The United Arab Emirates (UAE) is a seven-state federation in the Middle East with a strong economy and high living standards. The UAE has an open economy, and the country’s free trade zone allows for 100% international ownership and zero taxes, which has helped attract global investors. The UAE has also implemented policies that encourage foreign investment through these free trade zones, offering lucrative incentives. The nation, with its wealth, has fueled a rapid development of luxury tourism, renewable energy, and advanced technological innovation.
Unlock growth opportunities in the UAE with Cerity Global as your trusted partner. We offer end-to-end support for establishing your legal entity, navigating the UAE’s often complex regulatory landscape with clarity and efficiency.
From company registration to ongoing back-office support, including HR, payroll, benefits, accounting, tax and compliance, Cerity Global simplifies the process so you can focus on growing your business.
Need to hire quickly before your entity is set up? We offer interim EOR services in the UAE, enabling you to onboard talent fast. Once your entity is established, we ensure a smooth transition of your employees from the EOR Structure to your own legal entity, without disrupting payroll or compliance.
Our experts stay ahead of regulatory changes to keep your operations aligned with the UAE’s employment and tax laws, helping you scale confidently and compliantly.
The most standard type of entity setup in mainland UAE is a limited liability company. LLC is a form of establishment which requires less than 50 shareholders. Each of their liabilities is limited to their shares. LLCs are permitted to conduct any commercial or industrial business.
A branch is a type of entity setup treated as an expansion of the parent company and not as a separate structure. In mainland UAE, a branch requires a resident of the country, or a company wholly owned by residents, to act as a sponsor.
It is also possible to establish an entity in the free zones in the UAE, either as a limited liability company (FZ LLC) or a branch office (FZ Branch).
FZ LLC is a separate and distinct legal entity with limited liability, and there is no restriction on the shareholders’ nationality. Activities are restricted to the free zone in which the company is incorporated and those the company is licensed to perform.
A free zone branch is usually not considered a separate entity and treated as an extension of the parent company.
An LLC requires the shareholders to appoint at least 1 director or manager.
The parent company must appoint 1 general manager.
FZ LLC requires at least 1 manager, secretary, and director, and 1 individual, in certain free zones, may hold the office of a manager, secretary, and director.
The parent company must appoint 1 general manager.
Free zone companies may need a local distributor to operate in the mainland UAE, as they’re restricted to operating within their zone or internationally.
In the UAE, corporate bank account opening requirements vary by bank and entity type. Most banks require a physical presence of authorized signatories, complete documentation, and may have minimum deposit requirements.
Bank Account Setup in the UAE: What’s Possible and When
Before Incorporation:
After Incorporation:
Note:
UAE banks enforce strict compliance standards. Enhanced due diligence may be required for certain nationalities or business activities. Some banks have specific requirements for minimum deposit requirements, and account opening may take typically 2 to 6 weeks depending on the complexity and compliance reviews.
Required documents include the Memorandum of Association (MOA), trade license, shareholder and directors’ passports, Emirates ID/residenct details (if applicable), and office lease agreement.
Cerity Global supports companies in their global expansion plans and helps in legal entity setup, registration and ongoing support services. With us, you can quickly set up a legal entity, operate compliantly, and expand globally. The process typically takes a few days to a week, depending on the bank.
The UAE Labour Law, Federal Decree Law No. 33 of 2021, regulates employment in the UAE. Employment contracts must be written and registered with the Ministry of Human Resources and Emiratisation (MOHRE).
Some of the standard details mentioned in the written contract include:
The different types of employment relationships are:
Permanent Employment
Also known as unlimited-term contracts and indefinite contracts, these types of contracts do not have any specific duration and are effective until the agreement is terminated by either the employer or the employee.
Fixed-Term Contract
Also known as a limited–term employment agreement, this type of contract stipulates the start and end dates of the employment period. A fixed-term contract can last up to two years (can be renewed by mutual agreement).
Part-Term Contract
A part-time contract is one where an individual is employed by more than one employer for specific hours or number of days for a specific project.
In UAE, a probationary period typically cannot exceed 6 months.
The regular working hours in UAE are typically 8 hours per day and 48 hours per week.
