# UAE Free Zone Company Setup

> UAE free zones offer quick company setup with 100% foreign ownership. For corporate tax, a Qualifying Free Zone Person pays 0% on qualifying income and 9% on other income, provided it maintains adequate substance in the free zone, earns qualifying income, keeps non-qualifying revenue within the de minimis limit (5% of revenue or AED 5 million), prepares audited financial statements and doesn't elect for the standard regime.

Practice: UAE Business Services — https://www.industax.com/services/uae-business/

The 0% rate is not automatic. Selling directly to mainland customers, certain service income and weak substance can push a free-zone company into the 9% regime. Choosing the zone and contract structure with this in mind matters more than the licence fee.

We help select the zone, coordinate setup with partner agents, and keep the books, audit and corporate tax return aligned with the qualifying rules.

## Key facts

| Item | Detail |
| --- | --- |
| Ownership | 100% foreign |
| Qualifying income | 0% corporate tax |
| Other income | 9% |
| De minimis | Non-qualifying revenue ≤ 5% or AED 5 million |
| Requirement | Audited financial statements and adequate substance |

## Who needs this

- International trading and services businesses
- Holding and IP companies
- E-commerce and tech startups

## What's included

- Zone selection
- Setup via partner agents
- QFZP compliance plan
- Books, audit and tax returns

## Documents

- Passports
- Business plan
- Parent company documents

## Process

1. **Choose** — Zone matched to activities and customers.
2. **Form** — Licence and registrations.
3. **Qualify** — Substance, books and audit maintained.

Work that legally requires a licensed local adviser is signed by a partner professional; Indus Tax coordinates it.

## FAQs

### Can a free zone company sell to mainland UAE customers?

It can in many cases through distributors or permitted arrangements, but income from mainland transactions may not be qualifying income and could be taxed at 9%.

### Is an audit compulsory for free zone companies?

A Qualifying Free Zone Person must prepare audited financial statements to benefit from the 0% rate.

### Do free zone companies register for corporate tax?

Yes. All UAE companies, including free zone companies, must register for corporate tax and file returns.

## Official sources

- UAE Federal Tax Authority (EmaraTax): https://tax.gov.ae/
- UAE Ministry of Finance: https://mof.gov.ae/

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Canonical page: https://www.industax.com/services/uae-business/uae-free-zone-company-setup
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.