UAE Corporate Tax Consultants: What You Should Look out in Dubai for 2025
22/11/2025
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Launching a startup in Dubai or any other emirate is no longer just about product, pitch decks, and runway. Since the UAE corporate tax regime came into effect, every founder also needs to understand how corporate tax fits into their business model, funding strategy, and long-term exit plans.
The good news? The system is designed to support startups, especially tech startups and innovation-driven businesses, with tools like Small Business Relief, a preferential corporate tax rate, and a flexible tax regime that still keeps the UAE one of the most attractive business hubs in the world.
This guide walks you through how the rules work, why Small Business Relief is so important up to December 2026, and how smart tax planning can even become a competitive edge for your company.
The UAE has introduced a modern corporate tax framework that applies to taxable persons carrying on a business in the United Arab Emirates. This is a new tax on taxable income, not on revenue, and it sits alongside existing regimes like VAT.
Key features:
• A standard corporate tax rate of 9% on taxable income above AED 375,000
• A 0% band up to AED 375,000 to ease the burden on SMEs and early-stage businesses
• Application from tax periods beginning on or after June 2023 (your first in-scope tax year depends on your financial year)
Compared with the previous tax environment where profits were mostly untaxed, this is a big change. But it’s not designed to punish founders – it’s about aligning with global standards while keeping the UAE’s tax environment attractive for global business.
One of the biggest attractions of setting up in a UAE Free Zone is the corporate tax benefit. Under the UAE corporate tax regime, a Qualifying Free Zone Person can enjoy 0% corporate tax on qualifying income, while only non-qualifying income is taxed at 9%. On top of this, eligible smaller businesses may access Small Business Relief, which can further reduce or eliminate corporate tax in the early years. Combined with simplified setup, 100% foreign ownership, and strong infrastructure, Free Zones give startups and SMEs a tax-efficient base to grow while still staying fully compliant with UAE corporate tax rules.
For corporate tax purposes, the law looks first at whether you are a resident person and whether you are a taxable person.
You are usually in scope if:
• You operate a startup in Dubai or elsewhere in the UAE under a mainland licence
• You run free zone companies in one of the UAE free zones
• You have derived any taxable income from business activities in the UAE
A resident person is typically taxed on income from both UAE and foreign sources (with exemption or foreign tax relief in specific cases). Non-residents may be taxed on UAE-sourced income or income attributable to a permanent establishment.
For founders, this means: if you are running a real business, issuing invoices, hiring staff, or onboarding customers in the UAE, you most likely have corporate tax obligations, even if your final tax rates are 0% because of relief.
The small business relief scheme is the standout feature for early-stage startups.
If you qualify and elect for Small Business Relief, you are treated as having no taxable income for that tax period. That means:
• You are still part of the tax regime
• But your taxable income is deemed to be zero
• So you pay 0% corporate tax, even if you would otherwise be in the 9% band
This relief is available only for certain available for tax periods up to 31 December 2026 / December 2026, subject to the rules.
To use the relief, your total revenue for the current tax period and all relevant and previous tax periods must not exceed AED 3 million. This threshold is critical:
• Stay at or below AED 3 million → Small Business Relief can apply
• Cross AED 3 million in any period → you move into full corporate tax calculation from then on
Beyond that point, your profits are taxed at 0% up to AED 375,000, and 9% thereafter – unless you benefit from other reliefs or exemption rules.
Strategically, you should consider:
• How quickly your revenue will move towards the AED 3 million line
• Whether it makes sense to apply for Small Business Relief in your earliest years
• How this interacts with losses you might want to have carried forward into future years of tax
This is where founders often need a tax advisor to map out scenarios and avoid using the relief in a way that blocks more valuable tax planning later.
Corporate tax relief for Dubai startups is mainly delivered through the UAE’s Small Business Relief and 0% tax band on the first AED 375,000 of taxable income. If a startup’s revenue stays within the AED 3 million threshold (for eligible tax periods), it can elect Small Business Relief and be treated as having no taxable income—meaning no corporate tax is payable while still staying compliant. This gives founders breathing room to focus on growth, product, and fundraising before moving into the standard 9% corporate tax rate as the business scales.
In the UAE you have three broad structural paths:
A typical mainland business in Dubai is a straightforward resident person. It will:
• Use the 0% / 9% tax rates depending on taxable income
• Be able to apply Small Business Relief if it meets the threshold
• Benefit from the UAE’s strong tax environment, foreign ownership and access to markets, and ownership and access to local customers and access to local talent
This route suits many dubai startups that are customer-facing and expect to grow quickly.
Free zone companies benefit from ecosystems tailored for technology startups, trading firms, media, logistics, and more. They are still part of uae corporate tax law, but their treatment depends on whether they are a standard free zone entity or a qualifying free zone entity.
