UAE CORPORATE TAX

Free zone 0% or mainland 9%: what your UAE company pays

Short answer

A mainland company pays 0% on taxable income up to AED 375,000, then 9% above that.

A free zone company pays 0% only on Qualifying Income, and only if it meets the conditions.

By Sawan Kumar, Chartered Accountant (ICAI), Dubai. Facts checked against the linked sources on 2026-11-03.

The rates

0% on taxable income up to AED 375,000. Source
9% on taxable income above AED 375,000. Source
The rules apply to financial years starting on or after 1 June 2023. Source
Individuals pay Corporate Tax only if they run a business or business activity in the UAE. Source

A Qualifying Free Zone Person pays 0% on its Qualifying Income. Source
Its other taxable income is taxed at 9%. Source
Profit from a branch on the mainland or abroad is taxed at 9%. Source
A free zone licence alone is not enough. The business must meet the conditions in the FTA guide. Source

Every taxable person must register and get a Corporate Tax Registration Number. This includes free zone businesses. Source

This shows the rate bands only. Real taxable income depends on adjustments in the law.

Most mainland companies can be 100% foreign owned. Some strategic activities can still carry limits. Source

Is a free zone company always tax-free?

No. The 0% rate applies only to Qualifying Income of a Qualifying Free Zone Person. Other taxable income is taxed at 9%.

Do I need to register if I pay 0%?

Yes. The Ministry of Finance says all taxable persons, including free zone businesses, must register for Corporate Tax.

Can a foreigner own a mainland company?

For most activities, yes, up to 100%. Some activities of strategic importance can still carry ownership limits.