UAE business setup glossary

A plain-English reference for the acronyms and terms that show up when you start comparing UAE freezones. 36 entries.

A

AED: United Arab Emirates dirham. The national currency, pegged to the US dollar at roughly 3.6725 AED per 1 USD.
AML: Anti-Money Laundering. Compliance framework UAE freezones enforce on licensed companies, including beneficial-ownership filings and transaction monitoring for designated sectors.
Activity: The specific business activity a freezone licence authorises. Each freezone publishes a list of permitted activities (often 1,000+); your licence must explicitly include yours.

Banking ease rating: A 1–5 score on FreezoneMatch reflecting how readily the freezone's typical licensees secure a UAE business bank account. Driven by zone reputation, banking partnerships, and KYC friction.
Bookkeeping: Mandatory record-keeping for UAE freezone companies under the federal Corporate Tax law. Records must be retained for at least 7 years.

Corporate Tax (CT): UAE federal tax of 9% on business profits above AED 375,000, in force from June 2023. Freezones can qualify for 0% CT under the QFZP regime if they meet substance and qualifying-income tests.
Customs Duty: A 5% import duty on goods entering the UAE mainland from a freezone. Goods staying inside the freezone or re-exported are generally duty-free.

DFSA: Dubai Financial Services Authority. Independent regulator for financial-services firms inside DIFC. Required licence for banking, asset management, advisory, and insurance activities in the zone.
DED: Department of Economic Development. The emirate-level mainland licensing body (DED Dubai, DED Abu Dhabi, etc.). Issues mainland licences, not freezone licences.

EID: Emirates ID. The national identity card every UAE resident must hold. Required to open bank accounts, sign tenancy contracts, and access most government services.
Establishment Card: A company-level identity card issued by the freezone authority that lets a licensed company sponsor employee and dependent visas.
ESR: Economic Substance Regulations. UAE rule requiring companies in nine "relevant activities" (banking, insurance, fund management, lease-finance, headquarters, shipping, holding, IP, distribution) to demonstrate real economic substance in the UAE.

Flexi-desk: A shared-desk office package — typically a hot-desk plus mailing address — that satisfies a freezone's physical-presence requirement at the lowest cost tier. Sometimes called "smart desk" or "co-working licence".
Free zone (freezone): A designated economic area in the UAE with its own licensing authority, customs regime, and (historically) 100% foreign ownership. There are 52 across the seven emirates.
FSRA: Financial Services Regulatory Authority. Independent regulator for financial-services firms inside ADGM (Abu Dhabi Global Market). Common-law jurisdiction.
FZCO: Free Zone Company. A multi-shareholder freezone entity (2+ shareholders, individuals or corporates). The most common freezone structure for SMEs.
FZE: Free Zone Establishment. A single-shareholder freezone entity. Functionally similar to an FZCO but limited to one owner.

GDRFA: General Directorate of Residency and Foreigners Affairs. UAE federal body that issues residence visas, including investor and employment visas for freezone companies.
Golden Visa: A 10-year UAE residence visa for qualifying investors, entrepreneurs, specialists, and high-skilled professionals. Some freezone investor visas can be converted to Golden Visa status.

IBAN: International Bank Account Number. UAE IBANs are 23 characters long. Required to receive payments and a key signal of a fully-functional UAE business bank account.
Immigration Card: Also called Establishment Card. Required to sponsor visas through your freezone company.

KYC: Know Your Customer. The identity and source-of-funds verification UAE banks perform before opening a business account. Friction varies sharply by freezone and shareholder nationality.

LLC: Limited Liability Company. The standard mainland (non-freezone) corporate form, licensed by the emirate's DED. Historically required Emirati ownership, since 2021 most activities allow 100% foreign ownership.
Licence: The freezone-issued document authorising a company to operate specific activities. Renewable annually (or up to 6 years pre-paid at most zones).

Mainland: UAE territory outside any freezone. Mainland companies can trade directly with the local UAE market without a distributor; freezone companies typically cannot (with dual-licence exceptions).
MOA: Memorandum of Association. The founding document of a UAE company setting out shareholders, share capital, activities, and management. Required at incorporation; amendments require freezone approval.

QFZP: Qualifying Free Zone Person. The Corporate Tax classification that lets a freezone company keep the 0% rate on qualifying income. Requires adequate substance, audited financials, and qualifying-income tests under FTA Decision 100.

Regulated activity: A business activity requiring approval from a sector regulator (DFSA, FSRA, VARA, SCA, MoH, KHDA, etc.) in addition to the freezone licence itself. Examples: banking, insurance, crypto custody, healthcare, education.

Share capital: The nominal capital declared in your MOA. Most freezones require AED 50,000–300,000 declared (not paid-up); DIFC and ADGM have activity-specific minimums.
Substance test: Under ESR and QFZP, the requirement to conduct "core income-generating activities" (CIGAs) inside the UAE with adequate staff, premises, and operating expenditure.

TRN: Tax Registration Number. The 15-digit identifier the FTA issues to a UAE company for VAT and Corporate Tax filings. Required before issuing VAT invoices.
Trade name: The legal name of your UAE company. Must follow freezone naming rules: no offensive terms, no religious figures, no acronyms shorter than 3 letters in most zones.

UBO: Ultimate Beneficial Owner. The natural person(s) who ultimately own or control 25%+ of a UAE company. Disclosure is mandatory under UAE federal AML regulations.

VARA: Virtual Assets Regulatory Authority. Dubai's dedicated regulator for crypto and virtual-asset service providers. VARA licensure is required for any commercial virtual-asset activity in Dubai outside DIFC.
VAT: Value Added Tax. UAE federal VAT at 5%, in force since 2018. Companies above the AED 375,000 turnover threshold must register with the FTA and file quarterly.
Visa quota: The maximum number of employee + dependent residence visas a freezone licence permits. Tied to office package (a flexi-desk typically supports 1–3 visas; a private office supports 6+).