Author: Ivanka Pylypiuk, owner and CEO of Parus Corporate Services LLC

How to Know if the UAE is the Right Market for You?

If you’re choosing a jurisdiction to take your business to an international level, it’s important to ask yourself the right questions. For example: “Are my clients, partners, or suppliers located in Middle Eastern countries?” If the answer is no, then perhaps you should consider other regions. However, if you’re planning to invest in a promising sector in the region, purchase property in the Emirates, or launch a crypto or e-commerce project with global ambitions, the UAE might be the ideal choice.

It’s essential that your choice of jurisdiction makes sense not just to you, but also to local tax authorities and banks that will review your application to open an account. Just saying “taxes are low” is not a sufficient justification. A clear, reasoned business model and market entry strategy are necessary.

Who to Sell to in the UAE Market?

The UAE is home to about 11 million people, over 10 million of whom are expats from over 200 nationalities. This makes defining your target audience a complex task.

Global giants like Amazon and Uber have the resources for extensive localization. But if your business is niche, you need a precise understanding of your customer — are they locals, a specific ethnic group, or speakers of a particular language? This needs to be clarified in advance to successfully scale in the region.

Don’t Come to the Emirates “With Your Own Samovar”

I often encounter entrepreneurs, especially from Eastern Europe, who are convinced they know how to do business the “right way” and come to the UAE to teach others. This isn’t just a mistake — it’s a dead end. Ignoring the specificities of the country while hoping for success is, at best, naïve.

You have two paths in a new market. One is harder but more privileged: changing the market to fit you. This is for the strong — those with a truly unique product and a large-scale strategy. The other is to adapt to existing rules, understand the local culture and environment, and confidently grow into your niche. This path is equally valid, especially for newcomers.

A simple example: you won’t get the typical banking products you’re used to if you choose an Islamic bank without understanding its principles. A restaurant serving alcohol and pork won’t survive in a neighborhood of observant Muslims. Success here belongs to those who adapt or create something new at the intersection of cultures.

Cultural Nuances That Impact Business

The Middle East has unwritten rules that are crucial for effective business:

1. People Don’t Say “No” Directly
   You may be greeted with a smile and have your documents accepted — but never hear back. This isn’t a refusal, just a cultural nuance. Learn to read between the lines.
2. Relationships First, Then Business
   No one starts with a product pitch. First comes the relationship — familiarity, trust, and a human connection. Only then come deals.
3. Learn to Be Patient
   Everything takes time here — responses, decisions, transactions. Patience and consistent communication are essential.

A Strong Business Model is Your Main Asset

The UAE isn’t the place for trial and error. It’s a market for mature businesses with stable processes and financial buffers.

A strong business model means understanding the market, a clear structure, logistics, marketing, and most importantly, resources to survive the first months without loss. Long-term commitment is valued — leases start at a year, and contracts often span 5–10 years.

Is It Possible to Attract Investment?

Yes, the UAE has investment funds and private investors. But no one invests in napkin ideas. Investors are interested in businesses that already have an office, team, website, at least one year of market experience, and some financial performance.

Simply put — investments are for scaling, not launching. You finance the launch. But if you can show potential — you’ll get noticed.

How Much Does a Company in the UAE Cost?

The best things are rarely cheap — and this applies to setting up a business in the Emirates. The minimum annual budget for company administration starts at $10,000 and can realistically reach $15,000–20,000. This is more than in some European, Asian, or American jurisdictions. So, assess your budget in advance.

But what do you get in return?

• One of the most tax-friendly systems: 9% corporate tax, 5% VAT, and no personal income tax;
• A promising real estate market: since 2019, prices have risen by over 50% and transaction volumes have doubled;
• High living standards and one of the lowest crime rates in the world;
• Eligibility for a residency visa for you and your family;
• Legal crypto trading and special free zones for digital projects.

Legal System: Key Features

The UAE operates under two parallel legal systems: Sharia law and English common law. That’s why experienced legal support is critical — for contracts, deal structuring, and dispute resolution.

Corporate agreements require special attention, especially when a company has multiple founders from different countries. All terms must be documented in accordance with local laws to protect your interests.

So, Should You Start a Company in the UAE?

If you’re successful in your field, have a clear business model, understand the market, are ready to adapt to local realities, and have at least a year’s budget — then absolutely yes. Success here is not just possible — it’s inevitable for those who are prepared and act mindfully.

And if you’re still unsure whether the Emirati market is right for you — consult with me or the team at Parus Corporate Services LLC. We’ll help you navigate the nuances, calculate costs, choose the optimal business structure, and build your market entry strategy.

The Executive Council of Dubai has adopted Resolution No. 11, which lifts the restrictions on mainland business operations for companies registered in free economic zones.

What is required to enter the UAE mainland market?

