This journey assumes
- The UAE parent is a company incorporated in the UAE and is not a bank, insurer or other regulated financial institution.
- The UK company will carry on an unregulated trading or services business; FCA-regulated activities are out of scope.
- The UK company is a new company, not an acquisition of an existing UK business, so UK acquisition screening is not triggered at formation.
- Some staff will move from the UAE to the UK; others will be hired locally.
- Rules are stated as at 19 October 2026; the UK-GCC free trade agreement is concluded but not in force.
If any assumption is wrong for your business, the conclusions change. Ask WONE Global to re-run the analysis with your facts.
Both sides of the border, issue by issue
Each row is one part of the work. The left and right columns show what each country's rules require, so you can see where one side's decision constrains the other.
UK subsidiary or UK branch, and who controls it
A UK private limited company is quick to form with Companies House, can have non-resident directors and is UK tax resident because it is incorporated in the UK. A UK branch of the UAE company is registered as an overseas company and is also within UK corporation tax. On the UAE side, the parent's own tax residence and any free-zone status must not be disturbed by how the UK business is run.
- A private limited company is registered with Companies House for GBP 100 online; directors need not live in the UK but the company needs a UK registered office address.12
- Directors and people with significant control (generally over 25% of shares or votes) must verify their identity with Companies House, which has been a legal requirement since 18 November 2025; the UAE parent and its controllers will be recorded in the PSC regime.34
- A branch instead requires form OS IN01 within one month of opening a UK establishment, and corporation tax is charged on a foreign company's UK branch as on a UK company.56
- The subsidiary is UK resident because it is UK incorporated; the UAE parent itself could also become UK resident if its central management and control were exercised in the UK, so board practice matters on both sides.78
- For the UK-UAE treaty, the UAE parent is a UAE resident because it is incorporated or recognised under UAE law; dual residence is resolved by mutual agreement, failing which treaty benefits are lost.9
- The FTA treats key management and strategic decisions taken in the UAE, board meetings in the UAE and UAE-resident board members as indicators of effective management in the UAE, so keep the parent's decision-making in the UAE.10
- A free-zone parent that is a Qualifying Free Zone Person gets 0% only on qualifying income; income it earns from the UK subsidiary, such as service fees or royalties, needs checking against those rules.11
UK and UAE corporate tax, VAT and transfer pricing
The UK company pays corporation tax at up to 25% and registers for VAT above GBP 90,000 of taxable turnover; accounts and tax are due within nine months of year end. The UAE parent pays 9% UAE corporate tax above AED 375,000. Transfer pricing applies on both sides to every charge between them, and both countries apply Pillar Two to large groups.
- UK corporation tax is 25% on profits over GBP 250,000 and 19% under GBP 50,000, with marginal relief between.12
- Annual accounts go to Companies House within nine months of year end (first accounts within 21 months of incorporation), and corporation tax is paid within nine months and one day.13
- VAT registration is compulsory once taxable turnover exceeds GBP 90,000 in 12 months or is expected to within 30 days.14
- Groups with consolidated revenue of EUR 750 million or more must keep a UK master file and local file and are within the UK's 15% Pillar Two top-up taxes.1516
- The UAE parent pays corporate tax at 0% up to AED 375,000 of taxable income and 9% above it.17
- UAE transfer pricing rules apply to transactions with related parties abroad, so charges to and from the UK company (management fees, royalties, loans, secondments) must be at arm's length and disclosed with the UAE return where required.1819
- If the group's consolidated revenue is EUR 750 million or more, the UAE top-up tax applies a 15% minimum rate to the UAE entities.20
The UK-UAE tax treaty, investment treaty and UK-GCC agreement
The 2016 UK-UAE treaty, in effect since 1 January 2017, exempts dividends and royalties from source-state tax and exempts interest where its conditions are met, each subject to a main purpose test. The 1992 UK-UAE investment treaty is in force. The UK-GCC free trade agreement was concluded on 20 May 2026 but is not yet in force.
