When the Emirates introduced a 9% corporate tax, many decided the tax-free era was over and a squeeze would follow. Three years on, I see the opposite: the system is maturing, and the state is protecting young businesses. The main 2026 news for entrepreneurs is the extension of relief for small businesses.
In shortUAE corporate tax is 9% on profits above AED 375,000 a year. Small business relief for companies with revenue up to AED 3 million has been extended to the end of 2029, but registration and filing are still mandatory. An individual renting out their own apartment without a licence does not pay this tax.
How the tax works
UAE corporate tax is 9% on company profits above AED 375,000 a year. Profits up to that amount are taxed at zero. Special rules apply to companies in free zones that meet specific conditions.
Important for property investors: an individual who rents out their own apartment without a licence does not pay corporate tax on the rent.
What was extended
The UAE Ministry of Finance extended Small Business Relief to 31 December 2029. A company that applies it is treated as having no taxable profit.
Conditions:
- the company is a UAE tax resident;
- revenue of no more than AED 3 million in the current and all previous tax periods;
- the company is not part of a multinational group with global revenue above AED 3.15 billion;
- the company is not a “qualifying free zone person”.
Even with the relief, a company must register for tax, file returns and keep accounts.
Why this matters
Small and medium businesses make up about 95% of all companies in the UAE. Amid rising logistics costs and global instability, the state wants to give entrepreneurs predictability.
The saved tax goes into growth: purchasing, marketing, hiring. In essence, it is a long game. Taxes are collected from established large businesses, while young projects are allowed to grow in peace.
My advice
Don’t confuse “relief” with “no obligations”. Registration, reporting and transparent documents are mandatory. The era of “no documents, no reporting” in the Emirates is over — both banks and the tax authority now check everything.
Video: how to set up a company in the UAE in 2026
In this episode (in Russian) I explain how to open a business in the Emirates today, what has changed in the law and how taxes work, including corporate tax.
If you are opening a business in Dubai and also thinking about an office or a home, leave a request — we will advise on property and your first steps.
Information as of September 2026; not tax advice. Sources: UAE Ministry of Finance, DLA Piper (Gulf Tax Insights, August 2026).
