Legal Entity Setup & Back-Office Services in the United Arab Emirates

Complete UAE Entity Incorporation with Ongoing HR, Payroll, Accounting, Tax, and Compliance Support

Last Updated: July 01, 2025
UAE business hub—Cerity Global enabling company formation and regulatory support in Dubai.

Country Overview

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. 

Capital City

Abu Dhabi

Language

Arabic, English

Currency

UAE Dirham (AED)

Business Hubs

Abu Dhabi, Dubai, Sharjah, Ajman, Ras Al-Khaimah

Expand Business in the UAE

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. 

Legal Entity Setup

Types of legal entity setups for international expansion in the UAE

Limited Liability Company (LLC)

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. 

Branch

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. 

Free Zone Limited Liability Company (FZ LLC)

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. 

Free Zone Branch (FZ Branch)

A free zone branch is usually not considered a separate entity and treated as an extension of the parent company. 

Resident Director Requirements

Limited Liability Company (LLC)

An LLC requires the shareholders to appoint at least 1 director or manager. 

Branch

The parent company must appoint 1 general manager. 

Free Zone Limited Liability Company (FZ LLC)

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. 

Free Zone Branch (FZ Branch)

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. 

Bank Account Setup

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: 

  • Bank accounts cannot be opened before incorporation and obtaining necessary licenses. 
  • A business license or initial approval is generally required to start the bank account application.

After Incorporation: 

  • A corporate AED account can be opened with local or international banks. 
  • Multi-currency accounts may be available depending on the bank.

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. 

Why Choose Cerity Global's Legal entity setup service?

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. 

Human Resources

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: 

  • Job title and description 
  • Working hours and location 
  • Leave entitlements 
  • Probationary period 
  • Salary and benefits 
  • Termination and notice period 

Types of employment relationships

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. 

  • There’s no official minimum wage mandated federally in the UAE. 
  • The overtime payment is:
    • Daytime overtime – 125% of regular wage
    • Nighttime, weekly off, or public holiday overtime – 150% of regular wage or compensatory time off 

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. 

  • Who it’s for: Foreign nationals with a confirmed employment offer. 
  • Entity requirement: Must be sponsored by a licensed UAE employer. 
  • Processing time: 2 to 4 weeks typically. 
  • Permit duration: Usually 2 to 3 years, renewable.

 

2. Golden Visa  

Long-term residence visa for investors, entrepreneurs, and skilled professionals. 

  • Who it’s for: Investors, entrepreneurs, skilled professionals, and their families. 
  • Permit duration: 5 to 10 years depending on category. 
  • Work rights: Flexibility to work for different employers. 
  • Family reunification: Spouse and children included.

 

3. Freelancer Visa 

Allows professionals to work independently in specific free zones. 

  • Who it’s for: Freelancers and independent professionals. 
  • Permit duration: 1 to 3 years depending on the free zone. 
  • Work rights: Generally, can work for multiple clients. 
  • Sector-specific: Available for media, technology, and other approved sectors.  
     

4. Investor Visa 

For foreign investors establishing businesses in the UAE. 

  • Who it’s for: Foreign investors and business owners. 
  • Investment requirements: Varies by emirate and business type. 
  • Permit duration: Typically, up to 2 to 3 years, renewable. 
  • Family sponsorship: Allowed for spouse and children.
  1. UAE employer or sponsor initiates visa application. 
  2. Medical examination and Emirates ID application. 
  3. Visa stamping and entry to UAE. 
  4. Residence visa issuance upon arrival.

     

Key Notes: 

  • All work visas require medical examination. 
  • Educational credentials may need attestation. 
  • Some nationalities have streamlined processes. 
  • Family sponsorship requirements vary by salary level and emirate. 