- Dividends from the UK company to the UAE parent are exempt from UK tax under Article 10 of the treaty, subject to its main purpose test.2122
- UK domestic law requires basic-rate income tax to be deducted from yearly interest and from royalties paid abroad; the treaty can remove this (Articles 11 and 12), but relief is not automatic and the UAE parent must apply to HMRC, for example on form DT Company.2324252627
- The UK-GCC agreement, when in force, adds an investment chapter with investor-state dispute settlement; GOV.UK states the UK-UAE investment treaty remains in place.2829
- Article 21 of the treaty requires the UAE to allow a deduction for UK tax paid by a UAE resident; how this interacts with UAE corporate tax on foreign income should be confirmed with a UAE adviser.30
- The UAE-UK bilateral investment treaty has been in force since 15 December 1993 and protects qualifying UAE investments in the UK.31
- Treaty residence for the UAE parent turns on UAE incorporation or recognition, which a UAE-incorporated company meets; a tax residence certificate will normally be needed to claim UK relief.925
Staff, visas and National Insurance
UAE staff moving to the UK need a UK visa, usually through sponsorship, and the UK company must check every worker's right to work. There is no UK-UAE social security agreement, so UK National Insurance rules apply to UK employment without treaty relief.
- The Skilled Worker route generally needs a salary of at least GBP 41,700 and the going rate, and the UK company usually needs a sponsor licence; sponsors pay the Immigration Skills Charge of GBP 1,320 for the first 12 months (GBP 480 for small sponsors).3233
- The UK company must check that every worker has the right to work in the UK before employment starts.34
- Employer National Insurance is 15% on earnings above GBP 5,000 a year in 2026-27.35
- The UAE is not on HMRC's list of social security agreement countries, so there is no certificate of coverage for staff moving between the UAE and UK companies.36
- Salary costs of staff seconded or recharged between the UAE parent and the UK company are related-party transactions under UAE transfer pricing rules.18
Funding the UK company and moving money back
The UK has no exchange controls, and the dirham is pegged to the US dollar. A UK bank will verify the UAE parent's ownership and control before opening an account. Dividends can be paid only out of distributable profits and carry no UK tax under the treaty.
- There is no UK exchange control legislation, so share capital, loans and profit repatriation need no approval.37
- UK banks must identify and verify a corporate customer, its directors and senior managers and understand its ownership and control structure, so expect to document the UAE group structure.38
- Dividends may be paid only out of accumulated realised profits less realised losses.39
- The Central Bank of the UAE maintains a fixed dirham-US dollar rate, so currency risk on sterling flows is effectively a sterling-dollar risk.40
- Dividends received by the UAE parent are within the scope of UAE corporate tax at 9% unless an exemption applies; the participation exemption conditions were not confirmed.17
Structures to consider
These are the structures businesses commonly weigh, not a recommendation. The right one depends on the facts listed under "What we need from you".
What has to happen first
- United Arab EmiratesUAE board approves the UK project, the investment amount and whether the UK entity will be a subsidiary or a branch.
- United Arab EmiratesDecide which UAE company will own the UK company (operating company or free-zone holding company) and check the UAE tax effect.After step 1
- United KingdomDirectors and people with significant control verify their identity with Companies House.After step 1
- United KingdomIncorporate the UK company with a UK registered office (or file OS IN01 for a branch).After step 2, 3
- United KingdomOpen a UK bank account, providing evidence of the UAE group's ownership and control.After step 4
- United KingdomRegister for corporation tax and, once over GBP 90,000 or expected to be, for VAT; set up PAYE and auto-enrolment.After step 4
- United KingdomApply for a sponsor licence if staff will move from the UAE, then assign certificates of sponsorship and run right to work checks.After step 4, 5
- Both sidesPut intercompany agreements in place (services, royalties, loans, secondments) priced at arm's length under UK and UAE rules.After step 2, 4
- Both sidesApply to HMRC for treaty relief on interest or royalties before payments start, using a UAE tax residence certificate.After step 8
- Both sidesOngoing: UK accounts and corporation tax within nine months of year end, PSC and confirmation statements, UAE corporate tax return with related-party disclosures, and board practice that keeps each company's management where intended.After step 6, 8
What we need from you before anyone can advise
- Whether the UAE parent is a mainland company or a free-zone company, and whether it is a Qualifying Free Zone Person.
