Doing Business in United Arab Emirates

Published 25 August 2026

In short

Indian businesses in the UAE choose between mainland setup (allows direct sales across UAE but requires local ownership rules) or free zone setup (simpler ownership, customs duty benefits, but restricted mainland sales). Both require activity approval, trade name registration, premises, trade licence, immigration file, residence and employment visas, bank account, corporate tax and VAT registration.

Key facts

Capital: Abu Dhabi
Currency: UAE Dirham (AED)
Trade with India: US$ 100.05 billion in FY 2024-25 (Consulate General of India, Dubai); India's exports US$ 36.63 billion, imports US$ 63.42 billion. The MEA bilateral brief of March 2025 recorded US$ 84 billion for FY 2023-24.
Indian community: About 4.3 million Indians live in the UAE, roughly 35 percent of the country's population and the largest single ethnic community, per the MEA India-UAE Bilateral Brief of March 2025.

The market

The UAE is a small domestic market of roughly ten million people that behaves like a very large one, because it is a re-export and logistics hub for the Gulf, East Africa, the Levant and parts of South Asia. Jebel Ali port and Dubai and Abu Dhabi airports let an Indian exporter hold stock close to buyers in twenty countries without setting up in each. Two way trade with India reached US$ 100.05 billion in FY 2024-25, with India’s exports at US$ 36.63 billion and imports at US$ 63.42 billion, according to the Consulate General of India in Dubai.

Why Indian businesses go there

Three reasons dominate. First, the India UAE Comprehensive Economic Partnership Agreement, in force since 1 May 2022, removed or is phasing out duties on the great majority of tariff lines, which changed the maths for gems and jewellery, textiles, engineering goods, chemicals and processed food. Second, the UAE has no personal income tax and only a 9 percent corporate tax above AED 375,000, so profits repatriate cleanly. Third, the flight time from most Indian metros is under four hours and banking, arbitration and courts operate in English.

The diaspora and business community

The MEA bilateral brief of March 2025 records 4.3 million Indians in the UAE, roughly 35 percent of the country’s population and the largest single ethnic group. That community is not only labour any more. About 35 percent are professionals, business owners and white collar staff. Practically, this means you can hire Malayalam, Gujarati, Hindi, Tamil or Telugu speaking staff, find Indian chartered accountants and lawyers, and sell to Indian owned distributors who already understand Indian payment terms. Chambers such as the Indian Business and Professional Council and the many state and linguistic associations are genuine deal sources.

Sector strengths

Gold and jewellery, oil and petrochemical trading, food re-export, construction materials, logistics and freight forwarding, fintech and payments, and increasingly technology services and family office work through DIFC and ADGM. Dubai has become a serious base for Indian promoters running holding structures and global sales teams.

The honest difficulties

Cost is the first shock. Office rent, school fees, health insurance and visa renewals mean the real cost of putting one family on the ground is far above the headline licence fee. Free zone licences look cheap until you add establishment card, immigration file, medical tests, Emirates ID and mandatory insurance. Second, free zone companies cannot sell freely into the UAE mainland without a mainland distributor or a branch, which surprises many first timers. Third, while the 2021 Commercial Companies Law removed the blanket 51 percent local shareholder rule for most activities, some strategic activities still carry Emirati ownership or agency requirements, and commercial agency law can make it very hard to change a distributor once appointed. Get legal advice before signing any exclusive agency. Fourth, compliance load has grown fast. Corporate tax registration on EmaraTax, VAT at 5 percent above the registration threshold, ultimate beneficial owner filings, economic substance reporting and anti money laundering rules all now apply, and penalties are real. Fifth, banks are cautious. Opening a corporate account for a new company with no UAE trading history can take weeks and often needs the founder present. Plan for that in your cash flow.

