Legal System

Mixed system: a federal civil-law base (Egyptian/French tradition) with Sharia principles in commercial matters. The DIFC and ADGM free zones are independent common-law jurisdictions.

Principal Arbitration Centre

DIAC (Dubai International Arbitration Centre) and the ADGM Arbitration Centre. DIFC-LCIA was abolished by Decree No. 34 of 2021 (14 September 2021) and its cases transferred to DIAC.

Corporate Tax

Standard 9% (on profit above AED 375,000); a 0% rate is possible on qualifying income in free zones. VAT is 5%.

Partner Office

Served together with our local partner office across mainland and DIFC/ADGM structures.

Country Desk Brief

Legal System, Investment, Trade & Regulation

The UAE offers two principal routes. Mainland companies are licensed by the relevant emirate's economy department (for example, Dubai DET) and may operate across the entire UAE market and in public tenders. Free-zone companies are licensed by each zone's own authority, offering 100% foreign ownership, customs exemption and rapid digital incorporation, though they are generally oriented toward international trade and services.

Under the Commercial Companies Law (Federal Decree-Law No. 32 of 2021), 100% foreign ownership is now permitted on the mainland for most commercial and industrial activities, in line with the National Investment Strategy 2031 — with restrictions remaining in strategic sectors such as defense, energy and telecommunications.

At a Glance — 2024

Investment & Trade Indicators

$45.6B
Foreign direct investment attracted in 2024 (~48% annual increase)
~37%
Share of total Middle East FDI captured by the UAE in 2024
5.23T AED
Record foreign trade in 2024 (~49% growth since 2021)
~2.2T AED
Cumulative FDI target by 2031 under the National Investment Strategy

Establishment

How to Form a Company

Two main routes exist. Mainland companies are licensed by the relevant emirate's economy department (e.g. Dubai DET) and can operate across the whole UAE market and in public tenders. Free-zone companies are licensed by each zone's own authority.

Foreign ownership: the Commercial Companies Law (Federal Decree-Law No. 32 of 2021, in force 2021) permits 100% foreign ownership on the mainland for most commercial and industrial activities, with limits remaining in strategic sectors such as defense, energy and telecommunications.

Indicative cost: free-zone licences start from around AED 12,500, and same-day incorporation options are available.

Typical steps

Activity selection
Determine the commercial activity to be carried out.
Trade name approval
Obtain approval of the proposed company name.
Licence type
Select the licence category — commercial, industrial or professional.
Incorporation documents & office
Prepare incorporation documents and secure an office or flexi-desk.
Licence & visas
Obtain the licence, followed by investor and employee visas.

Investment Climate

Investment Models & Where Capital is Flowing

The UAE attracted USD 45.6 billion (AED 167.6 billion) in foreign direct investment in 2024 — an annual increase of around 48% — entering the global top 10 and taking roughly 37% of FDI into the Middle East. Investment has diversified to reduce reliance on any single sector. In Dubai specifically, estimated 2024 FDI capital concentrated in construction (35.4%), retail (12%), manufacturing (11.1%), business services (10%) and logistics/distribution /transport (8.8%), with data centres and luxury housing demand prominent.

  • Greenfield projects — announced greenfield investment led by software & IT services (11.5%), business services (9.7%), renewable energy (9.3%), oil-gas-coal (9%) and real estate (7.8%).
  • FDI stock distribution — wholesale/retail trade (26%), real estate (24%), finance & insurance (21%), mining (8%) and manufacturing (7%).
  • Strategic target — a cumulative ~AED 2.2 trillion FDI target by 2031 under the National Investment Strategy 2031.
  • Priority areas — advanced manufacturing, renewable energy, financial services and information technology; investor choice is driven largely by 100% ownership, competitive tax and political stability.

Foreign Trade — 2024

Recent Trade & Principal Partners

UAE foreign trade has grown around 49% since 2021, reaching a record AED 5.23 trillion in 2024 — positioning the country as a global trade and re-export hub between East and West. The India-UAE CEPA agreement has lowered tariffs on more than 80% of bilateral trade, and India is expected to become the UAE's largest export/import market by 2030. Saudi Arabia is generally the UAE's largest regional trading partner.

Top Import Partners
  • China
  • India
  • United States
  • Japan
Top Export Partners
  • China
  • India
  • Japan
  • Saudi Arabia
  • Iraq
India-Axis Growth
  • India-UAE CEPA in force
  • Tariffs cut on 80%+ of bilateral trade
  • India projected as the largest market by 2030
  • Saudi Arabia — largest regional partner

Regulatory Developments

Notable Legislative Changes

Issued 9 December 2022 · applies FY from 1 June 2023

Corporate Tax — Federal Decree-Law No. 47 of 2022

Introduced the 9% standard rate, applying to financial years beginning on or after 1 June 2023 (previously there was no federal corporate tax).

In force 2021

Commercial Companies Law — Federal Decree-Law No. 32 of 2021

Corporate framework reform making broad 100% foreign ownership on the mainland permanent.

Issued 14 Sep 2021 · in force 20 Sep 2021

Arbitration — Decree No. 34 of 2021 (Dubai)

Abolished DIFC-LCIA and EMAC, transferring cases to DIAC (new DIAC Arbitration Rules 2022).

2022

Tax Procedures — Federal Decree-Law No. 28 of 2022

Renewed and amended the 2017 tax procedures law.

Resources

Useful Official Links

→ Corporate Tax (official portal) → Abu Dhabi Chamber of Commerce → Dubai Chamber of Commerce → Public Procurement / Tenders (federal) → Official Legislation Portal

Our Approach

How Mermeroglu Legal Engages in the UAE

UAE mandates frequently combine mainland licensing with DIFC, ADGM and free-zone structuring, and may engage the law of the investor's holding jurisdiction for tax and financing. Our practice is structured to coordinate across those systems through a single point of accountability, working in close coordination with our local partner office.

Each mandate is led by a single matter principal at the firm, supported by an internal team and local counsel across the mainland and DIFC/ADGM routes — covering company formation, investment licensing, foreign trade and dispute resolution before DIAC and the ADGM Arbitration Centre.

INITIAL ENQUIRIES

Market entry and cross-border matters in the UAE are handled through coordinated internal and alliance teams.

Contact Us