- Expected UK revenue, profit and headcount, and how many staff will move from the UAE.
- Group consolidated revenue (Pillar Two and UK transfer pricing documentation thresholds).
- Whether the UK company will pay royalties, interest or service fees to the UAE.
- Who will sit on the UK board and where UK and UAE strategic decisions will in practice be taken.
- Whether the UK business will need FCA authorisation or another sector licence.
- Whether outside investors will come in at UK or UAE level.
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- UAE corporate tax treatment of dividends and gains from the UK subsidiary (participation exemption conditions under Article 23 of the Corporate Tax Law) could not yet be checked: the Ministry of Finance law text and the FTA topic page were rate limited.
- Whether the UAE imposes any exchange control or outward investment approval for a UAE company investing in the UK was not confirmed on an official page.
- The UK Expansion Worker route and other Global Business Mobility routes for staff setting up a UK business could not yet be checked on GOV.UK; only the Skilled Worker route is covered.
- Whether UAE staff coming to work in the UK can stay in a UAE pension or social security scheme for any period, and any UK National Insurance relief for inbound workers, was not confirmed.
- UK transfer pricing exemption for small and medium-sized enterprises and its thresholds were not researched.
- UK withholding on dividends: the UK treaty exempts dividends from source tax; UK domestic dividend withholding rules were not separately source-checked.
- The full conditions in Article 11(3) of the UK-UAE treaty for the interest exemption could not yet be checked in full; whether a privately owned UAE parent qualifies must be confirmed.
- The UK-GCC agreement's legal text, the UAE's commitments and its entry into force date are not yet published; UNCTAD and GOV.UK differ on whether it has been signed.
- UK National Security and Investment Act screening was not covered because the journey assumes a new company rather than an acquisition.
Brief for your advisers
Questions to put to your advisers in each country. Copy them, or download them as a text file to send with your requirement.
- UK corporate adviser: subsidiary or branch for our activities, and what Companies House identity and PSC filings will our UAE owners need?
- UK tax adviser: what will UK corporation tax and VAT look like in the first two years, and how do we claim treaty relief on interest and royalties paid to the UAE?
- UAE tax adviser: how will dividends, royalties and service fees from the UK company be taxed in our UAE company, and does the participation exemption apply?
- UAE tax adviser: if our parent is in a free zone, will UK-source income affect our Qualifying Free Zone Person status?
- Both tax advisers: what transfer pricing method and documentation will satisfy HMRC and the FTA for charges between the two companies?
- UK immigration adviser: which visa route fits each person moving from the UAE, including any route for staff setting up a new UK business, and what does sponsorship cost us?
- UK bank: what documents will you need on the UAE parent, its directors and ultimate owners to open the account?
- Disputes counsel: what protection does the UK-UAE investment treaty give us, and what will change when the UK-GCC agreement comes into force?
Who can help, on each side
United Kingdom
- Setting up and running a company · Arranged by WONE Global on request
- Tax and structuring · Arranged by WONE Global on request
- Accounting and annual filings · Arranged by WONE Global on request
- Disputes and arbitration · Arranged by WONE Global on request
- Employment, payroll and immigration · Arranged by WONE Global on request
- Banking and capital · Arranged by WONE Global on request
- Payments and currency · Arranged by WONE Global on request
- Treasury and funding · Arranged by WONE Global on request
United Arab Emirates
- Setting up and running a company · Led by Dr Hajra Nazir
- Tax and structuring · Led by Priju Dominic
- Accounting and annual filings · Led by Priju Dominic
- Disputes and arbitration · Arranged by WONE Global on request
- Employment, payroll and immigration · Arranged by WONE Global on request
- Banking and capital · Arranged by WONE Global on request
- Payments and currency · Arranged by WONE Global on request
- Treasury and funding · Arranged by WONE Global on request
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
Registering a private limited company with Companies House costs £100 online or through software and £124 on paper. Private companies limited by shares or guarantee; fees as listed on the Companies House fees page on the check date.
