In short
- Cyprus: 15% on profit from 1 January 2026. UAE: 0% on the first AED 375,000 of taxable income, 9% above.
- The free-zone 0% covers listed activities and sales to other free-zone companies, with other revenue allowed up to 5% of the total.
- Formation with us: Cyprus from €1,699 in 8 to 12 working days, a UAE free zone from $7,000 in 1 to 5.
- A company bank account takes 4 to 12 weeks in Cyprus and 2 to 4 weeks in the UAE.
In this guide
Cyprus vs UAE at a glance: tax, cost, bank, residence
A Cyprus company is an EU company with an EU VAT number and one flat rate on profit. A UAE company sits outside the EU, pays 0% or 9% and brings its owner a residence visa. We set up both: company formation in Cyprus is expected in 8 to 12 working days, a UAE free-zone licence in 1 to 5.
| Point | Cyprus | UAE |
|---|---|---|
| Corporate tax | 15% of net profit | 0% up to AED 375,000 of taxable income, 9% above; 0% on qualifying free-zone income |
| Tax on dividends | None withheld on dividends paid abroad. An owner living in Cyprus with non-dom status pays 2.65% health contribution | None: no withholding tax, no income tax on individuals |
| VAT | 19%, registration above €15,600 of turnover in 12 months | 5%, registration above AED 375,000 a year |
| Registration with us | €1,699 to €4,999 before VAT, 8 to 12 working days | Free zone from $7,000, 1 to 5 working days; mainland from $8,000, 1 to 2 weeks |
| Accounting with us | from €290 a month | from $350 a month |
| Bank account | 4 to 12 weeks; a payment account in 1 to 5 working days | 2 to 4 weeks |
| Residence for the founder | Registration for EU citizens; for others a company of foreign interests with €200,000 invested | Two-year residence visa through the company, from AED 3,000 a visa |
| Audit | Every company, every year; a review for a small one | Mainland companies; in a free zone for the 0% rate, for revenue above AED 50 million or where the zone asks |
| Who it suits | Holding companies, EU trade, software and patents | Trade and services outside the EU, founders who move to the Gulf |
Cyprus or the UAE (Dubai) for business: four cases in numbers
What the business sells and where its owner lives decide the country:
- A consultancy with clients outside the EU, a profit of AED 600,000 and an owner who moves to Dubai: the UAE. With revenue under AED 3 million it elects Small Business Relief and pays no corporate tax through 2029. Without the relief the tax is AED 20,250, or 3.4%.
- A software company that licenses its own product to EU customers and earns €300,000 of qualifying profit: Cyprus. The IP Box deducts 80% of that profit, so the tax is 15% of €60,000, which is €9,000, or 3%.
- A holding company for subsidiaries in the EU: Cyprus. Dividends it receives are exempt in most cases, gains on the sale of shares are exempt, and dividends it pays abroad carry no withholding tax.
- A trader that buys in Asia and re-exports to Africa and the Gulf: a UAE free zone with a warehouse. Distribution from a designated zone is a listed activity, so the profit can be taxed at 0%. The same trader selling to EU retailers needs an EU company and VAT number.
What a Cyprus and a UAE company cost in the first year
| Cost | Cyprus | UAE free zone |
|---|---|---|
| Formation with us, before VAT | €1,699 with state fees, registered office and secretary for a year | from $7,000 for the company and its licence |
| Accounting with us, 12 months | €3,480 at €290 a month | $4,200 at $350 a month |
| Residence visa | None comes with the company | from AED 3,000 each |
| First year, the lines above | €5,179 | $11,200 and the visas |
| Audit of the year's accounts | €700 to €1,500 with the auditors we work with | Where the zone or the 0% rate asks for it |
| From the second year | Accounting, audit, renewal of office and secretary | Accounting, licence renewal from AED 4,888 a year |
The Cyprus figure is the Starter package. Standard at €2,749 adds the articles in English and apostilled certificates, and Premium at €4,999 adds expedited filing. A VAT number costs €350 and the VIES registration €149. In the UAE a mainland company starts at $8,000 and needs a leased office, and its licence costs AED 12,000–15,000 a year.
Corporate tax: 15% in Cyprus, 0% and 9% in the UAE
Cyprus taxes the net profit of a company at 15% from 1 January 2026. Profits up to 31 December 2025 were taxed at 12.5%.
The UAE charges 0% on the first AED 375,000 of taxable income in a tax year and 9% on the rest. The dirham is pegged to the dollar at 3.6725, so the 0% band is about $102,000. The effective rate climbs with profit and stays under 9%.
| Taxable profit | UAE tax | UAE effective rate | The same profit at 15% |
|---|---|---|---|
| AED 375,000 | AED 0 | 0% | AED 56,250 |
| AED 750,000 | AED 33,750 | 4.5% | AED 112,500 |
| AED 1,500,000 | AED 101,250 | 6.75% | AED 225,000 |
| AED 3,000,000 | AED 236,250 | 7.9% | AED 450,000 |
A UAE company with revenue of AED 3 million or less can elect Small Business Relief and pay no corporate tax, for tax periods that end by 31 December 2029. The election is made in the yearly return and looks at revenue, so a business with a high margin gains most.
