UK Ltd · Dubai free zone · 2026
UK Ltd vs Dubai free zone tax — the honest version
Headline rates, side by side
Confirm UK bands with HMRC for the accounting period you are modelling. Confirm UAE tests with the Federal Tax Authority Free Zone Persons Guide (CTGFZP1) and a licensed advisor. This table is orientation, not a computation.
| Topic | UK Ltd | Dubai free zone company |
|---|---|---|
| Headline corporate rate | HMRC corporation tax: 25% main rate; 19% small-profits rate, with marginal relief between — confirm the bands for your accounting period. | UAE Corporate Tax: 0% on taxable income up to AED 375,000 and 9% above, unless a Qualifying Free Zone Person applies 0% only on Qualifying Income (and 9% on the rest). |
| “0%” story | No blanket 0% on trading profits. R&D and other reliefs are separate regimes. | Free zone incorporation is not a tax holiday. QFZP status has substance, qualifying-income, de minimis, and audit conditions — see our QFZP guide. |
| If you remain UK resident | Personal tax, dividend tax, and anti-avoidance (including how HMRC views a UAE company you control) still sit with UK advice. A Dubai licence does not switch that off. | The UAE company files UAE corporate tax where it is a taxable person. It does not, by itself, end UK reporting for a UK-resident individual. |
| What we are | We are not a UK accountancy practice. Keep your UK accountant on extraction, residency, and any double-tax analysis. | We match activity to a partner free zone and coordinate licensing. Tax elections stay with a licensed tax advisor. |
When a Dubai entity is the right next company
A UAE free zone licence is a formation and visa product. It is a strong fit when you have (or will have) UAE or regional activity, a need for residence visas, and a structure you can actually staff and substance in the UAE if you want QFZP treatment.
It is a weak fit as a paper box for UK trade you still run from the UK. In that case the UK Ltd remains the honest vehicle, and a Dubai company adds cost without moving the tax needle the way the ads imply.
Relocating yourself? Sequence is in Moving to Dubai from the UK. Housing after residency: buying Dubai property from the UK on CoreSpaces Realty.
FAQ
Is a Dubai free zone company taxed at 0% compared with a UK Ltd?
No. A UK Ltd faces HMRC corporation tax on its profits (main rate 25% in current HMRC bands, with a small-profits rate — confirm for the period). A UAE free zone company is inside UAE Corporate Tax. 0% on Qualifying Income is only for a Qualifying Free Zone Person that meets the statutory tests; other taxable income is 9%. Incorporation in a free zone is not enough.
Should I liquidate my UK Ltd and open in Dubai?
That is a UK tax, company-law, and commercial question — contracts, VAT, employees, and HMRC clearance are not a formation brochure. Many founders keep the UK Ltd for UK trade and add a UAE entity for UAE or regional work. Do not collapse the two on a blog table.
Does a Dubai visa make me non-UK-resident for tax?
No. UK residence and domicile tests are separate from a UAE residence visa. Get UK advice before you treat a move as a tax event.
Can a Dubai advisory firm rank against UK accountants on this topic?
We can explain the UAE formation and QFZP mechanics honestly, and we partner on the licence. We will not replace your UK accountant on Ltd extraction or residency. That split is the point of this page.
Where do I start if I am moving, not just comparing rates?
Sequence company, visa, then housing. Start with the moving-to-Dubai-from-the-UK guide and the Free Zone Matcher, then book a consultation for the licence.