Civil Company in United Arab Emirates
Civil Company · Formation from $5,500
Last verified: June 13, 2026
Corporate Tax
9.0%
State Tax
0.0%
Formation Cost
$5,500
Annual Fee
$3,500
Comparison Scores
Privacy, remote setup, banking, and tax efficiency
Calculate full formation cost
Break down one-time filing fees and recurring costs for any supported entity type.
Who Should Choose This?
Profiles that typically benefit from this entity
- Qualified professionals (doctors, engineers, lawyers, accountants) wanting to practice in the UAE mainland.
- Consulting firms needing direct access to local UAE clients and government contracts.
- Entrepreneurs who want 100% ownership but need a mainland presence rather than a free zone.
- Service-based businesses that do not require commercial trading licenses.
Who Should Avoid This?
Scenarios where another structure may be better
- Businesses involved in importing, exporting, or trading physical goods.
- Founders seeking limited liability protection for their personal assets.
- Entrepreneurs looking for the cheapest possible setup, as free zones might be cheaper due to no LSA or physical office requirements.
Advantages
- +100% foreign ownership is permitted for professional services in the UAE mainland.
- +Direct access to the local UAE market without needing a local sponsor to hold 51% of shares.
- +Ability to open corporate bank accounts with UAE banks more easily than offshore entities.
- +No minimum share capital requirement for formation.
- +Can apply for multiple residence visas depending on the size of the leased office space.
- +Eligible for the UAE's Small Business Relief (0% corporate tax on revenue up to AED 3 million until the end of 2026).
Disadvantages
- -Unlimited personal liability for the partners regarding the company's debts and obligations.
- -Requires the appointment of a Local Service Agent (LSA) who must be a UAE national, incurring an annual fee.
- -Mandatory physical office space requirement (Ejari) to obtain and renew the trade license.
- -Restricted to professional and consultancy activities; cannot engage in commercial trading or manufacturing.
- -Liquidation process can be complex and requires settling all liabilities and cancelling visas.
Formation Steps
Determine the specific professional business activity and reserve a unique trade name with the Department of Economic Development (DED).
Obtain Initial Approval from the DED to confirm the business activity is permitted.
Draft and notarize the Civil Company Partnership Agreement (Memorandum of Association).
Appoint a Local Service Agent (LSA) and sign a notarized LSA agreement.
Lease a physical office space in the UAE mainland and register the tenancy contract (Ejari).
Submit all documents, including passport copies and the Ejari, to the DED for final approval.
Pay the required DED license fees and receive the Professional Trade License.
Register with the Ministry of Human Resources and Emiratisation (MOHRE) and Immigration for visa processing.
Open a corporate bank account in the UAE.
Cost Breakdown
Detailed breakdown of formation and ongoing costs
| Item | Type | Amount |
|---|---|---|
| DED Trade Name & Initial Approval | One-time | $300 |
| DED Professional License Fee | Annual | $1,500 |
| Local Service Agent (LSA) Fee | Annual | $1,500 |
| MOA & LSA Agreement Notarization | One-time | $500 |
| Establishment Card & Immigration Registration | Annual | $500 |
| Corporate Services / PRO Fee | One-time | $1,200 |
| First year total | $5,500 | |
| Annual ongoing | $3,500 | |
Real-World Examples
Typical use cases for this entity type
- A group of foreign architects setting up an engineering consultancy in Dubai to bid on local mainland projects.
- Two expatriate doctors opening a specialized medical clinic in Abu Dhabi, retaining 100% ownership while paying an LSA.
- A boutique legal advisory firm established by foreign lawyers to serve corporate clients directly in the UAE mainland.
Common Mistakes
Pitfalls to avoid during setup and operations
- Assuming a Civil Company provides limited liability protection like an LLC.
- Choosing a Civil Company for commercial trading activities, which will be rejected by the DED.
- Failing to clearly define the LSA's fixed fee in the notarized agreement, leading to future disputes.
- Underestimating the cost of mandatory physical office space (Ejari) in Dubai or other emirates.
- Neglecting to formally liquidate the company when leaving the UAE, leaving partners personally liable for accumulating fines.
Other entity types
Other formation options in United Arab Emirates
Free Zone Company (FZCO)
- Tax
- 9.0%
- Formation
- $3,500
Free Zone Establishment (FZE)
- Tax
- 9.0%
- Formation
- $3,500
Mainland LLC
- Tax
- 9.0%
- Formation
- $4,100
Offshore Company (IBC)
- Tax
- 9.0%
- Formation
- $2,000
Foreign Branch
- Tax
- 9.0%
- Formation
- $6,800
Representative Office
- Tax
- 9.0%
- Formation
- $4,080
Sole Establishment
- Tax
- 9.0%
- Formation
- $3,500
Compare with Other Countries
| Country / Type | Tax | Formation | Annual |
|---|---|---|---|
| 🇦🇪 Civil Company(Civil Company) | 9.0% | $5,500 | $3,500 |
FAQ
What is a UAE Civil Company?
A Civil Company is a professional partnership allowing 100% foreign ownership for qualified professionals like doctors, lawyers, and consultants in the UAE mainland.