Leave Entitlements and Employee Benefits

Annual Leave

Per UAE’s labor law, employees receive a fully paid annual leave of: 

  • 2 days a month – for a service between six months and one year 
  • 30 days – for a service of more than one year 

In the UAE, female employees receive maternity leave for 60 days, of which: 

  • 45 days – full pay 
  • 15 days – half pay 


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: 

  • First 15 days – Full salary 
  • Next 30 days – Half salary 
  • Last 45 days – Unpaid 

The following statutory national holidays are observed in the UAE:  

  • New Year’s Day 
  • Eid Al Fitr (4 days) 
  • Arafah day and Eid Al Adha (4 days) 
  • Hijri New Year (Islamic New Year) 
  • Prophet Mohammed’s birthday 
  • National Day (2 days)

Islamic holidays are according to moon sighting. 

Payroll

The payroll frequency is usually monthly, and employees are typically paid by the end of the month.

Mandatory Bonus

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.

End-of-Service Gratuity (EOSG)

The UAE labor law mandates that employers provide end-of-service gratuity: 

  • 21 days salary for each year of service – first 5 years 
  • 30 days salary for each year of service – after 5 years 
  • Calculated based on salary 

Benefits

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: 

  • Health Insurance 
  • Occupational Health and Safety/ Worker’s Compensation 
  • Social Security and Pension 
  • End-of-Service Gratuity (EOSG) 

Many employers also provide: 

  • Housing allowance 
  • Transportation allowance 
  • Education allowance for children 

Accounting Standards

Accounting standards must adhere to International Financial Reporting Standards (IFRS).

Reporting Requirements and Thresholds

Companies in the UAE must maintain proper accounts and may be required to file annual returns depending on their legal structure and size. 

  • Filing requirements vary by emirate and business type. 
  • Audited financial statements may be required for certain companies. 
  • Electronic filing systems are increasingly used. 

Audit Requirements and Thresholds

Audit requirements in the UAE depend on the company size, structure, and business activities: 

  • Public companies require mandatory audits 
  • Private companies may require audits based on revenue or asset thresholds 
  • Free zone companies have specific audit requirements 
  • Audits must be conducted by licensed auditors 

Taxes and Contributions

Corporate Tax

The standard corporate tax rate is:

VAT

The VAT rate in the UAE is 5%, which applies to most goods and services.

 Filing Dates

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

Penalties

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.

Transfer Pricing

The UAE has implemented transfer pricing regulations requiring: 

  • Arm’s length principle for related party transactions 
  • Documentation requirements for qualifying transactions 
  • Economic substance regulations for certain activities 

Country by Country Reporting

The UAE has implemented CbC reporting in line with OECD BEPS Action 13. 

  • Applicable to: Multinational groups with consolidated revenues exceeding AED 3.15 billion in the previous fiscal year.  
  • Ultimate parent entities resident in the UAE must submit the CbC report. 
  • Filing deadline:  December 31 following the financial year end 
  • Notifications are required from constituent entities by March 31. 

Master File and Local File Requirements and Thresholds

Transfer pricing documentation is mandatory for companies that exceed certain thresholds. 

Master File 

  • Required if consolidated revenue of the group exceeds AED 3.15 billion. 
  • Must include information about the group’s structure, business activities, intangibles, intercompany transactions, and financial arrangements. 

Local File 

  • Required if the total volume of related-party transactions exceeds:
    • AED 10 million per transaction for goods. 
    • AED 5 million for services or interest.
    • Any transaction with a jurisdiction on the UAE’s list of non-cooperative tax jurisdictions. 

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 & AML Compliance

General Data Protection Act

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.

AML (Anti-Money Laundering)

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: 

  • Customer Due Diligence (CDD) and Enhanced Customer Due Diligence (ECDD)
  • Suspicious Activity Reporting (SAR)
  • Currency Transaction Reports (CTR) > specified thresholds 
  • Record-keeping requirements 
  • Appointment of a compliance officer 
  • Regular training and monitoring

 

Penalties: Fines, revocation, and criminal charges. 

Why the UAE?

Reasons you should setup legal entity in the UAE: 

  • Gateway to Middle East, Africa and South Asia 
  • Strategic location and world-class infrastructure 
  • Business friendly regulatory environment 
  • 100% foreign ownership in free zones 
  • Diverse and skilled workforce 

 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 as your legal entity setup partner in the UAE

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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