How Indian Businesses Can Set Up in the UAE (2025 Guide)

A step-by-step guide for Indian companies to set up business in the UAE. Learn about mainland vs free zone entities, licenses, top emirates, CEPA trade benefits, and case studies of Indian firms in Dubai, Abu Dhabi, and Sharjah.

Why the UAE is attractive to Indian investors

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The UAE is a diversified, pro-business economy with world-class logistics and a deep talent pool. GDP reached about US$537 billion in 2024, and non-oil growth has been running strong on tourism, finance, construction, and manufacturing, with overall real GDP growth close to 4 percent in 2024 per the World Bank.

Policy pillars that matter to Indian investors:

• Company ownership: 100 percent foreign ownership is permitted on the mainland for most activities (no 51/49 sponsor requirement).
• Tax: 0 percent CT up to AED 375,000 and 9 percent corporate tax above that; 0 percent for “Qualifying Income” of a Qualifying Free Zone Person (QFZP); VAT is 5 percent. Large multinationals are also subject to a 15 percent top-up (DMTT) from 2025.
• Free zones: 40+ sector-focused free zones with streamlined customs and operating benefits.
• CEPA with India (2022): Broad tariff elimination across both sides, with detailed Rules of Origin and services commitments – use the official schedules and PSRs when planning bill of materials and sourcing.

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Mainland vs Free Zone vs Financial Centers 

1. Mainland (onshore)

Operate anywhere in the UAE and trade directly with the local market. Licenses issued by each emirate’s economic department (e.g., Dubai DET, Abu Dhabi DED/ADDED, Sharjah SEDD).

1. Free Zones

Designed for specific sectors (logistics, e-commerce, media, manufacturing, tech, etc.), offering quick set-up, customs efficiencies, and in the corporate-tax domain—access to 0 percent on qualifying income if you meet Qualifying Free Zone Person (QFZP) rules (maintain adequate substance, derive income from transactions with other Free Zone persons and income from “Qualifying Activities” with non-Free Zone persons, adhere to de minimis requirements, comply with transfer pricing rules, etc.).

1. Financial Free Zones

• DIFC (Dubai): Independent common-law system, regulated by DFSA—a hub for asset managers, banks, insurers, and fintech entities. Company count reached ~7,700 in H1 2025.
• ADGM (Abu Dhabi): Direct application of English common law; regulated by FSRA; scale-up magnet close to Abu Dhabi’s sovereign funds; companies up 42 percent YoY in H1 2025.

Quick rule of thumb:

• Want UAE-wide retail or government contracts?
  Consider mainland.
• Focused re-exports, light manufacturing, or e-commerce?
  A free zone near your port/airport.
• Asset management, fintech, family offices?
  DIFC/ADGM.

Also Read: Choosing Between Keeping UAE Company Dormant or Close It

Entity types and license requirements

Common legal forms (availability varies by jurisdiction)

• LLC (Limited Liability Company) – standard trading/industrial vehicle on the mainland.
• Sole Establishment / Civil Company – for some professional services.
• Branch – of a foreign company (no separate share capital).
• Free Zone Company/Establishment – FZ-LLC, FZE, etc.
• DIFC/ADGM – special forms for funds, fund managers, holding companies, etc.

License types

License families (everywhere in the UAE): Commercial (trading), Professional/Services, Industrial (manufacturing).

No matter whether you set up in Dubai, Abu Dhabi, Sharjah, or the northern emirates, every business license generally falls into one of three main families:

1. Commercial License
   • For trading and general commercial activities.
   • Covers wholesale, retail, import–export, e-commerce, and distribution businesses.
   • Example: An Indian FMCG distributor importing packaged food into the UAE for re-export.
2. Professional (or Service) License
   • For service providers and professionals.
   • Includes consultancy, IT/ITES, engineering services, marketing, healthcare, education, etc.
   • Example: An Indian IT firm opening a software development or outsourcing unit.
3. Industrial License
   • For manufacturing and industrial activities.
   • Covers factories, light/heavy manufacturing, processing, assembly, and packaging.
   • Example: An Indian textile company setting up a garment manufacturing unit in Sharjah or Ras Al Khaimah.

Some emirates or free zones also add niche categories (like tourism licenses, media licenses, or e-commerce-specific licenses.

Corporate tax pointers

• Mainland: 9 percent above AED 375k.
• Free zones: aim for QFZP status to benefit from 0 percent on qualifying income; check Cabinet Decision/Ministerial Decision guidance and align your activity, customer mix, and substance.

Best locations by emirate (Dubai, Abu Dhabi, Sharjah, northern emirates)

Dubai

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• JAFZA (Jebel Ali Free Zone): Next to the Middle East’s largest port—ideal for logistics, manufacturing, and re-exports across 170+ routes.
• DMCC (Dubai Multi Commodities Centre) located in Jumeirah Lakes Towers (JLT): One of the most popular zones for international investors because it combines office towers, retail, and residential clusters with a dedicated trade ecosystem. DMCC is positioned as the world’s largest free zone for commodities trade (gold, diamonds, tea, coffee, energy), but over the years it has also diversified into technology, fintech, blockchain/crypto, and general SME setups. It hosts around 3900-4000 Indian companies; nearly 16 percent of its total membership is from Indian companies. In the first half of 2025, DMCC reported record new company registrations, with a significant proportion being Indian firms. This reflects strong momentum as Indian businesses use DMCC to tap UAE–India CEPA tariff benefits, leverage Dubai’s logistics, and gain a global platform for commodities and tech trade.
• DIEZ (DAFZ, DSO, CommerCity): Airport-adjacent trade, electronics/semis, and e-commerce ecosystems.
• DIFC: Regional HQ for finance, wealth, and funds (7,700 entities, hedge funds up sharply).
• Fresh facilitation: Dubai announced a “One Freezone Passport” to let a company licensed in one Dubai free zone operate across others in the emirate—useful for scale.

