How to set up a company in Dubai: free zone or mainland, step by step

Setting up a Dubai company doesn't, on its own, take you or your money out of UK tax. As of November 2026, your UK residence is decided each tax year by the Statutory Residence Test, and a UAE visa or free zone licence isn't part of it ¹. The Dubai company is one half of the move. Where you live and work decides the other half.

Does setting up a company in Dubai change my UK tax position?

No, not by itself. A Dubai company changes where the company is registered. Your own UK tax still depends on your days, your work and your ties to the UK, tested every UK tax year ¹.

People hear "Dubai" and picture a tax bill shrinking. In fact there are two separate questions:

• The company's tax. UAE corporate tax, and the special treatment for a "qualifying free zone personFree zone companyA company set up in a designated zone, such as those in the UAE, with its own rules on ownership, tax and what it can do." (a free zone company that meets the Federal Tax Authority's conditions), are set out in official guidance from the Federal Tax Authority, or FTA ⁵.
• Your tax. If you're still UK-resident, you're taxed on your worldwide income and gains from 6 April 2025.

Being a director of a UAE company doesn't make you UK-resident or non-resident on its own ¹. And work you do while physically in the UK can count towards the residence test's work rules, and carry its own UK tax consequences ¹.

There's a sting for people who come back, too. Under the temporary non-residenceTemporary non-residenceA UK anti-avoidance rule: if you leave and come back too soon, some income and gains you received while away can be taxed when you return. rules, certain gains from your time abroad can be pulled into UK tax in the year you return. The rules on what is caught can change, so check the current position before you plan around them. That's a grey area, covered below.

Free zone or mainland: which licence fits what you actually do?

You're choosing between a licence from a free zone authority (DMCC, IFZA or DDA, for example) and a mainland licence from Dubai's Department of Economy and Tourism, or DET ⁴. Which suits you depends on your business, and the tax label depends on meeting the FTA's conditions ⁵.

A free zone is a designated area with its own licensing authority. "Mainland" means licensed by DET. The question that matters for tax is whether a free zone company counts as a qualifying free zone person. That turns on conditions set out in the FTA's Corporate Tax Guide on Free Zone Persons and its TAXP010 guidance ⁵. A free zone address isn't the qualification. The conditions are.

Before you pick an authority, check whether the move itself suits you.

What are the steps to set up, and what does each one cost?

There are six main pieces: choose the authority, get the licence, declare who owns the company, open a bank account, sort the company's corporate tax status, and check the UK side. Costs are only officially published for some authorities, so check what every quote leaves out ⁴.

The DMCC packages and the standalone licence aren't like-for-like, so don't compare them as if they were. DET calculates fees per application, and no official DET fee schedule was found ⁸. No reliable current comparison of visa quota, visa and Emirates ID charges across DET, DMCC, IFZA and DDA was found either ⁴. A quote with one tidy headline number deserves a second, slower read.

Where are the grey areas?

Some of the UK rules here are settled. Others turn on facts that HMRC weighs case by case, like where decisions are really made. So an honest answer is "it depends" until the facts are pinned down.

Will my UK tax residence change when I get a UAE visa?

Not on its own. As of October 2026, UK tax residenceTax residenceThe country that treats you as living there for tax purposes, and so can tax your worldwide income. Each country sets its own rules; your passport doesn't decide it. is decided each UK tax year by the Statutory Residence Test, and a UAE visa or free zone licence isn't one of its tests ¹. Your days, your work and your UK tiesUK tiesConnections the Statutory Residence Test counts against you, such as family in the UK, a UK home you can use, UK work, or recent UK residence. decide it ¹.

"Tax residence" means the country that gets first claim on taxing you. Since 6 April 2025, a UK resident is taxed on worldwide income and gains. So the answer matters a lot, and you will hear the phrase constantly.

Example (not a real client): Say you pick up a Golden VisaResidence by investment (golden visa)A programme that grants the right to live in a country in return for an investment, often in property or funds. in May. You still spend 190 days in the UK that tax year. That's more than the 183-day automatic UK test, so you're UK-resident for the year ¹. The visa in your passport doesn't change that ¹.

