End of service (EOSB)
21 days of basic wage per year (years 1 to 5), 30 days per year thereafter, capped at 2 years of total wage. Basic salary only. Pay within 14 days of termination.
Emiratisation
Establishments with 50+ employees must raise Emirati headcount by 1% each half-year (AED 10,000 per month per unfilled role; AED 6,000 minimum wage for Emiratis), verified via MOHRE and WPS integration. Establishments with 20 to 49 employees in selected economic activities may also be required to employ UAE nationals under different rules. Firms outside the targeted categories, and free zones, are treated separately by their authority.
Currency & cadence
AED, monthly, through a WPS agent bank or exchange house. Payroll records, contracts and payment evidence help substantiate employment expenditure; corporate-tax deductibility remains subject to the general expense rules and applicable limitations.
Primary sources are the official portals listed above. Important exceptions: figures vary by entity, free zone, sector and employee nationality, and some rules have transitional arrangements, so confirm the position for your specific case. See our methodology for how we prioritise sources, and please report a change if a rule has moved.
Frequently asked questions
How much does it cost to set up a company in Dubai in 2026?
A single-founder free-zone setup with one visa runs roughly AED 22,000 to 32,000 in year one, renewing at AED 18,000 to 24,000. A Dubai mainland LLC is higher, about AED 50,000 to 70,000 in year one, mostly because of the mandatory Ejari office lease.
Free zone or mainland, which should I choose?
Choose mainland if you sell directly to UAE customers, run retail or hospitality, or want government contracts. Choose a free zone if you sell internationally or to other free-zone firms and want 0% corporate tax on qualifying income. Many founders start in a free zone and convert to mainland as they grow.
Do I have to pay corporate tax in the UAE?
Yes. 9% corporate tax applies on taxable profit above AED 375,000. A qualifying free-zone company can still get 0% on qualifying income under the QFZP regime if it meets the conditions. Payroll records, contracts and payment evidence help substantiate employment costs; deductibility remains subject to the general Corporate Tax expense rules and applicable limitations.
Do I need to register for VAT?
VAT registration is mandatory once taxable supplies pass AED 375,000 a year, and voluntary from AED 187,500. VAT is separate from corporate tax and from payroll.
Can a foreigner own 100% of a UAE company?
Yes. Since 2021 most mainland activities allow 100% foreign ownership with no Emirati partner. A small list of strategic activities still requires local participation, so check the activity before you commit.
How do I hire my first employee in the UAE?
Register your establishment with MOHRE (establishment card + employer ID), open a corporate account with a WPS agent bank, issue a compliant contract, then process the work permit, Emirates ID, medical and health insurance. Most employees of MOHRE-regulated private-sector establishments must then be paid through WPS, subject to applicable exemptions and authority-specific rules.
What is WPS and do I have to use it?
The Wage Protection System routes salaries through MOHRE-approved banks so payments are tracked. It is mandatory. Since Ministerial Resolution 340 of 2026, late transfers are recorded from the due date and escalate to work-permit suspension.
What does an employee really cost beyond salary?
Budget roughly AED 8,000 to 12,000 per employee in year one on top of salary for the medical test, Emirates ID, permit fees and health insurance, plus gratuity accrual (about 8.3% of basic) building in the background.
Does my start-up have to hire Emiratis?
It depends on size and sector. Establishments with 50+ employees face percentage-based Emiratisation quotas, with monthly fines per unfilled role. Some establishments with 20 to 49 employees in selected economic activities must also hire UAE nationals under different rules. Firms outside the targeted categories, and free-zone entities, are treated separately by their authority. Payroll data is checked via MOHRE and WPS integration.
How much gratuity will I owe staff when they leave?
For most private-sector staff: 21 days of basic pay per year for the first five years, 30 days per year after, capped at two years of wage, payable within 14 days of leaving. Use the End-of-Service calculator to model it.
Last reviewed: 19 July 2026. General information, not legal or tax advice. Rates and rules change frequently and depend on entity, free zone, sector and nationality; confirm against the official sources above before you file or pay. Use the
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