UAE company setup for Indian entrepreneurs: mainland, free zone or offshore — and what India requires
The structure you choose decides where you can trade in the UAE, and the Corporate Tax clock starts on incorporation. How to choose, the first three months, and the Indian-side steps.
For many Indian businesses the UAE is the natural first company abroad. The two countries have had a double taxation agreement since 1992, the India–UAE Comprehensive Economic Partnership Agreement has applied since 1 May 2022, and a bilateral investment treaty has been in force since 31 August 2024. Getting the structure right on both sides, though, takes a little planning.
Step 1 — choose the structure that fits how you will trade
| Mainland | Free zone | Offshore | |
|---|---|---|---|
| Licensed by | The emirate's economic department (in Dubai, the Department of Economy and Tourism) | The free zone authority (for example IFZA, DMCC, RAKEZ) | An offshore registry (for example RAK ICC) |
| Where you can trade | Anywhere in the UAE and abroad | Inside the free zone and internationally; selling into the mainland needs a distributor, a mainland licence or a permit | Outside the UAE and holding assets — not trading with UAE customers |
| Foreign ownership | Up to 100% for most activities | 100% | 100% |
| Residence visas | Yes — quota usually linked to office space | Yes — depending on the licence package | No |
Mainland. Since June 2021 most mainland activities can be 100% foreign-owned; a short list of strategic-impact activities — such as banking, insurance, defence and telecommunications — still carries restrictions. More on mainland company setup.
Free zone. Full ownership and flexible office options make free zones a common choice for consultancies, IT firms and traders. In Dubai, Executive Council Resolution No. 11 of 2025 allows non-financial companies licensed in Dubai's free zones to carry out listed activities on the Dubai mainland under a branch licence or a temporary permit issued by the Department of Economy and Tourism, with the free zone authority's prior approval. More on free zone company setup.
Offshore. Useful for holding assets outside the UAE, not for trading in the UAE or sponsoring visas — and, for a resident Indian individual, the ODI conditions described below usually rule out a pure holding company. More on offshore company setup.
Step 2 — the UAE tax and compliance steps in your first three months
| Bank account | As soon as the licence is issued — banks ask for the licence, constitutional documents and shareholder KYC. Bank account assistance |
| Beneficial owner register | Filed with the licensing authority within 60 days; changes reported within 15 days |
| Corporate Tax registration | Within 3 months of incorporation for companies incorporated on or after 1 March 2024; late registration carries an AED 10,000 penalty (how the waiver works) |
| Bookkeeping | From the first transaction — the first Corporate Tax return is due 9 months after your first financial year ends |
| VAT registration | Mandatory once taxable supplies and imports exceed AED 375,000 in 12 months (or are expected to within the next 30 days); voluntary from AED 187,500 of supplies, imports or expenses |
A free zone licence is not automatically 0%. The standard Corporate Tax rates are 0% on taxable income up to AED 375,000 and 9% above it. A free zone company pays 0% only on qualifying income, and only while it meets every condition, including adequate substance and audited financial statements — see the qualifying free zone person conditions on pbz.ae.
Step 3 — the Indian side
- ODI eligibility. If you are resident in India, the UAE company must be an operating business, not in financial services, and without subsidiaries you control — so plan any later expansion (for example into Saudi Arabia) with this in mind.
- Remittance. Capital is sent under LRS (up to USD 250,000 a year); TCS of 20% applies to the amount above ₹10 lakh in a financial year and is creditable against your tax.
- Reporting. Form FC through your bank before the investment is made, an Annual Performance Report generally by 31 December each year, and — if you are resident and ordinarily resident — Schedule FA in your return.
- Management. If the company is run from India, its place of effective management — and therefore its tax residence — needs careful attention.
Our full checklist is in Owning a company abroad as a resident Indian.
How we help
We handle the Indian-side clearance and reporting; our colleagues at probizsetup.com handle the licence, visas and bank account in the UAE, and pbz.ae takes care of Corporate Tax, VAT and monthly bookkeeping (accounting software is included in its bookkeeping packages). Request a consultation.
Sources: Federal Decree-Law No. 26 of 2020 and Federal Decree-Law No. 32 of 2021 on Commercial Companies (as amended), and Cabinet Resolution No. 55 of 2021; Dubai Executive Council Resolution No. 11 of 2025; Federal Decree-Law No. 47 of 2022 on Corporate Tax and Cabinet Decision No. 116 of 2022; Cabinet Decision No. 100 of 2023 and Ministerial Decision No. 229 of 2025; FTA Decision No. 3 of 2024; Cabinet Decision No. 10 of 2024; Cabinet Decision No. 109 of 2023; Federal Decree-Law No. 8 of 2017 on VAT (as amended) and Cabinet Decision No. 100 of 2024; India–UAE DTAA (1992, as amended); Foreign Exchange Management (Overseas Investment) Rules, 2022.