Being a director of a UAE company doesn't settle it either way ¹. Watch where you do the work. Duties carried out while you're physically in the UK can count for the SRTStatutory Residence Test (SRT)The UK's rulebook for deciding whether you're UK tax resident in a tax year, combining days spent in the UK with your 'ties' to the UK. work tests and carry separate UK tax consequences ¹. Answering board emails from a Cotswolds kitchen is still working in the UK, sadly.

Leaving partway through a year may be treated as a split yearSplit-year treatmentA UK rule that can split the tax year in two when you arrive or leave, so you're only taxed as UK resident for part of it., but only if your facts fit one of the cases in HMRC's RDR3 guidance. If they don't, you could be UK-resident for the whole year. Count your days and keep the evidence.

What if my UK company is run from abroad, or my UAE company from the UK?

A UK-incorporated company generally stays UK-resident for corporation tax, wherever its director lives ². A UAE company can become UK-resident if its highest-level control is actually exercised in the UK ². Where it's registered and where it's really run are two separate tests.

The UK uses two rules here, as of October 2026:

• The incorporation rule. Register the company in the UK and it's generally UK-resident ². Moving to Dubai yourself doesn't change that ².
• Central management and controlCentral management and controlWhere a company's real strategic decisions are taken, usually where the directors actually meet and decide. (CMC). This mainly matters for companies registered outside the UK ². HMRC treats it as a question of fact: where the real business is managed and controlled at the top ². Usually that's the board, but someone else who has in fact taken control can count instead ².

A UK-based person being involved isn't enough to make a UAE company UK-resident; the decision-making facts matter ². So look at where the board actually meets, who signs off big contracts, and where strategy is set.

If a company is UK-resident, it's normally within UK corporation tax on its worldwide profits, with double-tax relief available ². The UAE side is a separate question. Free zone companies are dealt with under the FTA's guidance on free zone persons ⁵.

Can I get a UAE bank account, and what do banks ask?

A trade licence doesn't come with a bank account. As of November 2026, a properly incorporated UAE company can still be turned down, because each bank runs its own checks on the business, its owners, the expected activity and where the money comes from ⁷.

A beneficial ownerBeneficial owner (UBO)The real person who ultimately owns or controls a company or trust, behind any chain of companies. is the real person at the end of the chain. The Central Bank defines it as the natural person who ultimately owns or controls the customer ⁶. So expect the bank to look straight past any holding companyHolding companyA company whose main job is to own shares in other companies. and ask about you.

Be wary of any sales pitch promising an account. The research found no universal approval standard, so no adviser controls the bank's decision ⁷. Be ready to document what the company does, who pays it, and where your funds came from ⁷.

What do I need to check before I commit?

Check the UK side at the same time as each Dubai step, not afterwards. The table pairs each UAE step with its UK consequence and shows how firm that position is, so you can spot the arguable ones early.

Compare setup quotes line by line. Only DMCC has an official dated price list in the research, and there's no reliable comparison of visa and Emirates ID charges across DET, DMCC, IFZA and DDA ^{4 3}. Get advice on both countries before you sign a lease or a licence application, because undoing a structure usually costs more than planning it.

FAQ

Does a UAE visa or free zone licence end my UK tax residence? No. The Statutory Residence Test decides UK residence each tax year using days, work and ties, and a visa or licence isn't one of the tests ¹.

Is a UK limited company still UK-resident if I run it from Dubai? Generally yes. It's UK-resident by incorporation, and a director living abroad doesn't change that by itself ².

Can a Dubai company become UK-resident? It can, if its highest-level control is actually exercised in the UK ². What matters is where decisions are really made, not just who's involved ².

Does being a director of a UAE company make me UK-resident or non-resident? Not on its own. Your days, work and UK ties decide it, though duties done while you're in the UK can matter ¹.

Does a Dubai trade licence guarantee a bank account? No, it doesn't. Banks decide for themselves based on the business, owners, expected activity and source of fundsSource of funds and source of wealthWhere the money going into an account comes from (funds), and how you built your wealth overall (wealth). Banks ask both., so a licence alone doesn't settle the outcome ⁷.

How much does a DMCC licence cost? DMCC's schedule, updated 2 October 2026, lists an annual standard licence at AED 20,285 and a Basic Biz Package at AED 35,484 ³. A package and a standalone licence aren't like-for-like, so check what each includes.