Corporate Structures in United Arab Emirates (UAE)

Company Incorporation Dubai

Corporate Structures in United Arab Emirates (UAE)

Registrationwala

Preface: This post was originally published 2023 and has been updated on 01 Dec, 2025, to provide you with the most current and accurate information.

The UAE, the country where the city of Dubai is located, offers ease of doing business to entrepreneurs from across the globe. It provides numerous business opportunities in sectors like e-commerce, tourism, technology and real estate, backed by government initiatives such as full foreign ownership, golden visas for entrepreneurs and free zones. There are many different corporate structures in the UAE, with each structure having its own unique features.

In this blog post, we shall discuss all the major corporate structures in the UAE. If you’re planning for company formation in Dubai any time soon, then going through this blog post will help you decide the right corporate structure for your business!

Types of Corporate Structures in UAE

The major types of corporate structures eligible for company formation in Dubai and the rest of UAE are as follows. :- 

Let us begin by defining them one by one. 

1. Limited Liability Company

The Limited Liability Company of LLC offers the shareholders benefits of limited liability protection. Under this structure, the corporate shareholders are liable only to the extent of their share capital contributions. To set up a Limited Liability Company, a non-local applicant needs sponsorship from a local UAE sponsor (a UAE national) or a local service agent who holds a percentage of the company's shares. 

The UAE Authority puts no minimum capital requirement for LLC registration. However, the company must have enough funds as per market standard. The UAE Authority does not mandate any ITR on its Corporates unless they are involved in traditional economic activities such as oil, natural gas, etc. 

The Authority mandates a physical office space before registration. The company must also maintain a minimum of one Director/Manager. The Authority puts no constraints on the funds' repatriation, but the company must maintain a legal reserve of 10% of its profits. 

2. Branch Office

A branch office in UAE is just an extension of a parent company. It is not a separate legal entity. The branch operates under the name of the parent company and is fully controlled by it. 

However, it must still be registered and comply with local UAE laws as well as regulations. Any local/foreign company can set up its own branch office in both Mainland and Freezone jurisdictions across Dubai state. 

3. Joint Stock Company

A joint stock company is a business where the ownership is divided into transferable shares. There are two types of joint stock companies in UAE:

Every private JSC in Dubai must have a minimum of 3 and a maximum of 12 member directors. Each of these directors must be elected for a period of up to three years. The majority of the Company's Board must be UAE nationals. A public JSC in Dubai must have a minimum of 3 and a maximum of 15 directors. 

A public JSC must maintain a minimum share capital of 10,000,000 dirhams. It must also maintain a minimum of 10 founders for its incorporation. In contrast, the private JSC must maintain a minimum share capital of 2,000,000 dirhams. They must also maintain a minimum of three founders for the incorporation.

4. Free Zone Company

The Free Zone companies are situated in a Freezone within Dubai or some other part of UAE. These companies are distinct from those in Mainland Dubai. The companies incorporated in the free-zone get to enjoy 100% exemption from import and export customs duties within the free zone itself. However, duties are applicable if the goods are moved into the mainland UAE market. 

One attractive feature of free-zone companies is that they generally enjoy a 0% corporate tax rate as long as they meet the specific criteria of a Qualifying Free Zone Person under the new Corporate Tax law. Such companies, within the zone, also don't need to pay personal income tax.

Even after the UAE introduced a federal corporate tax in 2023, most qualifying Free Zone businesses continue to enjoy a 0% rate on income that meets the criteria. Free Zones also offer full foreign ownership, allowing investors to hold 100% of their company without needing a local sponsor or UAE national partner. 

There are two types of freezone companies, freezone company and freezone establishment.

(i) Free Zone Company

A Free-zone company has multiple shareholders with a limit of 50. Both natural persons and legal entities can incorporate a free-zone company. The respective freezone authority frames the legal requirements required for freezone company incorporation.

(ii) Free Zone Establishment

Every free-zone establishment must have a single shareholder, each with limited liability. Both natural as well as legal entities can incorporate themselves into a free-zone establishment. The regulations framed by the respective freezone authority are the legal requirements for such establishment's incorporation.

5. Dual License Branch Office

A Branch Office with Dual License is an extension of a Free Zone Company in Dubai. It is situated in Dubai's mainland area. These Branch offices also hold an additional license along with the Free Zone Incorporation license. A Dual Branching License reduces the cost as well as the duration of incorporating a company in the Gulf City's Mainland Area. 

It is important to note that this office is not a subsidiary. It is a Branch Office of a Free Zone company, without appointing a Local Sponsor. Such Branch Offices cannot register with the Ministry of Labour in UAE and are not eligible to issue labour permits. Therefore, the staff must be sponsored by Free Zone entity and hold Free Zone resident visas.

6. Trade Representative Office

In the United Arab Emirates, a Trade Representative Office is basically an extension of its Parent Company. It must not be regarded as an independent entity. A TRO is permitted for limited functions, such as collecting information for projects by its parent company and acting as a Marketing or Administrative Center for its parent company. 

Establishing a Trade Office in Dubai requires the appointment of any one of the following entities: (i) UAE National, (ii) Wholly-owned UAE Company, or (iii) Trade Office who cannot purchase property in UAE under their name.

Conclusion

There are numerous types of corporate structures within the UAE. Each structure comes with its own advantages as well as limitations. If you need assistance in company formation in Dubai, feel free to connect with our consultants at Registrationwala! We will guide you regarding the best corporate structure based on your business needs.

Frequently Asked Questions (FAQs)

Q1. Do freezone companies in UAE pay custom duties within the freezone?

A. No, freezone companies do not pay custom duties within the freezone.

Q2. What is a trade representative office in Dubai?

A. A trade representative office in Dubai is an extension of its parent company.

Q3. What is the difference between private joint stock company and public joint stock company?

A. The main difference between them is that the private joint stock company does not sell its shares to the public while the public joint stock company sells its shares to the public through the stock exchange.

 

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