Setting up a consultancy or agency in the UAE: licence, visas, VAT and getting paid

Every year, hundreds of professional services firms relocate to or expand into the UAE, drawn by proximity to Gulf and African markets, a growing talent pool and a business-friendly regulatory framework. But the process of obtaining a consultancy licence and setting up in the UAE is more nuanced than most founders expect, particularly around tax. The assumption that a UAE services business pays zero corporate tax is the single most expensive misunderstanding we see, and we will address it head-on below. Whether you run a management consultancy, a marketing agency or a specialist advisory practice, the decisions you make at incorporation stage will shape who you can invoice, how many visas you hold, and what you owe the Federal Tax Authority (FTA). This guide reflects the rules as they stand in 2026; licensing and tax legislation changes regularly, so confirm specifics with a qualified UAE adviser before committing.

Who this is for

This article is written for established consultancies, agencies and professional services firms that are either relocating operations to the UAE or opening a regional office. If you already bill six or seven figures and employ a team, the structuring choices here matter far more to you than they do to a solo freelancer buying the cheapest permit available. Founders, COOs and their legal or tax advisers will find the most value here. We assume you already understand basic corporate structures and want the UAE-specific detail that affects your P&L and compliance obligations.

Choosing the licence for a services business

A UAE consultancy licence is classified as a professional licence (sometimes called a service licence, depending on the authority). This is distinct from a commercial or industrial licence and is the correct category for firms whose revenue comes from intellectual work: strategy, marketing, technology consulting, design, legal advisory and similar activities. The licence type follows your stated business activities, and you will list those activities during the application. Getting the activity list right matters because it determines what you can legally invoice for.

Expect licence costs to range from AED 10,000 to AED 50,000 annually, depending on the authority, the number of activities and whether you are in a free zone or on the mainland. Some free zones bundle office space, visa allocations and the licence into a single package, which can push the total to AED 25,000-75,000 in year one. Cosmos coordinates this process through licensed partners, matching your activity scope and commercial plans to the right authority so you avoid paying for a structure that does not fit your business.

Mainland or free zone: who you can invoice

This is the fork in the road. A mainland professional licence, issued by the Department of Economy and Tourism (DET) in Dubai or equivalent bodies in other emirates, allows you to invoice any client anywhere: local UAE businesses, government entities and overseas clients. A free zone licence restricts direct trade with mainland UAE clients unless you work through a mainland-registered intermediary or your free zone has a specific dual-licence arrangement.

For a marketing agency whose clients are primarily overseas, a free zone setup may be perfectly adequate and administratively simpler. For a consultancy that expects a mix of local and international engagements, mainland registration is usually the better choice. Your visa quota also differs: mainland companies can sponsor visas proportional to office space, while free zone packages typically bundle a fixed number of visas (often two to six in a starter package). The right answer depends entirely on your client base and headcount plans.

Visas for you and your team

Your licence is the gateway to an establishment card, which in turn lets you sponsor employee visas. Free zone packages include a set visa allocation; mainland companies apply for visas linked to their office lease and headcount. Each sponsored employee receives a residence visa, an Emirates ID and, where applicable, a labour card.

Partners and senior staff earning above a certain threshold or holding specialist qualifications should consider the Golden Visa route, which grants five- or ten-year residency independent of employer sponsorship. This is particularly relevant for agency founders who want personal residency stability that is not tied to the company's licence renewal cycle. Processing times vary, but a standard employment visa typically takes two to four weeks from submission.

Corporate tax: the 9 per cent question for service income

Here is where most services firms get tripped up. UAE corporate tax applies at 9 per cent on taxable income above AED 375,000. Income below that threshold is taxed at 0 per cent, which provides a small buffer but is irrelevant for any established consultancy.

The critical point for free zone businesses: do not assume you qualify for the 0 per cent free zone corporate tax rate. Consultancy and agency income earned from third-party clients is generally not a listed Qualifying Activity under the free zone tax regime. The qualifying activities are narrowly defined and typically cover activities like holding company functions, fund management or specific logistics and manufacturing operations. A management consultancy billing a client in London for strategy work does not meet that definition. Your UAE service company's corporate tax obligation is therefore almost certainly 9 per cent on taxable income above AED 375,000, regardless of whether you sit in a free zone or on the mainland.

Get proper tax structuring advice before incorporation, not after your first FTA filing. Cosmos works with licensed tax advisers who specialise in service-sector corporate tax positions and can model your expected liability accurately.

VAT on services, including exports of services

The UAE charges VAT at 5 per cent on most supplies. Registration is mandatory once your taxable turnover exceeds AED 375,000 in a twelve-month period, and voluntary registration is available above AED 187,500. For any established agency or consultancy, mandatory registration is a near-certainty from day one.

