Setting up a creative agency in the UAE

Mainland or free zone

A mainland company is licensed by the economic department of an emirate, such as Dubai's Department of Economy and Tourism. It can trade anywhere in the UAE, bid for government work and take an office anywhere in the emirate. Since 2021, most activities allow full foreign ownership on the mainland, so a local partner is no longer a requirement for a typical agency.

A free zone company is licensed by a free zone authority. The UAE has dozens of them, and several focus on media and creative businesses, including Dubai's media and creative clusters, twofour54 in Abu Dhabi and Sharjah's media city. Free zones offer simpler setup, packages with visas included, and in some cases corporate tax benefits on qualifying income.

The trade-off is where you can do business. Rules on free zone companies serving clients on the mainland vary by activity and by emirate. Many service businesses do invoice mainland clients from a free zone, but some clients, particularly government bodies, require a mainland licence. Ask your chosen free zone exactly what your licence permits, in writing, before you sign.

Licence activities

Your licence lists the activities your company may carry out. Adding one later is possible but costs time and money, so choose carefully at the start. An agency typically needs some combination of:

• Advertising agency or advertising services.
• Marketing management or marketing consultancy.
• Social media management or digital marketing services.
• Public relations.
• Event management, if you run launches and activations.
• Photography, film or content production, if you shoot in-house.
• Talent or influencer management, if you represent creators or book them for campaigns.

Some media and advertising activities need approval or a separate licence from the UAE Media Council, in addition to the trade licence. If you'll represent visiting creators or publish content yourselves, check this early.

Tax registration

Corporate tax applies to UAE businesses for financial years starting on or after 1 June 2023. For most companies it is 9% on taxable profit above AED 375,000, and every company subject to it must register, even if it expects to pay nothing. A free zone company may qualify for 0% on qualifying income if it meets the conditions, which include having adequate substance in the free zone. Getting this wrong can be expensive, so take advice.

VAT is separate. Registration is mandatory once taxable supplies pass AED 375,000 in twelve months, and voluntary from AED 187,500. The VAT invoicing guide covers what that involves.

Banking

Opening a corporate bank account usually takes longer than getting the licence. Banks carry out detailed checks on the owners, the business model and expected transactions. Prepare a short business plan, CVs of the shareholders, your expected clients and countries, and proof of address. Agencies that will pay creators abroad or receive payments from other countries should say so upfront.

Visas and hiring

Your licence and office determine how many residence visas the company can sponsor. Free zone packages often bundle a set number; mainland visa quotas usually depend on office size. Freelance creatives can sometimes be engaged on their own freelance permits rather than as employees, but check the terms of their permit before relying on it.

Emiratisation rules require private companies above a certain size in many sectors to employ a growing share of UAE nationals, and since 2024 they have extended to smaller companies in specified sectors. Check the Ministry of Human Resources and Emiratisation's current rules as your team grows.

Things that are hard to change later

• The company name and legal form.
• The jurisdiction: moving from a free zone to the mainland usually means a new company.
• Shareholders and ownership split, which affect banking and visas.
• The financial year, which sets your corporate tax periods.

Once you're trading

Put the basics in place from the first client: a statement of work for every project, sequential tax invoices, a standard influencer agreement and a proposal template. The templates library on this site has each of these, ready to adapt.