Even though UAE is one of the most business-friendly countries on a global scale, with its striving economy, tax benefits, and strategic location, every entrepreneur must abide with some of these key legalities to ensure smooth and long term operations
According to the latest laws for business setup in 2025, here are some of the key legalities to focus on:
Licensing and legal structure
Based on the jurisdiction entrepreneurs choose to setup their operations, such as mainland, free zone, or offshore, they would be required to abide by each of their unique rules, regulations, and compliances related to taxation, ownership, operational freedom, and much more.
For example, certain companies operating in free zone are exempted from corporate tax (provided they meet the criteria); offshore companies are completely exempted from any form of tax, from VAT to corporate tax; offshore companies cannot issue UAE residence visas; physical offices are mandatory to operate in mainland, whereas, free zone companies can operate with a flexi-desk, shared office, or physical offices.
As of 2023, businesses operating in mainland earning over AED 375,000 annually are subject to 9% corporate tax, whereas, companies operating in free zones can be eligible for tax exemptions depending on whether they fulfill the specific requirements.
As of 2018, 5% of Value Added Tax (VAT) applies to companies that exceed an annual earning of 375,000 AED
As of 2018, all companies exceeding an annual earning of AED 375,000 are involuntarily subject to 5% Value Added Tax (VAT), applicable on most goods and services. Companies may choose to voluntarily apply for VAT when their earnings exceed AED 187,500; however, it is not mandatory unless earnings reach AED 357,000.
Labour laws and employment regulations
The UAE labour law regulations highlight the labour contract between the employer and employee, the scope of an employee’s work, and their
Intellectual property; trademarks, copyright, patents
It’s vital for businesses to protect their brand, products, and any innovations it makes in order to avoid being ripped off in the market, which is why the UAE has strict intellectual property laws, which cover trademarks, copyrights, and patents, which ensure that entrepreneurs have complete right over their intellectual assets. Underestimating the importance of IP protection can lead to long legal battles, brand infringement, and even financial loss.
Trademark registration – businesses are required to register their trademarks with the UAE Ministry of Economy in order to protect their name, logos, slogans, etc.
Copyright protection – any form of intellectual work by authors in the areas of literature, arts or science, regardless of description, form of expression, or purpose, can be protected if their rights are violated in the UAE
Industrial property – includes patents, utility certifications, industrial designs, and undisclosed information
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