Tax Implications of Mainland Company Formation in Dubai, UAE
                     Tax Implications of 
Mainland Company 
Formation in Dubai
Introduction 
Dubai’s business-friendly environment and strategic location 
make it a prime destination for entrepreneurs and investors. One 
of the key considerations for any business setup is the tax 
structure. Understanding the tax implications is essential for 
mainland company formation in Dubai, UAE, and can help 
businesses plan eff ectively.
Key Taxes to Consider During Mainland 
Company Formation in Dubai, UAE:
Corporate Tax Value-Added Tax (VAT) Customs Duty
Corporate Tax
Eff ective from June 2023, businesses undergoing mainland company 
formation in Dubai, UAE, are subject to a federal corporate tax of 
9% on profi ts exceeding AED 375,000. This tax brings Dubai in line 
with international tax standards, providing transparency while 
maintaining a competitive business environment. Small and 
medium-sized enterprises (SMEs) with profi ts below this threshold 
are exempt, allowing them to grow without immediate tax liabilities. 
Value-Added Tax (VAT)
In addition to corporate tax, mainland companies in Dubai must also 
comply with the 5% Value-Added Tax (VAT) imposed on goods and 
services. Any business with an annual turnover exceeding AED 
375,000 must register for VAT. This requirement makes it essential to 
consider VAT during your fi nancial planning when undergoing 
mainland company formation in Dubai, UAE. Accurate record-keeping 
and timely fi ling of VAT returns are vital to avoid penalties. 
Customs Duty
Companies involved in the import and export of goods must also 
consider customs duties as part of their operational costs. 
Generally, Dubai imposes a 5% customs duty on most imports, but 
certain categories of goods may be exempt or taxed at reduced 
rates, especially those coming from Gulf Cooperation Council (GCC) 
countries. 
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