How to apply

Decide mainland or free zone. Mainland lets you sell and bid anywhere in the UAE; a free zone gives simpler ownership, customs duty suspension and easier repatriation but restricts direct mainland sales.
Pick the emirate and the licensing authority. Dubai's Department of Economy and Tourism and Abu Dhabi's Department of Economic Development licence mainland companies; free zone authorities such as DMCC, JAFZA, DAFZA, SHAMS, IFZA and RAKEZ licence their own.
Choose your business activities from the authority's approved activity list, because the activity code decides ownership rules, approvals and later visa quota.
Reserve the trade name and obtain initial approval from the same authority, plus any external approval needed for regulated activities.
Draft and notarise the Memorandum of Association for a mainland LLC, or sign the free zone authority's standard incorporation documents.
Take physical premises and register the tenancy. Dubai mainland needs an Ejari registered lease; free zones offer flexi desks, offices or warehouses. The premises size drives your visa quota.
Collect the trade licence and, for a mainland company, the commercial registration certificate and Chamber of Commerce membership.
Open the immigration file and obtain the establishment card from the General Directorate of Residency and Foreigners Affairs of the emirate, and register as an employer with the Ministry of Human Resources and Emiratisation for mainland companies.
Apply for the investor or partner residence visa and then employment visas, each of which needs an entry permit, medical fitness test, Emirates ID biometrics and visa stamping.
Open the corporate bank account. Expect compliance questions on source of funds, the Indian parent's accounts and expected transaction flows.
Register for corporate tax with the Federal Tax Authority on the EmaraTax portal, which every taxable person must do including free zone companies claiming the 0 percent qualifying rate.
Register for VAT with the Federal Tax Authority if taxable supplies exceed AED 375,000 in twelve months, and voluntarily above AED 187,500.
File the ultimate beneficial owner register with your licensing authority and complete economic substance notification and reporting if you carry on a relevant activity.
If you import goods, register with the emirate's customs authority for a customs client code and set up your CEPA certificate of origin process with DGFT in India so your buyers get the preferential duty.

What the trade actually looks like

→ India sells

Petroleum productsRefined product exports are consistently one of the largest single lines in India's basket to the UAE (MEA bilateral brief, March 2025).
Gems, jewellery and precious metalsCEPA cut UAE duty on Indian jewellery and gave Indian gold importers a tariff rate quota, so this trade runs both ways.
Cereals, rice, fruit, vegetables, tea, meat and seafoodThe UAE is a food deficit market and re-exports Indian food across the Gulf and East Africa.
Textiles, garments, cotton and yarnListed by MEA among India's major export items; benefits from CEPA duty elimination.
Engineering goods and machineryIncludes auto components, electrical equipment and construction machinery.
ChemicalsOrganic and inorganic chemicals feed UAE processing and re-export trade.

← India buys

Crude oil and petroleum productsThe UAE is India's fourth largest source of crude oil (MEA bilateral brief, March 2025).
LNG and LPGThe UAE is India's second largest source for both LNG and LPG.
Gold and other precious metals, stones and jewelleryCEPA gives India a tariff rate quota on gold imports from the UAE at a concessional duty.
Chemicals and petrochemicalsFeedstock and intermediates for Indian processing industry.
Wood and wood productsListed by MEA among India's major import items from the UAE.

Treaties and agreements with India

India UAE Comprehensive Economic Partnership Agreement (CEPA) Signed 18 February 2022, in force 1 May 2022

The core commercial change. It eliminates or phases out UAE duty on the large majority of Indian tariff lines and gives Indian exporters preferential access if they meet the rules of origin and file a certificate of origin through DGFT's common digital platform. It also covers services, government procurement and digital trade.

India UAE Bilateral Investment Treaty (BIT) Signed 13 February 2024, came into effect in 2024

Replaces the lapsed 2013 investment protection arrangement. It gives Indian investors in the UAE, and UAE investors in India, treaty level protection against expropriation without compensation and access to investor state dispute settlement after exhausting local remedies for a defined period. Useful if you are putting real capital into assets.

Double Taxation Avoidance Agreement Signed 29 April 1992, in force 22 September 1993

Stops the same income being taxed in both countries and caps withholding tax on dividends, interest and royalties. With UAE corporate tax at only 9 percent, the practical benefit for Indian owners is mainly certainty on residence, permanent establishment and capital gains treatment rather than rate relief.

RBI and Central Bank of the UAE Local Currency Settlement MoU 2023

Allows cross border trade transactions to be invoiced and settled in Indian Rupees and UAE Dirhams instead of only US dollars. Settlements have already happened in gold, crude oil and food products. For an exporter it can cut currency conversion cost and dollar clearing delays.