The provision that matters most to firms with overseas clients: exported services may qualify as zero-rated, meaning you charge 0 per cent VAT rather than 5 per cent. This is a significant cash-flow advantage. However, zero-rated export of services in the UAE requires meeting specific conditions: the client must be outside the UAE, the services must not relate to goods or real estate in the UAE, and the place of supply must be outside the state. Each condition needs careful analysis against your actual engagements. Do not assume zero-rating applies across your entire book of business without professional review; the FTA audits this area closely and penalties for incorrect zero-rating are substantial.

Getting paid: banking, invoicing and overseas clients

Opening a UAE corporate bank account remains one of the most time-consuming steps. Banks conduct thorough due diligence on service businesses, and you should expect the process to take four to eight weeks. Prepare a clear business plan, audited financials from your home jurisdiction, client contracts and proof of substance (office lease, employee visas).

For agencies billing overseas clients, multi-currency accounts are available at most major UAE banks, and fintech solutions have improved significantly for receiving payments in USD, GBP and EUR. Your invoices should reference your Tax Registration Number (TRN), apply the correct VAT treatment per engagement, and clearly state payment terms. Cosmos helps clients prepare banking applications and connects them with relationship managers at banks experienced with professional services firms, which materially reduces rejection rates and delays.

Substance and permanent establishment when clients are abroad

This is the cross-border issue agencies most often miss. If your team members deliver work while physically present in another country, that country may assert that your UAE company has a permanent establishment (PE) there. A PE finding means the other jurisdiction can tax the profits attributable to that presence. The risk is highest when employees or contractors spend extended periods in a client's country, attend client sites regularly, or have authority to conclude contracts on behalf of the UAE entity.

Separately, your clients' jurisdictions may apply withholding tax to service fees paid to a UAE company. The UAE's growing network of double taxation agreements can reduce or eliminate withholding in many cases, but you need to check treaty coverage country by country. Document where your people work, how decisions are made, and where contracts are signed. A well-planned structure with genuine commercial substance in the UAE: a real office, local staff, board meetings held in the country, and documented decision-making processes: is your best defence against PE challenges from foreign tax authorities.

How Cosmos helps

Setting up a consultancy in the UAE involves coordinating across licensing authorities, immigration, banking, tax registration and ongoing compliance. Cosmos acts as the single point of coordination, working through licensed partners to handle each stage. Rather than managing five separate relationships with a PRO, a bank introducer, a tax adviser, an immigration consultant and a licence agent, you deal with one team that understands how these pieces connect.

Specifically, Cosmos helps with matching your business activities to the right licence and jurisdiction, managing the visa and establishment card process for your team, preparing corporate tax and VAT registrations with accurate activity classifications, and connecting you with banking partners suited to professional services firms. The goal is a structure that is compliant from day one, not one that needs expensive restructuring after your first audit.

Frequently asked questions

• Can I set up a consultancy in the UAE with 100 per cent foreign ownership? Yes. Since the 2020 amendments to the Commercial Companies Law, 100 per cent foreign ownership is permitted for most professional and service activities on both the mainland and in free zones.

• How long does the full setup process take? From initial application to receiving your licence, visa and bank account, expect eight to twelve weeks. The licence itself can be issued in one to two weeks; banking is the bottleneck.

• Is a physical office required? Mainland licences require a tenancy contract. Many free zones offer flexi-desk or virtual office options that satisfy the licence requirement, though substance considerations for corporate tax may demand a more permanent arrangement.

• Do I need a local partner or service agent? For professional licences on the mainland, a local service agent (not a shareholder) was historically required but is no longer mandatory for most activities. Free zone companies do not need a local partner.

• Will my free zone consultancy pay 0 per cent corporate tax? Almost certainly not. Consultancy and agency services to third-party clients are generally non-qualifying activities under the free zone tax regime. Budget for 9 per cent on taxable income above AED 375,000.

The UAE remains one of the most attractive jurisdictions for professional services firms looking to serve clients across the Gulf, Africa and Asia. But the days of treating it as a no-tax jurisdiction for service businesses are over. A well-structured consultancy setup in the UAE, with the right licence type, proper VAT treatment, honest corporate tax planning and genuine substance, gives you a compliant base that withstands scrutiny from both the FTA and your clients' home-country tax authorities. Get the foundation right and the commercial advantages are real. Get it wrong and you are looking at back taxes, penalties and a costly restructure. If you are planning a move, talk to Cosmos early: the structuring decisions made before incorporation are the ones that matter most.

This is general information, not tax, legal or compliance advice. Rules differ by jurisdiction, change frequently and depend on your circumstances; confirm your position with a qualified adviser in the relevant jurisdiction before acting.