The page does not give the date from which these fees apply; it was updated 25 September 2026.
Directors do not have to live in the UK, but the company must have a UK registered office address. Private limited companies.
Identity verification for directors and people with significant control became a legal requirement at Companies House on 18 November 2025. Introduced under the Economic Crime and Corporate Transparency Act 2023. New incorporations must include each director's Companies House personal code.
A person with significant control is someone who holds more than 25% of the shares or voting rights, can appoint or remove a majority of the board, or exercises significant influence or control. Companies keep a PSC register at Companies House that is public and can never be blank; changes are generally reported within 14 days.
An overseas company that opens a UK establishment must send form OS IN01 to Companies House within one month of opening for business, with a £124 fee. Overseas companies with a UK branch or place of business.
Corporation tax is paid by UK limited companies and by foreign companies with a UK branch or office. Clubs, co-operatives and other unincorporated associations are also within scope.
Under UK law a company incorporated in the UK is resident in the UK for tax purposes. Corporation Tax; statutory incorporation rule in CTA 2009 s14, subject to the exceptions in CTA 2009 Schedule 2.
Under the UK case-law test, a company is also UK resident if its central management and control is exercised in the UK, meaning the highest level of control of the business. Applies to companies not incorporated in the UK; derived from De Beers Consolidated Mines Ltd v Howe. Control may be exercised by the board or by another person, such as a parent, that has in fact assumed it.
Under Article 4 of the UK-UAE convention, a person other than an individual is a UAE resident if incorporated or otherwise recognised under UAE law; where a company is resident in both states, the competent authorities endeavour to agree its residence, and without agreement it is not resident in either state for treaty benefits except under Articles 21 to 23. The Protocol lists factors such as where senior management is carried on and where headquarters are located.
The FTA lists the making of key management and strategic decisions in the UAE, board meetings held in the UAE and UAE-resident board members as indicators of effective management and control in the UAE, and says dual residence is resolved under double tax agreements. Relevant where the Indian parent's management also directs the UAE company.
A Qualifying Free Zone Person can benefit from a 0% corporate tax rate on its qualifying income. Free-zone entities only, and only where all conditions are met. Non-qualifying income is taxed at 9%.
The main rate of UK corporation tax is 25% for profits over £250,000 and the small profits rate is 19% for profits under £50,000, for the financial years 2025 and 2026. UK-resident companies and non-resident companies with a UK permanent establishment.
A private company must file annual accounts with Companies House within 9 months of its financial year end (first accounts within 21 months of incorporation), pay corporation tax within 9 months and 1 day of the end of its accounting period, and file its Company Tax Return within 12 months. Private limited companies. Different payment dates apply to large and very large companies.
A UK-established business must register for VAT when taxable turnover for the last 12 months goes over £90,000, or when it expects to exceed £90,000 in the next 30 days. Registration is due within 30 days of the end of the month in which the threshold was crossed (12-month test) or by the end of the 30-day period (forward-looking test).
UK entities of multinational groups with consolidated revenue of at least €750 million must keep a master file and local file in the format of the OECD Transfer Pricing Guidelines. Transfer Pricing Records Regulations 2023; corporation tax accounting periods beginning on or after 1 April 2023. The group must have enterprises resident in two or more jurisdictions and the UK entity must have material controlled transactions.
Effective date confirmed on INTM450010.
The UK applies Pillar Two through Multinational Top-up Tax and Domestic Top-up Tax for accounting periods starting on or after 31 December 2023, imposing a 15% minimum effective rate on groups with consolidated revenue of €750 million or more. Groups meeting the revenue test in at least 2 of the previous 4 accounting periods. Multinational Top-up Tax is the UK's income inclusion rule and undertaxed profits rule; Domestic Top-up Tax is a domestic minimum tax.
