Saudi Arabia or United Arab Emirates: where should your business be based?
The United Arab Emirates ranks higher in the index, 01 against =07. Which suits you depends on where the owners live, what the company is for and how it will be run.
Pillar by pillar
Doing business, side by side
Tax
Income tax of 20% applies to profit attributable to non-Saudi, non-GCC shareholders, and 2.5% zakat applies to the Saudi and GCC share. VAT is 15%. Qualifying regional headquarters activities pay 0% income tax and withholding tax for up to 30 years.
Profits up to AED 375,000 are taxed at 0%. In a free zone the 0% rate reaches qualifying income only, and VAT is charged at 5%.
Set-up
A foreign investor registers with MISA, which aims to complete investment registration within 10 working days, and then obtains a Commercial Registration from the Ministry of Commerce. Since April 2025 a Commercial Registration no longer expires but the company must update and verify its data every year.
Set-up typically costs AED 10,000 to 50,000 in total, depending on mainland or free zone, the activity and any licences. Capital must be fully paid at incorporation.
On the ground
A company needs a Saudi address and, once it employs staff, must keep a set share of Saudi nationals under the Nitaqat system run by the Ministry of Human Resources. A licensed regional headquarters must hire at least 15 full time staff within its first year, 3 of them at executive level.
A mainland company needs no resident director or secretary, but it must appoint an auditor. Free zone requirements vary from one zone to another.
Ownership
Since 3 April 2025 every company files its beneficial owners, anyone holding 25% or more, with the Ministry of Commerce and reports changes within 15 days. The register is not open to the public, and fines reach SAR 500,000.
The beneficial ownership register is open to the authorities only. Each company must name a UAE-resident individual as the contact for its register.
Residence
Premium Residency offers Special Talent, Gifted, Investor, Entrepreneur and Real Estate Owner routes, plus a Limited Duration residency at SAR 100,000 a year and an Unlimited Duration residency for a one time SAR 800,000. The Investor route asks for SAR 7 million invested and 10 jobs.
An investor or partner can hold a five-year green residence visa on the trade licence. A ten-year golden visa needs capital or a partner's share of AED 2 million.
Living and working
Currency
Saudi riyal (SAR), pegged at 3.75 to the US dollar.
UAE dirham, pegged to the US dollar.
Time zone
UTC+3 all year, with no daylight saving.
UTC+4.
Personal tax
There is no income tax on employment income. Non-Saudis who run a business in their own name pay income tax on its profit, and non-Saudi employees' employers pay 2% social insurance on wages.
The UAE does not levy income tax on individuals.
Flights
King Khalid International Airport connected Riyadh to 113 domestic and international destinations in 2024 and handled more than 37 million passengers.
Dubai International served 217 destinations in 99 countries at the end of H1 2026; London is 6 hrs 50 mins by British Airways.
Language
Arabic is the official language; English is allowed in some Dubai Courts circuits, and the DIFC Courts sit in English.
Saudi Arabia vs United Arab Emirates: common questions
Saudi Arabia: Income tax of 20% applies to profit attributable to non-Saudi, non-GCC shareholders, and 2.5% zakat applies to the Saudi and GCC share. VAT is 15%. Qualifying regional headquarters activities pay 0% income tax and withholding tax for up to 30 years. The United Arab Emirates: Profits up to AED 375,000 are taxed at 0%. In a free zone the 0% rate reaches qualifying income only, and VAT is charged at 5%.
Saudi Arabia: A foreign investor registers with MISA, which aims to complete investment registration within 10 working days, and then obtains a Commercial Registration from the Ministry of Commerce. Since April 2025 a Commercial Registration no longer expires but the company must update and verify its data every year. The United Arab Emirates: Set-up typically costs AED 10,000 to 50,000 in total, depending on mainland or free zone, the activity and any licences. Capital must be fully paid at incorporation.
Saudi Arabia: A company needs a Saudi address and, once it employs staff, must keep a set share of Saudi nationals under the Nitaqat system run by the Ministry of Human Resources. A licensed regional headquarters must hire at least 15 full time staff within its first year, 3 of them at executive level. The United Arab Emirates: A mainland company needs no resident director or secretary, but it must appoint an auditor. Free zone requirements vary from one zone to another.
Saudi Arabia: Since 3 April 2025 every company files its beneficial owners, anyone holding 25% or more, with the Ministry of Commerce and reports changes within 15 days. The register is not open to the public, and fines reach SAR 500,000. The United Arab Emirates: The beneficial ownership register is open to the authorities only. Each company must name a UAE-resident individual as the contact for its register.
Saudi Arabia: Premium Residency offers Special Talent, Gifted, Investor, Entrepreneur and Real Estate Owner routes, plus a Limited Duration residency at SAR 100,000 a year and an Unlimited Duration residency for a one time SAR 800,000. The Investor route asks for SAR 7 million invested and 10 jobs. The United Arab Emirates: An investor or partner can hold a five-year green residence visa on the trade licence. A ten-year golden visa needs capital or a partner's share of AED 2 million.
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