Best-fit Indian sectors: gems and jewelry, food-FMCG re-exports, pharma distribution, cross-border e-commerce, fintech, funds, family offices, SaaS.

Abu Dhabi

• KEZAD (Khalifa Economic Zones) and Khalifa Port – large plots, clustering for industrials, cold-chain, and 3PL.  
• ADGM (Al Maryah/Reem): Funds, asset management, private capital; English common law; proximity to ADIA, Mubadala, ADQ is a draw – companies up 42 percent YoY in H1 2025.
• Masdar City: Clean-tech, climate solutions, R&D.

Best-fit Indian sectors: advanced manufacturing, EV components, clean energy, aerospace MRO, capital markets and fund management.

Sharjah

• SAIF Zone and Hamriyah Free Zone: value-for-money warehousing, industrial land, and access to Sharjah and Dubai markets; SEDD handles mainland licenses.

Best-fit Indian sectors: cost-sensitive fabrication, packaging, furniture, plastics, paper, regional distribution.

Northern emirates

• RAKEZ (Ras Al Khaimah): industrial plots, building materials, SME-friendly.
• Ajman Free Zone, UAQ FTZ: competitive costs for light industry and services.
• Fujairah Free Zone/Creative City: East-coast port access and media. (Use as satellite hubs if costs/footprint matter.)

Step-by-step process to set up

1. Choose jurisdiction and activity (mainland vs free zone vs DIFC/ADGM). Check the emirate’s activity list to match your scope.
2. Reserve trade name and initial approval (DET/ADDED/SEDD or free-zone authority).
3. Draft constitutional docs (MOA/AOA); lease registered premises (flexi-desk, office, or warehouse).
4. Final license issuance (commercial/professional/industrial).
5. Open bank account, register for tax (VAT if applicable) and UAE Corporate Tax (from 2023 rules).
6. Immigration and visas (investor, staff; some zones link visa quota to space).
7. If manufacturing: obtain Industrial Production License from MoIAT for customs duty exemptions on machinery and inputs.
8. For regulated sectors (finance, health, education, media), secure regulator approvals (e.g., DFSA/FSRA for finance).

Costs, timelines, and compliance (What to expect)

• Setup speed: Many free-zone licenses can issue within days once KYC/lease is done; mainland varies by activity and approvals.
• Ongoing: Annual license renewal, office lease, economic substance (if applicable), VAT filings, and corporate tax compliance post-2023.
• If targeting 0 percent CT in a free zone: Align with QFZP guidance (qualifying activities, substance, “excluded activities,” and connected-party rules). Update your contracts and customer routing accordingly.

Fast match: Emirate x objective

• Pan-UAE retail, public tenders: Mainland Dubai or Abu Dhabi (DET/ADDED).
• Port-led re-exports and bonded warehousing: JAFZA (Jebel Ali) or KEZAD/Khalifa Port.
• B2B e-commerce and electronics: DSO/CommerCity (DIEZ) or DMCC.
• Funds/fintech/family offices: DIFC or ADGM.
• Cost-efficient manufacturing/packing: Sharjah (SAIF/Hamriyah), RAKEZ, Ajman/UAQ.

Practical checklist for Indian companies

1. Decide target market (UAE domestic vs re-exports) → choose mainland/free zone accordingly.
2. Map CEPA to your HS codes and PSRs; build a CEPA-compliant BoM.
3. Pick the zone nearest your trade lane (Jebel Ali, Khalifa Port, DWC, airports).
4. Tax design: If free zone, assess QFZP feasibility; if mainland, model 9 percent CT and 5 percent VAT.
5. Licensing and premises: Secure initial approvals, MOA, and lease; issue license (DET/ADDED/SEDD or zone authority).
6. Banking and visas: Align KYC with your ownership structure; plan investor/staff visas (quota often linked to space).
7. If industrial: Apply MoIAT industrial license to unlock duty exemptions on machinery/inputs.
8. If financial/regulated: Budget time for DFSA/FSRA processes.

CEPA benefits for Indian exporters

• Tariff cuts: Broad elimination of customs duties under Annex 2A/2B; model your landed cost for top SKUs accordingly.
• Rules of Origin (ROO): Follow Chapter 3 and PSRs (product specific rules) for value-addition and CTC requirements; leverage bilateral cumulation for India–UAE content.
• Services access and mobility: Commitments in Chapter 8 support IT/ITES, consulting, and professionals via defined schedules – useful for Indian HQs deploying teams.

Tactical play: Manufacture/light-assemble in a UAE free zone, qualify under CEPA ROO, and re-export to the GCC/Africa while keeping QFZP status for tax efficiency (mind the QFZP customer/transaction rules).

Examples of Indian companies in the UAE

Related Reading

Where Indian ODI is rising: Key Middle East markets

• Dubai: Indian firms are the largest foreign business community, leading new memberships at the Dubai Chamber of Commerce (e.g., Q1 2024 and H1 2025 analyses). DMCC alone counts ~3,900–4,000 Indian companies (~16 percent of members).
• Financial hubs: Company numbers are surging in DIFC and ADGM, underpinning growth in funds, family offices, and capital-markets activity.

Summary

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For Indian businesses, the UAE is both a market and a launchpad – a place to consolidate GCC/Africa supply chains, run CEPA-optimized production and distribution, and raise regional capital. The right choice of jurisdiction, zone, and tax posture – plus a CEPA-aligned sourcing plan – can cut landed costs, reduce lead times, and accelerate revenue.

Also Read: Why the Middle East is Emerging as a Top Destination for Indian Outbound Investment

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