Corporate tax is charged at 0% on taxable income up to AED 375,000 and at 9% on taxable income above AED 375,000. Federal; applies in all seven emirates and to mainland and free zone businesses unless the Qualifying Free Zone Person regime applies. Exempt persons are listed in ae-tax-017.
Rates set by Article 3(1) of Federal Decree-Law No. 47 of 2022 with the threshold fixed by this Cabinet Decision.
UAE transfer pricing rules apply to transactions with related parties and connected persons, whether they are on the mainland, in a free zone or abroad. Covers the UAE company's dealings with its Indian parent and sister companies.
Taxpayers must disclose related-party transactions with the tax return when required, keep a master file and local file where Ministerial conditions are met, and provide transfer pricing documentation within 30 days of an FTA request. Applies to transactions with related parties and connected persons, domestic or cross-border, whether the parties are on the mainland, in a free zone or abroad (FTA Corporate Tax FAQs).
The revenue thresholds for master file and local file are set by Ministerial Decision (understood to be Ministerial Decision No. 97 of 2023) and were not confirmed here.
The UAE top-up tax applies a 15% minimum effective tax rate to UAE entities of multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding fiscal years. Fiscal years beginning on or after 1 January 2025. Groups operating only within the UAE are out of scope. The FTA published a scope and registration guide in October 2026.
The UK-UAE double taxation convention was signed on 12 April 2016, entered into force on 25 December 2016 and has effect for taxes withheld at source on amounts paid or credited on or after 1 January 2017. Other taxes: taxable years and UK corporation tax financial years beginning on or after 1 January 2017. GOV.UK also publishes a synthesised text with the Multilateral Instrument, with effect from 1 January 2020 for withholding taxes and 1 April 2020 for UK corporation tax.
Under Article 10(2)(a) of the UK-UAE convention, dividends paid by a company resident in one state to a beneficial owner resident in the other are exempt from tax in the paying company's state. Dividends paid out of income from immovable property by certain property investment vehicles may be taxed at up to 15% (Article 10(2)(b)); Article 10(6) denies relief where obtaining the benefit was a main purpose of creating or assigning the shares.
Companies paying yearly interest arising in the UK must deduct income tax at the savings basic rate when making the payment. Income Tax Act 2007 s874; applies to payments by companies and to payments to persons whose usual place of abode is outside the UK. Treaty relief can reduce or remove the deduction, for example under the Double Taxation Treaty Passport scheme or with an HMRC direction.
The savings basic rate figure was not separately confirmed on an opened page; the basic rate on earnings for 2026-27 is 20%. The legislation text flags an amendment to the wording from tax year 2027-28; confirm the rate for payments from 6 April 2027.
Royalties for the use of intellectual property paid to an owner whose usual place of abode is outside the UK must be paid with income tax deducted at the basic rate. Income Tax Act 2007 s906. Payments for copies of works exported for distribution outside the UK are excluded. A company may deduct only the treaty rate if it reasonably believes the recipient is entitled to treaty relief (ITA 2007 s911).
Treaty-rate deduction without prior clearance is described in HMRC Company Taxation Manual CTM35270.
Relief from UK withholding tax under a double taxation treaty is not automatic: the overseas recipient applies to HMRC (for companies, on form DT Company) or uses the Double Taxation Treaty Passport scheme for loans. Interest, royalties and similar payments to non-UK residents.
Under Articles 11(2) and 11(3) of the UK-UAE convention, interest is taxable only in the beneficial owner's state of residence where one of the conditions in Article 11(3) is met. Conditions include categories of beneficial owner such as listed companies; Article 11(8) contains a main purpose test. Whether a privately owned UAE parent qualifies must be checked against the full Article 11(3) text.
Under Article 12(1) of the UK-UAE convention, royalties arising in one state and beneficially owned by a resident of the other are taxable only in the other state. Article 12(5) contains a main purpose test; UK domestic withholding on royalties applies unless treaty relief is obtained.