Do I need a local sponsor for a Civil Company?
No, you do not need a 51% local shareholder, but you must appoint a Local Service Agent (LSA) who has no ownership stake.
What is the role of a Local Service Agent (LSA)?
The LSA acts as a liaison with government departments for license renewals and visa processing, and is paid via a fixed annual fee.
Are partners personally liable in a Civil Company?
Yes, unlike an LLC, partners in a Civil Company have unlimited personal liability for the business's debts.
Can a Civil Company engage in trading goods?
No, it is strictly for professional, service-oriented, and consultancy activities.
Is a physical office required?
Yes, a physical office space and a registered Ejari tenancy contract are mandatory to obtain the license.
What is the corporate tax rate for a Civil Company?
The corporate tax rate is 9% on taxable income exceeding AED 375,000, though Small Business Relief may apply for revenues under AED 3 million until the end of 2026.
Can a Civil Company hire employees?
Yes, it can hire employees and sponsor their UAE residence visas, subject to office space quotas.
Detailed Tax Rates
Corporate Income Tax
| From | To | Rate |
|---|---|---|
| $0 | $375,000 | 0.0% |
| $375,000 | No limit | 9.0% |
The UAE corporate tax rate is 9% on taxable income exceeding AED 375,000. Civil companies (professional companies) are subject to this tax unless they qualify for Small Business Relief, which is available for businesses with revenue up to AED 3 million until the end of 2026.
Personal Income Tax (Top rate: 0.0%)
| From | To | Rate |
|---|---|---|
| $0 | No limit | 0.0% |
The UAE does not levy personal income tax on salaries, wages, or investment income. However, individuals conducting business activities with an annual turnover exceeding AED 1 million are subject to the 9% corporate tax.
Capital Gains Tax
0.0%
There is no separate capital gains tax for individuals. For businesses, capital gains are generally treated as ordinary income and taxed at the 9% corporate rate unless a qualifying participation exemption applies.
VAT / GST
5.0%
Registration Threshold: AED375,000
Non-resident providers of digital services must register for VAT if they make taxable supplies in the UAE, with no minimum registration threshold applying to non-residents.
Withholding Tax
The UAE currently applies a 0% withholding tax rate on all cross-border payments (dividends, royalties, interest, and technical fees) under the Corporate Tax Law.
Payroll & Social Security
There are no social security contributions for expatriate employees, who instead receive a statutory End-of-Service Gratuity. For UAE nationals joining after October 2023, employers contribute 15% and employees 11% to the GPSSA pension fund.
Other Taxes
Municipal Rental Tax
Most emirates levy a municipal tax on rented properties. In Dubai, it is 5% of the annual rent for residential properties and 10% for commercial properties.
Property Transfer Tax
A transfer fee is applied to the sale of real estate. In Dubai, the rate is 4% of the property value, typically split equally between the buyer and the seller.
Banking & Payments
Wio Bank
Remote-friendlyA leading digital banking platform in the UAE offering fast, app-based onboarding for SMEs, though an Emirates ID is required.
Mashreq NeoBiz
Remote-friendlyA dedicated digital business bank by Mashreq, providing multi-currency accounts and streamlined digital applications.
Emirates NBD
One of the largest traditional banks in the UAE, offering comprehensive corporate banking services and extensive branch networks.
Abu Dhabi Commercial Bank (ADCB)
A major traditional bank providing robust trade finance and corporate banking solutions for mainland companies.
Payment Gateways
Stripe, PayTabs, Telr, Checkout.com, Network International, PayPal
Currency
AED
Multi-Currency: Supported
Account Opening
Opening a corporate bank account for a mainland Civil Company requires the signatory to have a UAE residence visa and Emirates ID. While traditional banks typically require an in-person branch visit, digital platforms like Wio Bank and Mashreq NeoBiz offer streamlined, app-based onboarding once residency is established. Compliance checks and KYC procedures can take anywhere from 1 to 4 weeks depending on the business activity and partner nationalities.
Practical Information
Timezone
UTC+4
Business Language
Arabic (Official) and English (Business)
Legal System
Civil law system with Islamic (Sharia) law principles
Ease of Doing Business
#16
IP Protection
Robust IP framework governed by the Ministry of Economy. The UAE is a member of WIPO, the Paris Convention, and the Madrid Protocol, offering strong protection for trademarks, patents, and copyrights.
Double Tax Treaties
143 countries
Notable treaties: United Kingdom, India, China, Germany, Singapore, France, Japan
Visa & Residency Options
UAE Golden Visa
A 10-year long-term residence visa available to investors, entrepreneurs, and highly skilled professionals without the need for a national sponsor.
Standard Investor/Partner Visa
A 2-year renewable residence visa granted to partners in a mainland Civil Company, allowing them to reside in the UAE and sponsor family members.
UAE Green Visa
A 5-year residence visa for freelancers, self-employed individuals, and skilled employees, offering longer grace periods upon expiration.
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Changelog
Data updates and changes on this page
Verified 2026 DED mainland fees, LSA requirements, and corporate tax implications for Civil Companies.
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