Dubai has, since 2023, become the default offshore destination for Indian founders. The combination of zero personal income tax, the new corporate tax regime at nine per cent, geographic proximity, and visa pathways has produced a migration few capital structures see in a generation.
The structures available in the United Arab Emirates differ substantively. A field guide from the practice — including considerations the slick brochures omit.
The Three Structural Choices
Mainland Companies are licensed by the Department of Economic Development of the relevant Emirate and may conduct business anywhere in the UAE without geographic restriction. Since the 2020 amendments, 100 per cent foreign ownership is permitted in most activities. Mainland is the right choice if you serve UAE clients onshore.
Free Zone Companies are licensed by one of forty-plus free zones (DMCC, ADGM, DIFC, JAFZA, IFZA, RAKEZ, et al.). Each free zone has its own regulator, licensing regime, and corporate framework. Free zones offer 100 per cent ownership, zero customs duty on imports, and historically zero corporate tax — now nine per cent above AED 375,000 unless qualifying for incentive regimes.
Offshore Companies (RAK ICC, JAFZA Offshore) are not permitted to conduct business in the UAE; they are holding vehicles. Useful for asset structuring, IP holding, and group consolidation. Cheaper to maintain. No visa eligibility.
The Tax Reality in 2026
The much-touted \"zero tax\" Dubai of the 2010s is gone. Corporate tax of nine per cent now applies to profits exceeding AED 375,000 (approximately Rs. 84 lakhs). For most free zone entities, a Qualifying Free Zone Person regime offers zero tax on qualifying income — but the qualifying conditions are exacting and require careful structuring.
Personal income tax remains zero. VAT at five per cent applies to taxable supplies above AED 375,000 turnover. Customs duty at five per cent on most imports, with free zone exemptions.
Dubai is no longer a \"tax-free\" jurisdiction in the absolute sense. It is a low-tax jurisdiction with a sophisticated regime. Operating it correctly produces excellent outcomes; operating it carelessly invites the worst of both worlds.
The Visa Pathway
Most founder migrations are motivated by the visa as much as by the tax. Mainland or Free Zone company ownership entitles the shareholder/director to a residence visa — typically two or three years, renewable. The Golden Visa (10 years) is available for substantial investors, distinguished professionals, and entrepreneurs meeting specific thresholds.
For Indian founders, the practical sequence is: incorporate company, obtain Establishment Card, apply for Investor/Partner Visa, complete medical and Emirates ID, finally obtain residence stamp. Total timeline: 30 to 60 days from filing.
The Indian Side — Often Overlooked
Establishing in Dubai does not relieve the founder of Indian obligations until residency status changes. For Indian tax residency, the 182-day rule applies — physical presence in India during the financial year. Founders who structure for Dubai but continue to spend more than 182 days in India remain Indian tax residents on their worldwide income.
FEMA implications are equally significant. Outward remittance for share capital must follow Liberalised Remittance Scheme limits (USD 250,000 per financial year per resident individual). Beyond that, ODI (Overseas Direct Investment) regulations apply — with reporting, structure, and operational compliance requirements.
Banking — The Quiet Problem
UAE corporate banking has tightened materially since 2022. Account opening for new entities now takes 4 to 8 weeks, requires comprehensive KYC including source-of-funds documentation, and is increasingly selective. Some banks have effectively stopped accepting new mainland companies without substantial documented activity.
Our practice maintains relationships with several preferred banks. We brief clients on what each bank wants before incorporation — saving the common error of incorporating, then discovering the bank rejects the structure.
The Decision Framework
If you serve UAE clients onshore: Mainland. If you serve international clients and want premium prestige: DIFC or ADGM. If you serve international clients on a budget: IFZA or RAK. If you need pure holding without operations: RAK ICC Offshore. If you need an Indian tax-optimised structure: a hybrid of mainland with Indian holding — discussed only on a call.