Mainland licence
Registered with the emirate’s economic department (e.g. Dubai DET). You can trade anywhere in the UAE and bid for government work; some activities need local-agent or approval steps.
Starting up · UAE
Business setup in the UAE, made clear
Mainland or free zone? Which licence, which activities, and what happens to VAT and Corporate Tax once you start trading. Here is the overview — and how to get your accounting side ready from day one.
Two routes to a UAE trade licence
Most UAE businesses start with one decision: mainland or free zone. Mainland companies register with the emirate’s economic department and can sell directly across the country, including to government. Free-zone companies register with a specific authority — DMCC, IFZA, JAFZA, ADGM and dozens of others — usually with full foreign ownership and a bundled package of licence, visas, and office space.
Neither is simply “better”. The right choice depends on where your customers are, whether you need to invoice the mainland directly, your visa quota, and your budget. What both share is what comes next: once you are trading, the UAE expects proper books, and VAT and Corporate Tax rules apply regardless of which route you took. This page walks through the setup basics, then the accounting and tax steps AIMuhaseb helps with.
What you actually need to decide
The six things that shape your licence, your costs, and your later tax position.
Free zone licence
Registered with a free-zone authority (DMCC, IFZA, JAFZA, ADGM and others), usually 100% foreign ownership, streamlined setup, and packages that bundle visas and office space.
Choosing activities
Your trade licence lists specific commercial, professional, or industrial activities. Pick them carefully — they define what you can invoice for and affect approvals.
Where you can trade
Free-zone companies invoicing onto the mainland often work through a distributor or a mainland branch. Mainland companies can sell across the UAE directly.
Substance & ownership
Recent reforms allow full foreign ownership for most mainland activities, but confirm your specific activity, visa quota, and office requirements before you commit.
The running costs
Beyond the licence fee, budget for renewals, visas, office or flexi-desk, and — once trading — bookkeeping, VAT, and Corporate Tax obligations.
From idea to trading and compliant
The setup journey, with the tax side built in — not left to the last minute.
01
Choose structure & jurisdiction
Decide mainland vs free zone based on where you sell, ownership needs, visa quota, and cost. This choice also shapes your later tax position.
02
Reserve name & apply
Reserve a trade name, get initial approval, and submit the licence application with your chosen activities to the DET or free-zone authority.
03
Get the licence & bank account
Receive your trade licence and establishment card, arrange visas, then open a corporate bank account — banks will ask for the licence and MOA.
04
Register for tax & start books
Assess VAT and Corporate Tax registration, then set up bookkeeping from day one so your first return is not a scramble.
Set up? Now get the numbers right
A licence is the start, not the finish. The FTA expects proper records, and VAT and Corporate Tax deadlines arrive fast. AIMuhaseb handles the accounting and tax side so your first return is routine, not a rush.
- A UAE-ready chart of accounts the moment you start trading
- Corporate Tax registration handled — 0% up to AED 375,000 taxable income, 9% above
- VAT registration guidance: mandatory at AED 375,000, voluntary from AED 187,500
- Clean IFRS double-entry books that satisfy FTA record-keeping rules from day one
- One place for invoicing, expenses, bank reconciliation, and VAT 201
- An AI assistant that categorises transactions and drafts journals for approval
Business setup questions
What is the difference between mainland and free zone in the UAE?
A mainland company is licensed by the emirate’s economic department (such as Dubai DET) and can trade directly across the UAE, including government contracts. A free-zone company is licensed by a specific free-zone authority (DMCC, IFZA, JAFZA, ADGM and others), typically offers 100% foreign ownership and a bundled setup, but usually reaches the mainland market through a distributor or a mainland branch. The right choice depends on where you sell, ownership, visa needs, and budget.
Does AIMuhaseb help with company formation and the trade licence?
AIMuhaseb is an accounting and tax platform, so it is not a company-formation agent and does not issue trade licences. Our focus is what happens after you are set up: registering for VAT and Corporate Tax, keeping compliant books, and filing on time. If you send us an enquiry, we can point you in the right direction and get your accounting and tax side ready.
When does a new UAE company need to register for VAT?
VAT registration is mandatory once taxable supplies and imports pass AED 375,000 over the previous 12 months or are expected to in the next 30 days. Voluntary registration is available from AED 187,500, which some new businesses choose so they can recover input VAT. Registration is done through the FTA’s EmaraTax portal.
Do free-zone companies pay UAE Corporate Tax?
Corporate Tax applies across the UAE, including free zones. A Qualifying Free Zone Person can benefit from a 0% rate on qualifying income if strict conditions are met (adequate substance, qualifying income, audited financial statements, transfer-pricing compliance and a de-minimis test); non-qualifying income is taxed at 9%. Most companies should register for Corporate Tax regardless — confirm your status before assuming the 0% rate applies.
When must a new company register for Corporate Tax?
A company incorporated on or after 1 March 2024 generally registers within three months of incorporation. Businesses that existed before that date register by a deadline tied to the month their licence was issued. Late registration carries an AED 10,000 penalty, so it is worth handling early rather than after trading begins.
Should I set up bookkeeping straight away or wait until later?
Straight away. The FTA requires businesses to keep proper records, and starting clean books from your first invoice avoids an expensive catch-up before your first VAT or Corporate Tax return. AIMuhaseb gives you a UAE-ready chart of accounts, invoicing, bank reconciliation, and VAT 201 from day one, so compliance is built in rather than bolted on.
Enquire
Ready for the accounting & tax side?
Tell us about your new or planned UAE company — VAT and Corporate Tax registration, bookkeeping, or the full back office. A UAE specialist will get back to you shortly.