Star companies under UAE law: licences, Corporate Tax and VAT

Three ways to operate in the UAE

The right vehicle depends on the activity actually carried out, which determines the type of licence.

• Licensed individual. The talent can work in their own name under a free zone freelance permit, for example the Dubai Media City freelance licence issued by the Dubai Development Authority (permit fee AED 7,500, processing time stated as two working days) or the Freelance Program of the Creative Media Authority in Abu Dhabi (twofour54), which waives licence and registration fees for the first two years. Licences issued by the emirates' economic departments are also available; in Abu Dhabi these include a freelancer licence.
• Free zone company. For example an FZ-LLC registered with the Dubai Development Authority (Dubai Media City), a DMCC company or a twofour54 company in Abu Dhabi (twofour54 states that no minimum capital is required and that 100% ownership is possible).
• Mainland company. A company holding a commercial or professional licence from the emirate, in one of the available legal forms, including the Limited Liability Company (LLC).

The media free zones expressly list activities such as «Social Media Influencer», «Artist», «Actor», «Musician» and «Commentators: … Sports». The Creative Media Authority freelance licence allows work only with partner companies registered in the zone and does not allow the holder to hire employees.

The federal freelance work permit allows individuals to work independently without a sponsor or employer, including foreign nationals on self-sponsored residence visas. It governs the right to work, but it does not replace the commercial licence required for the Advertiser Permit.

The National Media Authority Advertiser Permit

Anyone who publishes advertising content on social media, whether paid or unpaid, must hold the Advertiser Permit. The permit was announced by the UAE Media Council on 30 July 2025, in a sector governed by Federal Decree-Law No. 55 of 2023 on media regulation, in force since 1 December 2023. Since 1 January 2026 the UAE Media Council's functions have passed to the National Media Authority (NMA), established by Federal Decree-Law No. 11 of 2025, which now issues the permit.

According to the NMA service page:

• applicants need a digital ID, passport, personal photo and a commercial licence;
• they must complete the required training programme;
• the permit is free for the first three years and then costs AED 1,000;
• it is issued within three working days.

The permit number must be clearly displayed on the accounts, and advertising may only be published from an account registered and linked to the permit. Exempt are individuals who promote their own products or services, or those of a company they own, through their personal account, and individuals under 18 engaged in educational, athletic, cultural or awareness activities.

The own-company exemption covers promotion of one's own brand. It does not cover the typical star company that sells promotional services to third-party brands.

Non-residents can apply for a visitor permit through a licensed advertising agency in the UAE: it lasts three months, can be extended up to a total of six months and costs AED 500.

The permit also matters to clients: the authority has called on companies and institutions to work only with licensed individuals. For an athlete or singer who publishes no promotional content on their own channels, whether the permit is needed should be checked case by case: it was presented as aimed at those publishing promotional content, but the NMA service page refers to advertising or media content. The activity licence and event permits apply in any case.

Concerts, events and live appearances

In Dubai, entertainment, sport, charity, religious and business events require a permit from the Department of Economy and Tourism (DET), applied for through the e-Permit portal. The obligation lies with the organiser or venue. The portal is for registered Dubai-based event organisers, who must enter the name, profession and passport number of new performers. The contract with the organiser should therefore state who applies for the permit and which information and documents the artist must provide.

Corporate Tax: the 0% and 9% rates

Corporate Tax is governed by Federal Decree-Law No. 47 of 2022, as amended. Article 3 and Cabinet Decision No. 116 of 2022 provide for:

• 0% on taxable income up to AED 375,000;
• 9% on the portion above that amount.

The 0% band applies once per taxable person, even if it carries on several businesses. Artificially splitting a business to multiply the band is treated as an arrangement to obtain a tax advantage under Article 50, the general anti-abuse rule.

The individual: the AED 1 million threshold

A resident or non-resident individual carrying on a business in the UAE is subject to Corporate Tax only if total turnover from that business exceeds AED 1,000,000 in a calendar year (Cabinet Decision No. 49 of 2023). The following do not count towards the threshold:

• wages;
• personal investment income;
• personal real estate investment income.

The Federal Tax Authority (FTA) guide on the taxation of natural persons looks specifically at an influencer who creates sponsored content for brands and receives commissions and products. Turnover includes the market value of in-kind consideration: with turnover of AED 3,400,000, the business is subject to Corporate Tax.

A resident individual who exceeds the threshold must register by 31 March of the following year; a non-resident within three months of meeting the requirements (FTA Decision No. 3 of 2024, Article 5).

If the talent is employed by their own company, the salary does not count towards the threshold. If the talent instead invoices the company as a freelancer, those amounts form part of turnover.

Small Business Relief extended to 2029

Small Business Relief (Article 21) allows a resident person whose revenue does not exceed AED 3,000,000 in the tax period and in previous tax periods to be treated as having derived no taxable income.

Ministerial Decision No. 131 of 2026, issued on 29 July 2026, extended the relief to tax periods ending on or before 31 December 2029, instead of 31 December 2026 as originally provided by Ministerial Decision No. 73 of 2023. The FTA's 2023 Small Business Relief guide still shows the earlier date.

