UAE Treaty Company Formation

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UAE Treaty Company Formation and Requirements

The United Arab Emirates has rapidly expanded its treaty network to over 130 double taxation agreements, making it one of the world's most extensive treaty networks. The UAE's introduction of a 9% corporate tax from June 2023 (with 0% for qualifying free zone entities on qualifying income) has repositioned it as a hybrid jurisdiction offering both treaty access and competitive taxation.

UAE companies formed in mainland Dubai or Abu Dhabi are fully treaty eligible. Qualifying free zone companies under the Qualifying Free Zone Person regime can access the 0% rate on qualifying income while maintaining treaty access through the mainland UAE treaty network. The UAE also has no withholding tax on dividends, interest, or royalties paid to non-residents.

Corporate Tax Rate

A 9% corporate tax rate applies to taxable income above AED 375,000. Qualifying free zone entities maintaining the Qualifying Free Zone Person conditions are taxed at 0% on qualifying income and 9% on non-qualifying income.

Extensive Treaty Network

With over 130 treaties in force, the UAE provides reduced withholding tax access into jurisdictions across Africa, Asia, Europe, and the Americas, making it increasingly competitive with traditional treaty hubs.

No Withholding Taxes

The UAE imposes no withholding tax on dividends, interest, or royalties paid to non-residents. The participation exemption applies to dividends and capital gains from qualifying foreign shareholdings of at least 5% held for at least 12 months.

Substance Requirements

The UAE's Economic Substance Regulations require entities undertaking relevant activities (holding, finance, IP, headquarter activities) to demonstrate adequate physical presence, qualified employees, and decision making in the UAE.

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