Dubai Company Formation: 7 Key Things Indians Should Check in 2025
Table of Contents
Introduction
A lot of Indians are setting up companies in Dubai because of its tax-free benefits and ease of doing international business compared to India. But before you jump in, here are the 7 most important things you should check before registering a company in Dubai from India.
Understanding UAE Tax Rates (Freezone vs Mainland)
One of the biggest reasons Indians prefer Dubai is its business-friendly tax system. Until recently, there was zero corporate tax. But since June 2023, a 9% corporate tax applies to profits above 375,000 AED (around ₹84 lakhs).
The good news? Many businesses can still legally avoid this tax with various exemptions. Also, VAT at 5% applies only to mainland companies making sales in the Gulf region—not on international sales.
So, many businesses choose freezones over mainland setups to minimize taxes. Freezone companies get tax exemptions but can’t sell directly to UAE retail customers.
Documents Needed for Dubai Company Registration
Setting up a company in a Dubai freezone is simple. You’ll need:
Your company name
Passport copies of directors
Passport-size photos
You don’t need a second shareholder—a single person can own an LLC. If you’re setting up a branch or subsidiary, additional documents like the Memorandum of Association (MoA), Articles of Association (AoA), and board resolutions may be needed.
How Long Does It Take to Register a Company?
It takes about 2-3 weeks to complete the process—and you can do it remotely! Once the company is registered, you’ll need to visit Dubai to:
Get your UAE Residence VISA & Emirates ID
Open a bank account
After that, you can run everything online using internet banking from anywhere in the world.
Cost of Setting Up a Dubai Company
Costs vary depending on the freezone you choose. On average, it costs ₹2.4 lakhs per year, covering:
License fees
Virtual office space
Visa charges
Mainland setups cost more but are better if you want to do business inside the UAE. If your clients are mostly outside the UAE, a freezone company makes more financial sense.
Key Difference:
Mainland companies can sell in the UAE but must pay 9% corporate tax.
Freezone companies get tax benefits but can’t sell directly in the UAE market.
Can You Run a Dubai Business Remotely?
Yes! Running a Dubai-based business is easy:
Operate your UAE bank account online
Do transactions in multiple currencies (without forced conversions)
Minimal compliance & paperwork
However, since June 2023, all companies must register for corporate tax and file annual tax returns, even if they qualify for 0% tax.
Pro Tip: Partner with a Dubai accounting firm to stay compliant with tax laws.
Will India Tax Your Dubai Company Profits?
Whether India taxes your Dubai income depends on where the directors live.
If Directors Live Outside India:
India can’t tax the Dubai company or its directors.
If Directors Live in India:
Turnover above ₹50 Cr: The company is treated as an Indian entity, and India taxes both corporate & director income.
Turnover below ₹50 Cr: The company remains a non-resident for tax purposes, so only the director’s income is taxed, not the company’s profits.
Compliance for Indian Residents
If an Indian resident owns a Dubai company, they must:
Disclose shareholding details in their Indian Income Tax Return (ITR).
In some cases, notify the RBI under Liberalized Investment Scheme (LIS) or Overseas Direct Investment (ODI) Scheme.
Pro Tip: Work with a tax consultant familiar with both Indian & UAE regulations to avoid legal issues.
Conclusion
Dubai is an amazing hub for Indian entrepreneurs who want to expand internationally while enjoying tax benefits. But picking the right freezone, understanding compliance rules, and structuring your company properly is key to long-term success.
Need help setting up your Dubai business? GenZone has got you covered!