Both countries add a 15% minimum tax for groups with revenue of €750 million or more. A loss is carried forward for seven years in Cyprus, and without a time limit in the UAE, against up to 75% of a later year's taxable income.
What the UAE free-zone 0% covers
A free-zone company pays 0% on qualifying income when it is a Qualifying Free Zone Person (QFZP). Such a company keeps staff and assets in the zone, has its accounts audited and prices dealings with related companies at market value. Three kinds of income qualify:
- income from other free-zone companies that use the goods or services themselves
- income from any customer for a listed activity, among them manufacturing, trading of qualifying commodities, logistics, distribution from a designated zone and holding shares
- income from the company's own patents and copyrighted software, in proportion to the research it paid for itself
Other income may reach 5% of revenue or AED 5 million, whichever is lower. Past that limit the company is taxed at the standard rates for that tax year and the four after it. Sales to private individuals are excluded for almost every activity. A consultancy, an agency or an online shop with customers outside the zones pays the standard 0% and 9%. The full rules are in the guide to corporate tax in the UAE.
We do this for you Company formation in Cyprus from €1,699
Tax on dividends and on the founder's own income
Cyprus withholds nothing on dividends paid to shareholders who live abroad. Two exceptions apply to related companies: 5% when they sit in a low-tax jurisdiction and 17% when the jurisdiction is on the EU blacklist. A shareholder who is tax resident and domiciled in Cyprus pays 5% Special Defence Contribution on dividends from profits of 2026 onwards. That shareholder also pays a 2.65% health contribution (GeSY) on up to €180,000 of income a year.
A founder who moves to Cyprus from abroad stays non-domiciled until 17 of the last 20 years were spent as a Cyprus tax resident, and pays no defence contribution in that time. Of every €100 of profit such an owner keeps €82.75: €15 goes in corporate tax and €2.25 in health contribution on the €85 dividend. The conditions are in the guide to Cyprus non-dom tax rules.
The UAE levies no income tax on individuals and no withholding tax on dividends. A person is tax resident there after 183 days in 12 consecutive months. For the holder of a residence visa with a permanent home, a job or a business in the country, 90 days are enough. An owner who lives in the UAE keeps all of a profit of AED 375,000, and AED 943,750 of a profit of AED 1,000,000.
A founder who stays in a third country is taxed there on dividends from either company. Cyprus and the UAE each treat a foreign company as their own taxpayer when it is managed and controlled on their territory, and the founder's home country may apply the same test.
EU market or Gulf base: customers, VAT and treaties
Cyprus has been in the EU since 2004. A Cyprus company is listed in VIES, the EU register of VAT numbers, and invoices business customers in the other 26 member states under the reverse charge. From 2026 a company incorporated in Cyprus is tax resident there by default, unless a tax treaty says otherwise. Cyprus has double tax treaties with more than 65 countries.
The UAE is outside the EU, so goods it ships to EU buyers arrive as imports. A UAE company may register for VAT from AED 187,500 of turnover, before the compulsory threshold. The Ministry of Finance counts 137 double taxation avoidance agreements (DTAA).
Residence for the founder: visa, permit and days
A UAE mainland or free-zone company sponsors a residence visa for its owner, valid for two years and renewed with the licence. It takes one trip for the medical test and the Emirates ID. An investor who puts AED 2,000,000 into property or a bank deposit can apply for a 10-year golden visa in the UAE, which needs no sponsor.
Citizens of EU countries register their residence in Cyprus. A founder from outside the EU registers the company with the Business Support Center as a company of foreign interests. The company qualifies when most of its shares belong to non-EU nationals, €200,000 is paid from abroad into its account at a Cyprus bank, and its office is separate from any home. It can then employ its owners and skilled staff from outside the EU. Permanent residence by investment starts at €300,000.
For tax, a person is resident in Cyprus after 183 days in the calendar year. It takes 60 days for someone who keeps a home on the island, works for or directs a Cyprus company and spends no more than 183 days in any other single country.
Company formation and bank account in Cyprus and the UAE: how long each takes
A Cyprus private company is entered by the Registrar of Companies after the name is approved and forms HE1, HE2 and HE3 are filed with the memorandum and articles. You sign remotely. In the UAE the free zone or the emirate's economic department issues the licence, and the establishment card and visas follow 1 to 3 weeks later.
The bank takes longer than the register in both countries. Bank of Cyprus, Eurobank Limited and Alpha Bank Cyprus open a company account in 4 to 12 weeks. A payment account with Wise or Revolut takes payments meanwhile. In our Cyprus files a new company with owners from outside the EU frequently waits 10 to 12 weeks at Bank of Cyprus. In the UAE an owner who already holds the residence visa has more banks to choose from.
We register both companies and keep their books in one account: opening a company in Cyprus costs from €1,699 and company formation in the UAE from $7,000 in a free zone, before VAT. A founder who wants an EU company at a lower rate can read Cyprus 15% vs Bulgaria 10%.
