The UAE Dirham (AED — Arab Emirates Dirham) is the official currency of the UAE, pegged to the USD at a fixed rate. Here is a business guide to the UAE Dirham in 2025.
AED: Key Facts
Currency code: AED. Exchange rate: fixed peg of 3.6725 AED = 1 USD (since 1978). This peg has not been changed in over 45 years and is highly unlikely to change. The peg means: AED-USD exchange rate risk is essentially zero, AED is one of the most stable currencies in the world, UAE interest rates closely track US Federal Reserve rate decisions (the CBUAE adjusts UAE rates in response to Fed rate changes). Notes: AED 5, 10, 20, 50, 100, 200, 500, 1,000. Coins: AED 1, AED 0.50, AED 0.25, AED 0.05, AED 0.01 (fils).
AED in Business
For UAE businesses: AED is the functional currency for all UAE-based transactions (rent, salaries, government fees, utility bills). Invoicing clients: you can invoice in AED, USD, EUR, or any other currency — but if the invoice is in a foreign currency, VAT (if applicable) must be calculated and reported in AED using the CBUAE exchange rate on the transaction date. Employee salaries: paid in AED (WPS system processes AED only). Foreign suppliers: typically invoiced and paid in USD (the most common UAE business currency after AED).
AED and Corporate Tax
All UAE Corporate Tax calculations are in AED. If your company has transactions in foreign currencies: convert to AED using the CBUAE official rate on the transaction date, maintain AED-denominated accounting records (even if your business currency is USD or EUR), and your CT return is filed and paid in AED.