Which company type to use

Mainland Limited Liability Company (LLC)	The standard trading vehicle. Since the 2021 amendments to the Commercial Companies Law, 100 percent foreign ownership is allowed for most activities, though some strategic activities still require Emirati participation.
Free Zone Company (FZ-LLC, FZE or FZCO)	Wholly foreign owned, incorporated under the rules of a specific free zone. Good for trading, holding and services. Cannot sell directly into the mainland without a distributor or branch.
Branch of a foreign company	An extension of your Indian company rather than a separate legal person. Useful for service contracts and project work; the Indian parent carries the liability.
Sole Establishment or Civil Company	For professionals such as consultants, engineers and doctors. The owner has unlimited liability, so it is rarely right for a trading business.
DIFC or ADGM company	Common law financial free zones with their own courts and regulator. Used for funds, fintech, holding companies and family offices rather than physical trade.
Offshore company (JAFZA Offshore or RAK ICC)	Holding and asset ownership vehicle. No residence visas, no UAE office, and it cannot trade inside the UAE.

Visas and tax

Getting yourself there

An Indian founder normally takes an investor or partner residence visa issued through the mainland licensing authority or the free zone, valid two to three years and tied to the company licence. Staff get employment visas sponsored by the company through MOHRE and the emirate immigration department. Longer self sponsored options are the ten year Golden Visa and the five year Green Visa. Every route needs a medical fitness test and an Emirates ID.

What you will pay

Federal corporate tax applies at 0 percent on taxable income up to AED 375,000 and 9 percent above that, for financial years beginning on or after 1 June 2023. A qualifying free zone person can still get 0 percent on qualifying income but must register and file. A 15 percent Domestic Minimum Top-up Tax applies to large multinational groups from 1 January 2025. VAT is 5 percent. There is no personal income tax. A Double Taxation Avoidance Agreement with India exists, signed on 29 April 1992 and in force from 22 September 1993.

Indian government support for this market

Federation of Indian Export Organisations (FIEO)

The apex body for Indian exporters under the Department of Commerce. It issues Registration cum Membership Certificates, runs buyer seller meets and trade delegations to Dubai and Abu Dhabi, and helps members interpret CEPA rules of origin and documentation. For a first time exporter it is usually the cheapest way to get a verified buyer list.

Gem and Jewellery Export Promotion Council (GJEPC)

The sponsored council for India's largest single export line to the UAE. It runs India International Jewellery Show buyer programmes, helps members use the CEPA duty concessions and the gold tariff rate quota, and issues Kimberley Process certificates for rough diamonds. Membership is effectively mandatory for serious jewellery exporters.

Trade Connect ePlatform, DGFT and Department of Commerce

A single window portal launched on 11 September 2024 that links Importer Exporter Code holders to Indian missions abroad, export promotion councils and trade experts. It carries country and product guides, FTA benefit lookups and an Ask an Expert facility, which is the fastest way to check whether your HS code gets a CEPA concession.

ECGC Limited

The government owned export credit insurance company. It covers commercial and political risk on your UAE receivables and supports banks in giving you packing credit at better rates. Useful because Gulf buyers often expect open account or long credit terms that an Indian MSME cannot otherwise carry.

Frequently asked questions

What is the difference between mainland and free zone business in UAE

Mainland lets you sell and bid anywhere in UAE but follows local ownership rules. Free zones offer simpler ownership, customs duty suspension and easier profit repatriation but restrict direct mainland sales without a distributor.

How much corporate tax do I pay on business profit in UAE

UAE charges 9 percent corporate tax on profits above AED 375,000 per year. Free zone companies claiming the 0 percent rate must still register with the Federal Tax Authority and meet economic substance requirements.

What are the main costs to set up a business in UAE

Beyond the licence fee, expect significant costs for office rent, establishment card, immigration file, medical tests, Emirates ID, mandatory insurance, visa renewals and bank account setup. Banks often require the founder to be present.

Can a free zone company sell directly to mainland customers in UAE

No. Free zone companies cannot sell freely into the UAE mainland without either appointing a mainland distributor or establishing a mainland branch, which surprises many first-time business owners.

What visas do I need as a business owner in UAE

You need an investor or partner residence visa, then employment visas for staff. Each requires an entry permit, medical fitness test, Emirates ID biometrics and visa stamping at the General Directorate of Residency and Foreigners Affairs.

Why do Indian businesses choose UAE over other countries

The India-UAE Comprehensive Economic Partnership Agreement (since May 2022) removed duties on most goods. UAE has no personal income tax, only 9 percent corporate tax, four-hour flight time from India, English-language banking and courts, plus 4.3 million Indian expatriates as potential staff and business partners.

Before you apply: confirm every date, fee and eligibility rule on the official website linked on this page. Public and Policy is an independent portal, not a government body, and details change without notice.