A qualifying free zone person is a free zone entity that meets strict conditions on:
• Substance (real presence, staff, and activities in the free zone)
• Undertaking qualifying income activities
• Adhering to transfer pricing and other rules
If you achieve and maintain QFZP status, you may enjoy:
• A 0% rate on qualifying income
• 9% on non-qualifying income or income from outside the free zone
This is powerful for startups and innovation-based businesses that fit neatly into free zone activities and expect to scale quickly, including those in Dubai Silicon Oasis or Dubai Internet City.
But if you are very small and below the AED 3 million line, plain Small Business Relief might be simpler and give you comparable or better corporate tax benefits in your first years of tax.
Many founders only think about tax when an investor, bank, or the Federal Tax Authority (FTA) asks for information. By then, it’s often stressful. A cleaner approach is to build tax compliance into your operations.
Once you’re in scope as a taxable person, you must register with the federal tax authority. That means:
• Applying for tax registration
• Getting your registration approval in time for your first tax period
• Ensuring your profile is kept up to date if your activities, ownership or structure change
Ignoring this step risks penalties and a difficult audit later.
For proper corporate tax calculation you must:
• Prepare accurate financial statements in line with acceptable standards
• Track revenue and expenses clearly in AED
• Identify what forms part of taxable income and what may fall under exemption or adjustments
This is especially important for tech startups and innovation-driven businesses that may have complex revenue models (subscriptions, freemium, foreign users, etc.).
Some founders confuse VAT and corporate tax:
• VAT is charged on supplies and collected from customers; you pay/net off VAT with the authorities
• Corporate tax is a direct tax on your net profits for each tax period
A startup may be registered for VAT because of turnover, but also separately in scope for uae corporate tax when it is a taxable person. Both must be managed properly.
If you pay related parties – your own holding company, foreign investors, or sister entities – you must respect transfer pricing rules. These require arm’s-length pricing and proper documentation, especially as you grow.
Getting this wrong can affect:
• How much taxable income is reported in the UAE
• Whether your tax return stands up to scrutiny in an audit
• Your ability to claim relief for foreign tax in some situations
Handled correctly, UAE corporate tax can actually strengthen your business:
• Tax benefits & incentives such as Small Business Relief, tax holidays, and special regimes for qualifying free zone person status show investors you know how to manage risk and cash flow.
• A clear corporate tax framework and robust tax compliance reassure lenders, acquirers, and regulators.
• Operating in a respected tax landscape with a defined standard rate and transparent tax regulations helps you integrate into global business ecosystems more easily.
For dubai startups aiming to scale regionally or globally, being able to demonstrate a mature tax profile is now part of your brand – just like your product and team.
Ready to startYou’re entering a market that combines global connectivity, founder-friendly regulations, and strong tax advantages. With 0% tax on profits up to AED 375,000, generous tax exemptions, and targeted reliefs for small businesses, relief is available for tax periods where startups qualify, and companies can access favourable tax rates if they meet the relevant thresholds instead of paying full tax from day one. By choosing the right structure, planning for future tax developments, and staying compliant with UAE corporate tax, you help your business stay investment-ready, competitive, and positioned for long-term growth in one of the world’s most dynamic hubs.
To understand your corporate tax obligations, you first need to know where your business is registered, what income is taxable, and which tax rules apply to your sector and size. This includes identifying whether you’re a resident company, checking applicable tax rates and thresholds, registering with the tax authority, maintaining proper accounts, and filing returns on time. Once you map these basics—who is taxed, on what, at what rate, and by when—you can avoid penalties, stay compliant, and plan your cash flow and tax strategy more confidently.
At Young & Right Accounting & Tax Consultancy, we specialise in uae corporate tax law and work closely with startups must deal with fast growth, tight runway, and cross-border plans.
We help you:
• Choose between mainland, free zone, and qualifying free zone structures, taking into account foreign ownership and access to markets
• Decide if and when to use Small Business Relief, how to manage the AED 3 million threshold, and how to protect losses that could be carried forward
• Implement systems for financial statements, VAT, and corporate tax that work for your team instead of slowing you down
• Design strategic tax roadmaps that support fundraising, expansion outside the free zone, and potential exits
• Prepare and file your tax return accurately so you can pay corporate tax correctly – or legitimately pay 0% where exemption or relief applies
Our goal is simple: we support startups so that tax becomes a controlled variable, not a last-minute crisis.
The UAE’s tax environment is evolving, but it remains uniquely favourable to entrepreneurs. With tools like the small business relief scheme, a predictable corporate tax rate, and advantages for qualifying free zone person structures, founders still enjoy strong tax benefits and corporate tax benefits compared with many other jurisdictions.
To stay ahead, every startup in Dubai and across the UAE should:
Understand when they become a taxable person under uae corporate tax
Monitor revenue against the AED 3 million threshold for Small Business Relief
Keep clean financial statements and documentation, ready for investor reviews and possible audit
Use expert guidance to align tax incentives with long-term strategy
With the right planning and partners like Young & Right, corporate tax doesn’t have to be a burden. It can be part of a smarter, more credible, and more resilient foundation for your startup’s journey from seed stage to scale-up – and eventually, to a successful exit in one of the world’s most exciting business destinations.
Let us help you structure your business for tax efficiency and growth.
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