Overtime
Overtime cannot exceed 2 hours per day. However, if the nature of a job requires the worker to work beyond the standard work hours, then they are entitled to additional pay.
A standard notice period of 30 days is applicable.
If an employer or employee terminates the employment agreement during the probation period, a written notice period of 14 days is applicable.
Employees are entitled to receive severance pay when they complete one or more years of service. The pay is equivalent to the pay of fourteen days for each year of service.
The UAE offers various visa categories for foreign nationals to live and work, including employment visas, investor visas, and the new Golden Visa program for long-term residence.
Work Visa & Permit Options in the UAE
1. Employment Visa
Ideal for foreign nationals employed by UAE employers.
2. Golden Visa
Long-term residence visa for investors, entrepreneurs, and skilled professionals.
3. Freelancer Visa
Allows professionals to work independently in specific free zones.
4. Investor Visa
For foreign investors establishing businesses in the UAE.
Key Notes:
Per UAE’s labor law, employees receive a fully paid annual leave of:
In the UAE, female employees receive maternity leave for 60 days, of which:
If she has an illness due to pregnancy or childbirth and is unable to resume her duties, she may take an additional 45 days of leave without pay.
Furthermore, if upon birth the baby suffers a disability or is sick, she may take additional leave of 30 fully paid days, which can again be extended for another 30 days without pay.
Male employees receive a paid leave of 5 working days which can be taken within six months of the delivery.
An employee receives sick leave of up to 90 days per year, after the end of a probation period divided as:
The following statutory national holidays are observed in the UAE:
Islamic holidays are according to moon sighting.
The payroll frequency is usually monthly, and employees are typically paid by the end of the month.
While the UAE labor law does not mandate any 13th month pay, many employers provide a performance-based bonus or additional payment during the Islamic holidays. These payments are usually discretionary and depend upon contractual agreements or company policies.
The UAE labor law mandates that employers provide end-of-service gratuity:
While the UAE does not have a comprehensive social security system, employees receive various benefits. Only UAE nationals contribute to the pension scheme.
The mandatory and statutory benefits in the UAE are:
Many employers also provide:
Accounting standards must adhere to International Financial Reporting Standards (IFRS).
Companies in the UAE must maintain proper accounts and may be required to file annual returns depending on their legal structure and size.
Audit requirements in the UAE depend on the company size, structure, and business activities:
The standard corporate tax rate is:
The VAT rate in the UAE is 5%, which applies to most goods and services.
Typically, the deadline for filing the tax return varies by tax type:
Corporate tax return is typically with nine months of year-end
VAT returns filed quarterly or monthly depending on business size
In April 29,2025 the Ministry of Finance and Federal Tax Authority (FTA) introduced corporate tax penalty waiver, a one-time concession. Businesses will get exempted from penalties if the business submits the returns within seven months from the end of the first tax period.
The UAE has implemented transfer pricing regulations requiring:
The UAE has implemented CbC reporting in line with OECD BEPS Action 13.
Transfer pricing documentation is mandatory for companies that exceed certain thresholds.
Master File
Local File
Deadline: To be prepared and made available by the time of the corporate tax return filing but not submitted unless requested by the Federal Tax Authority (FTA).
Data protection is governed by the Federal Decree Law No. 45 of 2021, also known as the Personal Data Protection Law, which sets out requirements for the collection, processing, and storage of personal data.
The UAE has comprehensive AML/CFT regulations governed by various federal laws and regulatory authorities.
Obligated entities: Banks, financial institutions, real estate companies, precious metals dealers, and designated non-financial businesses and professions.
Key requirements:
Penalties: Fines, revocation, and criminal charges.
Reasons you should setup legal entity in the UAE:
Cerity Global ensures your business expansion in the UAE is fast, compliant, and future-ready, so you can focus on growth while we manage the back-office tasks.
Economic figures are subject to change based on quarterly reports and market conditions.
Cerity Global combines deep local knowledge with proven expertise to make your UAE business establishment effortless and compliant. Whether you’re looking for legal entity setup and registration or ongoing support, we’re your trusted partner for sustainable global expansion in the UAE.
Disclaimer – The information provided is for informational purposes only and does not constitute legal, business, or tax advice. Entity setup requirements, tax rates, and economic data are subject to change and may vary by location.
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