The conditions of Ministerial Decision No. 73 of 2023 still apply:

• the election is no longer available once revenue has exceeded the threshold in any relevant or previous tax period;
• tax losses and net interest expenditure from relief periods cannot be carried forward;
• Constituent Companies of multinational groups as defined in Cabinet Decision No. 44 of 2020 on Country-by-Country Reporting (consolidated revenue of AED 3.15 billion or more in the preceding financial year) and Qualifying Free Zone Persons cannot elect;
• artificial separation of a business to stay below the threshold is treated as abuse under Article 50.

Free zones: why 0% does not normally apply

A free zone company pays 0% on qualifying income only if it is a Qualifying Free Zone Person (QFZP). Article 18 and Ministerial Decision No. 229 of 2025 (Article 5) require, among other things, adequate substance in the UAE, qualifying income, compliance with the transfer pricing rules and audited financial statements.

Ministerial Decision No. 229 of 2025, which replaced Decision No. 265 of 2023 with effect from 1 June 2023, lists the Qualifying Activities: among them manufacturing and processing, trading of Qualifying Commodities, holding of shares, ships, reinsurance, fund and wealth management, headquarter and treasury services to related parties, aircraft financing and leasing, distribution from a Designated Zone and logistics. Media, talent and influencer activities are not included. The exception is income from transactions with other Free Zone Persons that are the beneficial recipients: it is qualifying even if the activity is not a Qualifying Activity, provided it is not an Excluded Activity (Cabinet Decision No. 100 of 2023, Article 3).

Transactions with natural persons are Excluded Activities, with a few exceptions that are not relevant here. Non-qualifying revenue is permitted within a de minimis limit equal to the lower of 5% of total revenue and AED 5,000,000. A company that exceeds it loses its status from the start of the tax period and for the following four tax periods. If the company does hold QFZP status, its non-qualifying income within the de minimis is taxed at 9% without the 0% band up to AED 375,000 (Article 3(2) of Federal Decree-Law No. 47 of 2022), and Small Business Relief is not available.

As a result, a free zone star company selling promotional services, appearances, performances or image licences to mainland or foreign brands does not normally meet the QFZP conditions. It is taxed like a mainland company, at 0% up to AED 375,000 and 9% above, and may elect for Small Business Relief if it meets the requirements. The free zone remains useful for licensing, visas and company ownership, not as a 0% tax regime.

Image rights and music royalties

The Qualifying Intellectual Property regime covers patents, copyrighted software and rights functionally equivalent to a patent (Cabinet Decision No. 100 of 2023). Royalties from image rights or musical works fall outside this definition and do not benefit from that regime.

Payments between the talent and the company

The talent and their company are Related Parties where the talent, alone or with their Related Parties, owns 50% or more of the company or controls it, including through significant influence over the conduct of the business (Article 35). Relatives up to the fourth degree of kinship or affiliation are also Related Parties. Transactions between them must follow the arm's length principle (Article 34).

A talent who is an owner or director is also a Connected Person (Article 36): payments and benefits received from the company are deductible only if they correspond to the market value of the service and are incurred wholly and exclusively for the company's business.

Documentation obligations are proportionate:

• a master file and local file are required only with revenue of at least AED 200,000,000 or in multinational groups with revenue of at least AED 3,150,000,000 (Ministerial Decision No. 97 of 2023);
• in the tax return, the Connected Persons schedule is due where payments and benefits exceed AED 500,000 per Connected Person, together with its Related Parties;
• the Related Parties schedule is due above AED 40,000,000 in total.

For a resident talent, salary is not subject to personal tax in the UAE; the FTA can nevertheless adjust, at company level, the part of the payment that exceeds market value.

Substance, company residence and ESR

The Economic Substance Regulations no longer apply to financial years ending after 31 December 2022 (Cabinet Resolution No. 98 of 2024); obligations for earlier years remain. Substance now matters for Corporate Tax in two ways:

• for QFZP status, which requires core income-generating activities in the free zone and adequate assets, qualified full-time employees and operating expenditure;
• for company residence: a foreign company effectively managed and controlled in the UAE is a UAE resident (Article 11) and is taxed on its worldwide income.

A talent living in the UAE who manages a foreign company from there may therefore make that company a UAE taxable person.

VAT: rate, thresholds, barter and foreign clients

UAE VAT is charged at 5% (Federal Decree-Law No. 8 of 2017). Registration is:

• mandatory if taxable supplies over the previous twelve months exceeded AED 375,000, or are expected to exceed it in the next thirty days;
• voluntary above AED 187,500.

Zero-rated supplies also count towards the threshold; a person making only zero-rated supplies may apply for an exception from registration (Articles 15 and 19 of Federal Decree-Law No. 8 of 2017).