Companies licensed in Dubai’s Free Zones can now conduct business outside their designated areas, provided they obtain the appropriate licenses or permits from the Dubai Department of Economy and Tourism (DET).

What types of permits can Free Zone companies obtain?

DET may issue the following types of permits to such companies:
• A license to open a branch in the mainland of Dubai.
• A license for a branch with the head office in a Free Zone (valid for 1 year).
• A temporary permit for specific activities in the mainland (valid for up to 6 months).

Responsibilities of Free Zone companies operating in the UAE mainland:

• Comply with all applicable federal and local laws.
• Maintain separate accounting for operations outside the Free Zone.
• If planning to operate outside the Emirate of Dubai, obtain the relevant licenses and approvals from competent authorities in the respective jurisdictions.

Taxation

Income generated from mainland activities is subject to a 9% corporate tax under UAE law. Income earned within the Free Zone may remain tax-exempt if specific conditions are met.

Deadlines and Transition Period

Companies already operating outside their Free Zones as of the resolution’s effective date (March 17, 2025) must comply with the new requirements within one year. This period may be extended by another year at the discretion of the Director General of DET.

Starting March 1, the holy month of Ramadan for Muslims will begin in the UAE. In connection with this, the working hours for government employees have been adjusted for this period:

• Monday to Thursday: 9:00 AM to 2:30 PM;
• Friday: 9:00 AM to 12:00 PM. These changes will not apply to employees whose work requires a different schedule, and staff from ministries and federal authorities may use their approved work schedules during Ramadan, as long as they comply with working hour limits. If you plan to visit the UAE for work during the holy month, make sure to take these changes into account. Also, remember the rules of behavior during Ramadan: do not display aggressive behavior, refrain from listening to music and dancing in public places, avoid speaking

The authorities of the Emirate of Sharjah have announced the introduction of a special corporate tax of 20% for companies engaged in the extraction, transportation, or processing of raw materials or natural resources (oil, metals, minerals, and construction materials).

The corresponding law has already been adopted. According to it, extractive companies will be subject to a 20% tax on the taxable base in accordance with the mechanisms and schedules established in agreements between the Sharjah Oil Department and the respective company.

The taxable base for companies engaged in the extraction of natural resources is calculated based on the company’s total share of the value of extracted oil and gas, according to a formula that distributes the total royalty and other agreed payments between the Oil Department and the company.

All amounts related to royalties, bonuses, and annual rent for any concession operated by extractive companies will be determined in accordance with the agreement signed between the Oil Department and these companies.

Corporate Tax for Non-Extractive Companies Working with Natural Resources

Companies engaged in non-extractive activities are subject to a 20% tax on the taxable base for each financial year.

The taxable base for such companies is calculated based on the company’s net taxable profits under the provisions of this law, with the following adjustments:

a) Asset depreciation may be deducted from the taxable base, with non-current asset depreciation calculated at a rate of 20% per year. If a company applies international financial reporting standards that alter depreciation accounting methods, it may deduct depreciation amounts according to the rates specified in financial statements, provided that the finance department approves this during the audit and ensures that the intent is not to reduce profits.

b) Tax losses may be deducted from the taxable base for subsequent tax periods. Additionally, tax losses may be carried forward to unspecified future periods.

Tax Compliance and Penalties

The payment of tax is a prerequisite for renewing concession rights or a commercial license in Sharjah. Companies subject to taxation under the new law are required to maintain records and supporting documents to ensure the accuracy of the financial statements or any other tax-related documents for a period of seven years from the date of issuance.

If the emirate’s finance department determines that a company has intentionally committed financial violations for the purpose of tax evasion, a penalty of 5% of the total due tax amount will be imposed on the company.

The United Arab Emirates (UAE) has launched the first phase of the Blue Visa system – a 10-year residency visa designed for individuals contributing to environmental protection and sustainable development.

The UAE Ministry of Climate Change and Environment, in collaboration with the Federal Authority for Identity, Citizenship, Customs, and Ports Security (ICP), announced this initiative during the World Governments Summit, which is currently taking place in Dubai.

In the initial phase, 20 sustainability leaders and innovators will be granted the Blue Visa.

This visa targets individuals who have made significant contributions to environmental protection, including members of international organizations, representatives of non-governmental groups, corporate leaders, global award winners, and researchers.

Eligible individuals can apply directly through ICP or be nominated by UAE authorities.

According to the Global 500 Brand ranking, presented at the Economic Forum in Davos, the Emirati company e& has been recognized as the “World’s Fastest-Growing Brand.” The company’s brand value has increased eightfold compared to last year, reaching a record $15.3 billion for e& as a standalone brand.

Additionally, the telecommunications company e& has entered the TOP 10 most valuable telecom brands in the world, according to the Global 500 Brand 2025 ranking.