The UK concluded negotiations on a free trade agreement with the Gulf Cooperation Council on 20 May 2026; GOV.UK states the agreement is not yet in force and will apply only once the UK and all GCC member states complete their domestic procedures. Covers all six GCC states, including the UAE. GOV.UK says signature follows legal verification of the text.
The UNCTAD treaty database lists the agreement as signed on 20 May 2026; GOV.UK describes 20 May 2026 as the conclusion date.
The UK-GCC conclusion summary describes an investment chapter with investor protections and investor-state dispute settlement, and states that the UK-UAE bilateral investment treaty remains in place while the UK will terminate its treaties with Oman and Bahrain when the agreement enters into force. Applies only once the agreement is in force.
Under Article 21 of the UK-UAE convention, the UAE allows a deduction from UAE tax equal to UK tax paid by a UAE resident, and the UK allows UAE tax as a credit against UK tax on the same income. Relief is subject to each state's domestic rules on foreign tax relief.
UNCTAD's investment agreements database lists the United Arab Emirates-United Kingdom bilateral investment treaty, signed on 8 December 1992, as in force since 15 December 1993. Protects qualifying UAE investments in the UK and UK investments in the UAE under its terms.
A Skilled Worker visa generally requires a salary of at least £41,700 a year and at least the going rate for the occupation code, and the employer usually needs a sponsor licence. Immigration Rules Appendix Skilled Worker, option A (SW 4.4). Other options in the Appendix may allow different thresholds. Going rates are based on a 37.5-hour week.
Sponsor licence requirement. The Appendix page does not state the date from which £41,700 applies; it was last updated 8 October 2026. Reused from market guide claim gb-people-012.
Sponsors pay an Immigration Skills Charge of £1,320 for the first 12 months of each sponsored worker (£480 for small or charitable sponsors), plus £660 (or £240) for each further 6 months. Skilled Worker and similar sponsored routes; some exemptions apply.
The page does not state the date from which these amounts apply. Reused from market guide claim gb-people-013.
Employers must check that a job applicant is allowed to work in the UK before employing them, and can face a civil penalty for employing an illegal worker without a correct check. UK-wide.
Penalty amounts were not confirmed on an opened page.
Employers pay secondary Class 1 National Insurance at 15% on earnings above £5,000 a year (£96 a week) in 2026-27. Employees pay 8% between £12,570 and £50,270 a year and 2% above. Employment Allowance of £10,500 can reduce eligible employers' bills.
Reused from market guide claim gb-people-002.
HMRC's list of countries with which the UK has social security agreements does not include the United Arab Emirates. Agreements listed: Barbados, Bermuda, Canada, Chile, Gibraltar, Iceland, India, Ireland, Isle of Man, Israel, Jamaica, Japan, Jersey and Guernsey, Liechtenstein, Mauritius, New Zealand, Norway, Philippines, Republic of Korea, Republics of former Yugoslavia, Switzerland, Turkey and USA.
The Exchange Control Act 1947 ceased to have effect under section 68 of the Finance Act 1987, so there is no general UK exchange control legislation restricting capital movements or profit repatriation. Sanctions, anti-money laundering rules and tax withholding still apply to cross-border payments. Section 68 preserves a Treasury certificate power only for acts done before 13 December 1979.
The abolition is confirmed from the statute; the second half of the statement (no other general exchange control law) is an inference not stated on a current official page.
Banks and other regulated firms must identify and verify a corporate customer, including its name, company number, registered office, directors and senior managers, and understand its ownership and control structure. Money Laundering Regulations 2017 regulation 28. Listed companies on a regulated market are exempt from some of these requirements.
A UK company may only pay dividends and other distributions out of accumulated, realised profits less accumulated, realised losses. Companies Act 2006 s830; further rules apply to public companies and investment companies.
The Central Bank of the UAE maintains a fixed exchange rate of the dirham against the US dollar, committing to buy dirhams against dollars at 3.673 and to sell dirhams for dollars at 3.672 with eligible market counterparties. Federal; applies to the CBUAE's dealings with eligible market counterparties. The page does not state when the peg began.