Services supplied to a foreign client are zero-rated if the conditions of Article 31 of the Executive Regulation, as amended in 2024, are met: the client has no place of residence in a GCC Implementing State and is outside the UAE when the services are performed; a presence of less than thirty days that is not effectively connected with the supply does not count. Zero-rating does not apply where the service is received in the UAE by another person, such as an employee or director of the non-resident client, who is not entitled to full input tax recovery. Payments from foreign platforms can therefore be zero-rated only if these conditions are met; services to UAE brands bear 5%. The exception is cultural, artistic and sporting services. They are supplied where they are performed (Article 30(6) of Federal Decree-Law No. 8 of 2017), and Article 31 of the Executive Regulation excludes from zero-rating services treated as supplied in the UAE. A concert, sporting performance or appearance performed in the UAE therefore bears 5% even for a foreign client; those performed outside the GCC Implementing States are zero-rated.

On barter transactions, the FTA (Public Clarification VATP042 of 28 April 2025) considers a VAT-registered influencer who supplies marketing services with a market value of AED 1,000, including VAT, to a restaurant in exchange for AED 900 and a meal worth AED 100. The influencer must account for VAT on the full value of the supply, AED 47.62 (1,000 × 5/105); the restaurant in turn accounts for VAT on the meal, AED 4.76. Products and services received in exchange for content must therefore be valued and invoiced.

UAE tax residence and the Tax Residency Certificate

An individual is UAE tax resident if any of the conditions in Article 4 of Cabinet Decision No. 85 of 2022 is met:

• their usual or primary place of residence and the centre of their financial and personal interests are in the UAE;
• they are physically present in the UAE for 183 days or more in a twelve-month period;
• they are present for 90 days or more in a twelve-month period, are a UAE or GCC national or hold a valid residence permit, and have a permanent place of residence in the UAE or carry on employment or a business there.

The centre of interests takes into account occupation, family and social relations, cultural activities, place of business and the place from which property is administered; parts of a day count as days (Ministerial Decision No. 27 of 2023). The Tax Residency Certificate for treaty purposes is obtained from the FTA (Ministerial Decision No. 247 of 2023). Leases, days of presence, licences and activities should be documented consistently.

Withholding tax, minimum tax and e-invoicing

• Payments to non-residents. Article 45 sets withholding tax on the UAE-sourced income of non-residents at 0%, to the extent the income is not attributable to a permanent establishment or nexus in the UAE. The Cabinet may set other rates; as at 15 November 2026 no such decision has been identified.
• Domestic Minimum Top-up Tax. The 15% minimum tax (Cabinet Decision No. 142 of 2024) applies only to multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years. It does not concern the individual talent unless their company joins a group of that size.
• E-invoicing. The system applies to any person, natural or juridical, conducting Business in the UAE, for every Business Transaction, subject to the exclusions provided (Ministerial Decision No. 243 of 2025, Articles 3 and 4; Article 4 was replaced by Ministerial Decision No. 197 of 2026), even if not registered for VAT. Transactions with final consumers (B2C) are excluded until a decision of the Minister (Ministerial Decision No. 244 of 2025, Article 5(2)), but a person receiving supplies from other businesses must still join. Persons with revenue below AED 50,000,000 must appoint an accredited service provider by 31 March 2027 and implement the system by 1 July 2027 (Ministerial Decision No. 244 of 2025, Article 5). For failure to implement the system on time (including failure to appoint an accredited service provider), Cabinet Decision No. 173 of 2026 sets a penalty of AED 5,000 for the first violation and AED 5,000 for each month or part of a month of delay, up to AED 50,000 in any twelve consecutive months.

What to do in practice

1. Map the activities: promotional content, performances, sponsorships, image licences, royalties, appearances; for each, the client, where the service is used and the form of payment, cash or in kind.
2. Choose the vehicle and licence consistent with those activities, checking that the commercial licence supports an Advertiser Permit application.
3. Obtain the Advertiser Permit and display its number on the accounts, if promotional content is published.
4. Estimate the tax burden without relying on a free zone 0% rate: 0% up to AED 375,000, 9% above, Small Business Relief for tax periods ending by 2029 if revenue stays within AED 3,000,000.
5. Set payments between the talent and the company at market value, with written contracts and proportionate documentation.
6. Manage VAT: monitor the threshold, invoice barter at market value and check the zero-rating conditions for foreign clients.
7. Document the talent's residence and, where needed, apply for a Tax Residency Certificate.
8. Plan for e-invoicing under the applicable timetable.

Risks to assess

• Advertising without an Advertiser Permit, without a commercial licence or without the permit number displayed; the authority has called on companies to work only with licensed individuals.
• Exceeding the AED 1,000,000 threshold as an individual without registering within the deadline (31 March of the following year for residents, three months for non-residents), including in-kind consideration.
• Splitting the business across several persons to multiply the 0% band or Small Business Relief: the FTA looks at legitimate commercial purpose and at financial, economic and regulatory ties between the persons.
• Non-arm's length payments from the company to the talent as owner or director.
• A free zone presented as a 0% regime for non-qualifying activities, with loss of status for five tax periods if the de minimis limit is exceeded.
• Image or music royalties treated as qualifying intellectual property.
• A foreign company managed in practice from the UAE, which becomes resident and taxable on worldwide income.
• VAT: threshold exceeded, barter not invoiced, zero-rating applied to services used in the UAE or to performances in the UAE for foreign clients.
• Undocumented residence and no Tax Residency Certificate when one is needed.