The UAE’s National Oil Company – Adnoc also performed well in the ranking. In this year’s edition, Adnoc was named the world’s fastest-growing energy brand, with its value rising by 25% over the year to $19 billion. Currently, this brand is the second most valuable in the region.

According to the Quality of Life ranking, Abu Dhabi has been recognized as the world’s safest city for the 9th consecutive time. Dubai and Sharjah claimed the second and third spots in the ranking.

The capital of the UAE has held the title of the world’s safest city since 2017, according to the ranking. Abu Dhabi has been recognized as the safest city for residents and tourists, as well as for anyone who values a stress-free life.

The ranking’s authors highlighted the city’s advanced safety strategies and programs designed to maintain a positive atmosphere.

Additionally, Abu Dhabi was noted for being an attractive place for education, work, and living.

Ivanna Pylypyuk, the founder of Parus Corporate Services, shared her insights on how recent legislative changes, including the introduction of corporate tax, have impacted business in the UAE. Why this has only increased the attractiveness of doing business, the advantages of this step, and much more are covered in this article.

The UAE is no longer a tax-free jurisdiction for businesses. How has this changed doing business in the country?

The introduction of corporate tax has undoubtedly changed the business environment. Companies are now required to pay a 9% corporate tax on profits, which has necessitated the adaptation of business processes and improvements in financial management. Of course, this represents an increased burden for businesses and demands greater attention. However, the tax introduction also has its positive sides: the business environment has become more transparent and predictable, increasing the UAE’s attractiveness in the eyes of international investors. Among large corporations, the UAE’s reputation has become more stable and raises fewer questions.

Additionally, the extra tax revenues will help the government diversify the economy and reduce its dependence on oil revenues, contributing to sustainable economic growth. Another significant achievement is that the Financial Action Task Force (FATF) has added the UAE to its whitelist of countries. This is largely thanks to the introduction of corporate tax and the completion of standardization processes related to anti-money laundering (AML) screening. As a result, doing business in the UAE is safe from every perspective and fully aligned with international standards.

How critical is the current tax burden in the UAE for businesses?

The current tax burden in the UAE remains one of the lowest in the world. The corporate tax rate is just 9%, which is significantly lower than in many other countries, and this factor does not put substantial pressure on companies. The UAE offers special tax regimes for small businesses (Small Business Relief) and incentives for certain free zones. Offshore entities are still exempt from taxation, allowing them to be used for specific transactions.

For most businesses, the tax rate is not critical and allows companies to maintain high competitiveness. Of course, attention must be paid to company administration, as it is necessary to hire accountants and resolve outstanding compliance issues from previous periods.

Who will find the UAE an optimal choice for building a corporate structure? What types of activities will thrive in the UAE in 2024?

The UAE is particularly attractive now for international companies in sectors such as technology, finance, logistics, and e-commerce. For tech companies, the UAE offers advanced infrastructure and government support for innovation. Logistics companies can benefit from the country’s strategic location, while financial and fintech companies find a favorable ecosystem for growth.

Additionally, companies involved in international trade will also benefit from advantageous conditions. The jurisdiction is appealing for conducting real business and relocation, as there is no personal income tax in the UAE, which makes it possible to attract top talent from around the world.

However, the UAE is not a jurisdiction for everyone. Success here is achieved by companies with strong business models, whether they are large corporations or startups.

You have been living in Dubai for several years, during a time of significant legislative changes, especially regarding corporate taxes. Do you feel these changes? How has the UAE’s business climate evolved compared to, say, 2021?

Since the introduction of corporate tax in the UAE, the business climate has become more structured and transparent. Companies are paying more attention to tax planning and compliance with legislative requirements. This has improved corporate governance and enhanced the UAE’s reputation as a stable and predictable place for doing business.

Compared to 2021, the current business environment is more organized and open to international investors. The UAE remains a perpetual transit hub for capital, talent, and business. It is a highly competitive environment that attracts international companies.

What trends do you observe in the UAE? Where is the non-resident business sector headed?

The UAE continues to diversify its economy and actively develop sectors unrelated to oil. Particular attention is being paid to technology, fintech, sustainability, and renewable energy. Non-resident businesses are actively being attracted to the country thanks to low tax rates and favorable conditions for international operations.

At the same time, regulation and transparency are increasing, making the UAE attractive for sustainable, long-term business growth. The UAE aims to attract top talent and startups, as evidenced by its extensive long-term visa programs, including the well-known Golden Visas (10 years), Green Visas (5 years), and Blue Visas.

The government and each emirate have development plans offering excellent conditions for business relocation and family living. These include high levels of safety, exceptional service, cleanliness, comfortable living conditions, and the opportunity to earn a good income. This makes the UAE unique on the global stage.