Re-domiciliation vs. New Company Setup in the UAE: Which Is Better?
As the United Arab Emirates (UAE) continues to evolve into a global business hub, entrepreneurs and international companies are increasingly considering the UAE as a prime destination for tax optimization, strategic expansion, and wealth protection. When entering the UAE market, businesses are generally faced with two key options: re-domiciliation (migrating an existing foreign company into the UAE) or setting up a brand-new company.
But which option is better in 2025? In this article, we explore the benefits, costs, legal considerations, tax implications, and strategic fit of both options, helping business owners make an informed decision.
What is Re-domiciliation?
Re-domiciliation, also known as corporate migration, allows a company registered in one jurisdiction to move its registration to another jurisdiction (such as the UAE) without losing its legal identity. This means the company retains its incorporation date, corporate history, contracts, and bank accounts while benefiting from UAE regulations.
Key Features of Re-domiciliation:
- Maintains existing corporate structure
- Retains assets and liabilities
- Legal identity continues
- Available in multiple UAE free zones (e.g., DMCC, ADGM, DIFC, RAKEZ)
- Requires proof that the origin jurisdiction permits re-domiciliation
What is New Company Setup in the UAE?
Setting up a new company in the UAE means incorporating a new legal entity under UAE law. This entity can be established in:
- Free Zones (e.g., DMCC, DIFC, ADGM)
- Mainland (DED-licensed)
- Offshore jurisdictions (e.g., JAFZA Offshore, RAK ICC)
This is ideal for companies starting from scratch or wanting a clean structure specifically tailored to UAE operations.
Re-domiciliation vs. New Company Setup
| Feature | Re-domiciliation | New Company Setup |
|---|---|---|
| Corporate history retained | ✅ Yes | ❌ No |
| Bank accounts continuity | ✅ Yes | ❌ No (new accounts required) |
| Operational reset | ❌ No | ✅ Yes |
| Legal identity continuity | ✅ Yes | ❌ No |
| Suitable for large international firms | ✅ Yes | ✅ Yes |
| Setup speed | ❌ Slower (4-8 weeks) | ✅ Faster (1-3 weeks) |
| Costs | ❌ Higher legal/admin costs | ✅ More cost-effective |
| Access to UAE Free Zones | ✅ Yes | ✅ Yes |
| Reputation management | ✅ Better (established entity) | ❌ Must build from scratch |
Tax Considerations in 2025
For Re-domiciled Companies:
- Subject to UAE Corporate Tax: 9% above AED 375,000 income
- Eligible for Free Zone 0% rate, if meeting substance & qualifying income rules
- Can continue using existing audited financials for filing
- Must notify tax authorities of status change
For New UAE Entities:
- Subject to same corporate tax rules
- Must file for TRN registration and maintain local accounting records
- May benefit from UAE tax treaties once compliant
UAE vs Other Jurisdictions: Corporate Tax Comparison
| Country | Corporate Tax Rate | Personal Income Tax | Redomiciliation Allowed |
| UAE | 9% (0% under 375K) | 0% | ✅ Yes |
| UK | 25% | Up to 45% | ❌ No |
| Malta | 35% (refunds apply) | Up to 35% | ✅ Yes |
| Singapore | 17% | Up to 22% | ❌ No |
Which Option Is Better?
Re-domiciliation is better if:
- You have a valuable corporate history or intellectual property
- Your entity has existing global contracts, banking, or licenses
- You are restructuring a multinational group
- You need continuity in branding or financial operations
New Company Setup is better if:
- You want to simplify your group structure
- You’re entering the UAE market for the first time
- You want a clean break from legacy issues
- You are a startup or SME looking for fast entry
How Affinitas DMCC Can Help
Whether you're relocating an international group or launching a startup, Affinitas DMCC specializes in:
- Re-domiciliation advisory & documentation
- UAE Free Zone company incorporation
- Corporate tax registration & compliance
- Accounting & bookkeeping packages
- Legal structuring & governance support
🔗 Contact us to book a free consultation
Frequently Asked Questions (FAQ)
Q1: Can I re-domicile any foreign company to the UAE? Only if your home jurisdiction allows re-domiciliation, and if the UAE Free Zone accepts your company type.
Q2: Will my business licenses be affected during re-domiciliation? You will need to apply for a UAE license. Some legacy approvals may need re-validation.
Q3: Is re-domiciliation recognized in all UAE Free Zones? No. Only select zones like DMCC, DIFC, RAKEZ, and ADGM allow re-domiciliation.
Q4: How long does the re-domiciliation process take? Typically 4–8 weeks, depending on document readiness and Free Zone.
Q5: Can I benefit from the 0% corporate tax in Free Zones? Yes, if your income qualifies and you meet substance requirements under Cabinet Decision No. 55.
