Business Setup in the UAE in 2025: Policy Changes and Startup Costs Explained

Over the past five years, the United Arab Emirates (UAE) has implemented significant reforms to enhance its business environment, aiming to attract foreign investment and diversify its economy. Notably, the introduction of a 9% corporate tax in 2023 marked a shift in the UAE’s fiscal policy, aligning it more closely with global standards. Additionally, the UAE has focused on reducing bureaucratic hurdles, streamlining business registration processes for business setup in UAE, and offering various incentives to foster a more conducive environment for startups and established enterprises alike.
Recent Policy Changes and Their Impact on Foreign Investors
In recent years, the UAE has introduced several policies to facilitate business formation and enhance investor confidence. Key changes include the introduction of long-term residency visas for investors and skilled professionals, the reduction of the cost of setting up a business in Dubai, especially in certain free zones, and the elimination of the requirement for a local sponsor in many industries. These reforms have significantly benefited foreign investors by providing them with more control over their businesses and creating opportunities to operate in mainland Dubai and other emirates. Moreover, the shift toward economic liberalization has allowed businesses from diverse industries to flourish, making the UAE a top destination for startups and SMEs.
Policy Changes for Business Setup in the UAE in 2025
As of 2025, several new policy changes are set to impact the business setup process in the UAE:
Introduction of a 15% Minimum Tax Rate
Starting in January 2025, the UAE will implement a 15% domestic minimum top-up tax (DMTT) targeting large multinational companies with global revenues exceeding €750 million. This aligns the UAE with the global minimum tax framework under the OECD’s Two-Pillar Solution, ensuring that multinational enterprises contribute their fair share to the countries where they operate.
Enhanced Emiratisation Requirements
To further integrate UAE nationals into the private sector, companies with 20 to 49 employees will be required to employ at least two Emirati citizens starting January 2025. This extension of the Emiratisation drive aims to balance the workforce composition and provide more opportunities for local talent.
Lower Licensing Fees in Abu Dhabi Global Market (ADGM)
In a bid to attract more businesses, particularly financial institutions and startups, ADGM will introduce reduced licensing fees in 2025. This initiative is designed to make ADGM a more attractive destination for innovation and global investment.
Mandatory Female Representation on Company Boards
Private joint-stock companies in the UAE must appoint at least one woman to their boards of directors from January 2025. “This regulatory requirement is part of the UAE’s effort to promote gender diversity and align with global best practices in corporate governance.” If you’re currently looking for business partners in Dubai, it’s crucial to consider this factor early on.
Introduction of Dynamic Parking and Toll Fees in Dubai
Dubai will implement variable parking and Salik toll fees in 2025 to manage traffic congestion and optimize road usage. “Parking rates will increase during peak hours, with premium spaces costing AED 6/hour, while Salik tolls will follow a similar dynamic pricing model, with AED 6 charged during peak times” and AED 4 during off-peak hours. If you’re renting serviced offices in JLT, consider accessibility and transportation options for your staff.
Increased Sewerage Fees in Dubai
Dubai Municipality will phase in increased sewerage fees starting at 1.5 fils per gallon in 2025. “The revenue generated will support infrastructure development and sustainability initiatives across the emirate.”
Navigating the Changes with Austria Business Center
Establishing a business in the UAE amidst evolving policies can be complex. Austria Business Center specializes in providing comprehensive business solutions, including company formation, licensing, and office space services. Their expertise ensures that clients can navigate regulatory changes efficiently, allowing entrepreneurs to focus on their core business activities. With modern facilities and professional support, Austria Business Center simplifies the setup process, making it more convenient for businesses to establish a presence in the UAE.