — the typical mature structure is a holding that owns the free zone operating company — and you can migrate: starting as a freelancer and converting into a company when the project grows is a normal path, not a mistake.

Taxation: common to all types

The tax framework is the same menu for everyone: Corporate Tax at 9% only above AED 375,000 of profit — below that, 0% — and no personal income tax on salaries or dividends. On VAT, a general rate of 5%, with mandatory VAT registration once you exceed AED 375,000 of annual taxable turnover and a possible 0% rate on the export of services under the conditions of the regulations. What changes between figures is not the tax but the operations — what it invoices, where and to whom — and that is why accounting set up well from day one matters more than any comparison table.

Conclusion

Dubai’s company types do not compete with each other: they share out the work. The free zone invoices the world, the LLC sells to the neighbourhood, the offshore and the holding own, the foundation transcends and the freelancer signs with their own name. Choosing well means answering honestly the question of who you invoice — today and in two years — and letting the figure follow the business, not the other way round. With that decision made, the rest — licence, visas, banking — is the well-known three-week script we have already told.