When did Federal Decree-Law No. 20 of 2025 take effect?

15 October 2025 per Gibson Dunn and Norton Rose Fulbright. Clyde & Co states 15 November 2025. Several provisions are phased over 12-24 months.

Company Registration in Innovation City

Government Fee

from 6 600 AED

Processing time

from 7 business days

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Ras Al Khaimah

Innovation City (formerly RAK DAO) is a free economic zone established in 2023 in the Emirate of Ras Al Khaimah, UAE. The free zone is focused on supporting companies operating in the fields of Web3, blockchain, artificial intelligence, metaverse, fintech, and digital assets. The free zone provides companies with access to advanced digital infrastructure and innovative solutions, creating a favorable environment for the development of technology projects and the scaling of international initiatives. Companies registered in Innovation City are permitted to conduct business both within the free zone and beyond the UAE. Innovation City issues the following type of business license: Business License The free zone actively develops partnerships with technology companies, blockchain platforms, and educational institutions, forming an ecosystem that fosters innovation and sustainable business growth. With its strategic focus on digital technologies and integration into the global innovation landscape, Innovation City has become an attractive platform for startups and technology companies aiming for international expansion and the creation of next-generation products.

What you get:

Access to Local and Global Markets
Innovation City
Remote Company Registration
Full Profit Control
Wide Range of Business Activities
Combining Business Activities
Ecosystem

About Innovation City

Innovation City (formerly RAK DAO) is a free economic zone established in 2023 in the Emirate of Ras Al Khaimah, UAE. The free zone is focused on supporting companies operating in the fields of Web3, blockchain, artificial intelligence, metaverse, fintech, and digital assets.

The free zone provides companies with access to advanced digital infrastructure and innovative solutions, creating a favorable environment for the development of technology projects and the scaling of international initiatives. Companies registered in Innovation City are permitted to conduct business both within the free zone and beyond the UAE.

Innovation City issues the following type of business license:

Business License

The free zone actively develops partnerships with technology companies, blockchain platforms, and educational institutions, forming an ecosystem that fosters innovation and sustainable business growth. With its strategic focus on digital technologies and integration into the global innovation landscape, Innovation City has become an attractive platform for startups and technology companies aiming for international expansion and the creation of next-generation products.

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We offer products Innovation City

Company setup
Services related to the establishment of a new company
Service

Suitable Targets

Local Business

Company registration for conducting business that requires a local presence in the UAE.

International Business

Company registration for conducting business both within specific jurisdictions and outside the UAE, including international wholesale trade and the provision of services at a global level.

Regional Representation

Establishing permanent establishments or subsidiaries to promote interests and coordinate operations in the Middle Eastern market.

Popular Business Fields

Information Technology & Communication
01
Arts, Entertainment & Recreation
02
Professional services
03
Media, Marketing & Publishing
04
Finance, Banking & Insurance
05
Education & Training
06

Innovation City Offices and Commercial Premises

1/2

Coworking

A workspace in a coworking with access during working hours

Offices

Individual OfficeA private office ranging from 27 sq.m. with unlimited access 24/7. The number of visa quotas is determined by the rented area, calculated at 9 sq.m. per visa quota.

1/5

Business Spaces

Specialized corporate spaces or business centers designed for business networking and corporate events, including offices, meeting rooms, training rooms, conference halls, and event spaces Meeting Rooms Collaboration and Event Spaces

1/2

Ecosystems

Comprehensive business environments that provide companies with industry-specific infrastructure, networking opportunities, regulatory support, and investment facilitation to drive growth and innovation Accelerator — a program for Web3 and digital asset startups, including blockchain, DeFi, NFT, and tokenization projects. Designed for teams at a post-MVP stage or with launched products, it provides mentorship, technical support, investor access, networking opportunities, and continued post-program guidance.

Requirements for Legal Entities Names

Must not violate the country laws or contain words that are obscene, indecent or generally offensive
Must not contain the names of Allah, Buddha or God, or any other religious terminology
Must not infringe any third party's intellectual property rights
Must not be identical or similar to local/global brands or registered trademarks
Must not contain geographical names, such as the names of emirates, cities, countries and other landmarks
Must not contain the names of local/international religious, political or governmental organizations

Authorized capital requirements

There is no minimum share capital requirement for Innovation City companies.

Tax Regime and Profit Management

Value Added Tax (VAT)

Since January 1, 2018, the UAE has implemented a VAT rate of 5%, which applies to most goods and services and is charged to companies operating within the country, except for those registered in designated zones.
A Designated Zone is a territory within a free zone that is treated as outside the UAE for tax purposes, allowing goods to be exempt from taxation, provided certain criteria are met. The main taxation rules in Designated Zones are as follows:

The Designated Zones are listed in the Cabinet Decision to Federal Decree-Law No. (8) of 2017 on Value Added Tax (VAT).
Goods moved between or within Designated Zones are not subject to tax.
The export and import of goods between a Designated Zone and a foreign company are also not subject to tax.

For local companies and those registered in Non-Designated Zones (free zones not included in the Designated Zones list), the standard tax rules set forth in the Federal Decree-Law on VAT apply.

Companies with an annual turnover exceeding AED 375,000 are required to register with the Federal Tax Authority (FTA) as VAT taxpayers.
Companies with a turnover between AED 187,500 and AED 375,000 may register on a voluntary basis.
Companies can offset VAT paid on purchases of goods and services (input VAT) against the VAT they collect on sales (output VAT), shifting the tax burden to the final consumer.
Some goods and services may be exempt from VAT or taxed at a 0% rate, such as international transportation, educational, and medical services.

Corporate Tax

As of June 1, 2023, the UAE has introduced a corporate tax at a rate of 9%, levied on the taxable net profit of companies with income exceeding AED 375,000.
A 0% rate is applied to taxable income not exceeding AED 375,000.
Charitable, non-profit organizations and medical institutions are fully exempt from corporate tax.

Excise Tax

Since October 1, 2017, the UAE has introduced an excise tax aimed at reducing the consumption of harmful products and funding healthcare initiatives. The tax applies to alcohol, tobacco products, and beverages containing added sugar, including energy drinks and carbonated beverages.Excise tax rates vary depending on the product category:

50% on carbonated drinks (excluding mineral water)
100% on tobacco products
100% on energy drinks
100% on electronic smoking devices and liquids used for them
50% on products containing added sugar or sweeteners.

Companies dealing with excise goods must register with the Federal Tax Authority (FTA), submit monthly declarations, and maintain records. Excise tax is paid upon the import, production, or release of goods for consumption in the UAE.

Customs Duties

Custom duties in the UAE are applied to most imported goods at a standard rate of 5% of the cost, insurance, and freight (CIF). Exceptions include certain categories of goods, such as medicines and food products, which may be exempt from duties or subject to a reduced rate.
Goods imported into UAE free zones are generally not subject to customs duties as long as they remain within these zones. However, when such goods are transferred to the UAE mainland, standard duties apply.

Personal Income Tax

In the UAE, personal income is not subject to taxation.
UAE citizens and residents are exempt from paying taxes on their personal income, including salaries, interest, dividends, inheritances, gifts, luxury goods, and capital gains.

Local Taxes and Fees

Individual emirates may impose specific local taxes and fees in line with their economic and social needs. These taxes and fees are aimed at supporting public services and implementing infrastructure projects.