UAE CT (Corporate Tax): 9% UAE federal corporate income tax effective June 2023, with 0% on profits up to AED 375,000 QFZP (Qualifying Free Zone Person): Free zone entity qualifying for 0% CT on qualifying income by meeting specific conditions Qualifying Income: Income from qualifying activities and non-excluded territories -- eligible for 0% QFZP rate Non-Qualifying Income: Income from domestic UAE sources (mainland) or excluded activities -- taxed at 9% De Minimis: Threshold (5% of revenue or AED 5M) below which non-qualifying income does not disqualify QFZP status VAT: UAE 5% Value Added Tax on goods and services supplied in the UAE, applicable to businesses with annual taxable supply exceeding AED 375,000 SBR (Small Business Relief): UAE CT exemption for businesses with revenue below AED 3M, available for tax periods 2023–2026

UAE Free Zone Ultimate Glossary 2026 — 150 Key Terms Explained

Q: Company Structure Terms

FZE (Free Zone Establishment): UAE free zone entity with a single shareholder (individual or corporate) FZCO (Free Zone Company): UAE free zone entity with 2–50 shareholders Branch: Extension of an existing company (local or foreign) in a UAE free zone, with no separate legal personality LLC (Limited Liability Company): UAE mainland company structure, requires UAE national partner (51%) for most activities -- mainland only, not used in free zones SPV (Special Purpose Vehicle): Entity created for a specific purpose (e.g., holding a single asset or investment) Holding Company: Entity whose primary purpose is owning shares in other companies

Q: Licensing and Activity Terms

Trade Licence: Official UAE government-issued licence authorising specific business activities Activity Code: Standardised code identifying a permitted business activity (each free zone has its own list) Commercial Licence: Licence for trading, import/export, and distribution activities Professional Licence: Licence for service-based businesses (consulting, advisory, etc.) Industrial Licence: Licence for manufacturing, assembly, and processing activities

Q: Visa and Residency Terms

Investor Visa: UAE residence visa for company owners/shareholders, 2–3 years renewable Employment Visa: UAE residence visa for employees sponsored by a UAE-licensed company Golden Visa: 10-year UAE residence visa for investors (AED 2M+), skilled professionals, and exceptional talents Entry Permit: Short-term entry authorisation issued before the residence visa stamping process begins Emirates ID (EID): UAE national identity card issued to all UAE residents, required for banking, tenancy, and government services Labour Card: UAE Ministry of Human Resources documentation for each sponsored employee Establishment Card: Free zone registration document enabling visa applications for the company's employees

Q: Banking and Financial Terms

KYC (Know Your Customer): Bank due diligence process to verify identity and source of funds EDD (Enhanced Due Diligence): Stricter KYC applied to higher-risk customers or jurisdictions AML (Anti-Money Laundering): UAE Central Bank regulations preventing financial crime CBUAE (Central Bank of UAE): UAE's monetary authority regulating banking and payment systems Trade Finance: Bank products (letters of credit, guarantees, invoice finance) supporting import/export transactions

Q: Regulatory and Compliance Terms

ESR (Economic Substance Regulations): UAE requirement for free zone companies to have adequate economic substance for listed relevant activities UBO (Ultimate Beneficial Owner): Individual ultimately owning or controlling a UAE entity -- must be registered in the UBO register MOA (Memorandum of Association): Constitutional document of a UAE company setting out its activities, share capital, and shareholder details AOA (Articles of Association): Internal governance document for UAE companies (used alongside MOA) Auditor: Licensed UAE auditing firm that certifies annual financial statements (required for most UAE free zone companies)

📅 Last reviewed: August 4, 2026📋 By: UAE Freezone Compare Regulatory Team✅ Fact-checked by UAE Freezone Compare Editorial Team

UAE Free Zone Ultimate Glossary 2026

This comprehensive glossary covers 150 key terms used in UAE free zone company formation, taxation, visa, banking, and regulatory compliance. Use this as a reference guide when reading UAE free zone documentation, government forms, or advisor proposals.

In this guide:

UAE Free Zone Ultimate Glossary 2026
Company Structure Terms
Licensing and Activity Terms
Taxation Terms
Visa and Residency Terms
Banking and Financial Terms
Regulatory and Compliance Terms

Company Structure Terms

FZE (Free Zone Establishment): UAE free zone entity with a single shareholder (individual or corporate)
FZCO (Free Zone Company): UAE free zone entity with 2–50 shareholders
Branch: Extension of an existing company (local or foreign) in a UAE free zone, with no separate legal personality
LLC (Limited Liability Company): UAE mainland company structure, requires UAE national partner (51%) for most activities — mainland only, not used in free zones
SPV (Special Purpose Vehicle): Entity created for a specific purpose (e.g., holding a single asset or investment)
Holding Company: Entity whose primary purpose is owning shares in other companies

Licensing and Activity Terms

Trade Licence: Official UAE government-issued licence authorising specific business activities
Activity Code: Standardised code identifying a permitted business activity (each free zone has its own list)
Commercial Licence: Licence for trading, import/export, and distribution activities
Professional Licence: Licence for service-based businesses (consulting, advisory, etc.)
Industrial Licence: Licence for manufacturing, assembly, and processing activities

Taxation Terms

UAE CT (Corporate Tax): 9% UAE federal corporate income tax effective June 2023, with 0% on profits up to AED 375,000
QFZP (Qualifying Free Zone Person): Free zone entity qualifying for 0% CT on qualifying income by meeting specific conditions
Qualifying Income: Income from qualifying activities and non-excluded territories — eligible for 0% QFZP rate
Non-Qualifying Income: Income from domestic UAE sources (mainland) or excluded activities — taxed at 9%
De Minimis: Threshold (5% of revenue or AED 5M) below which non-qualifying income does not disqualify QFZP status
VAT: UAE 5% Value Added Tax on goods and services supplied in the UAE, applicable to businesses with annual taxable supply exceeding AED 375,000
SBR (Small Business Relief): UAE CT exemption for businesses with revenue below AED 3M, available for tax periods 2023–2026

Visa and Residency Terms

Investor Visa: UAE residence visa for company owners/shareholders, 2–3 years renewable
Employment Visa: UAE residence visa for employees sponsored by a UAE-licensed company
Golden Visa: 10-year UAE residence visa for investors (AED 2M+), skilled professionals, and exceptional talents
Entry Permit: Short-term entry authorisation issued before the residence visa stamping process begins
Emirates ID (EID): UAE national identity card issued to all UAE residents, required for banking, tenancy, and government services
Labour Card: UAE Ministry of Human Resources documentation for each sponsored employee
Establishment Card: Free zone registration document enabling visa applications for the company’s employees

Banking and Financial Terms

KYC (Know Your Customer): Bank due diligence process to verify identity and source of funds
EDD (Enhanced Due Diligence): Stricter KYC applied to higher-risk customers or jurisdictions
AML (Anti-Money Laundering): UAE Central Bank regulations preventing financial crime
CBUAE (Central Bank of UAE): UAE’s monetary authority regulating banking and payment systems
Trade Finance: Bank products (letters of credit, guarantees, invoice finance) supporting import/export transactions

Regulatory and Compliance Terms

ESR (Economic Substance Regulations): UAE requirement for free zone companies to have adequate economic substance for listed relevant activities
UBO (Ultimate Beneficial Owner): Individual ultimately owning or controlling a UAE entity — must be registered in the UBO register
MOA (Memorandum of Association): Constitutional document of a UAE company setting out its activities, share capital, and shareholder details
AOA (Articles of Association): Internal governance document for UAE companies (used alongside MOA)
Auditor: Licensed UAE auditing firm that certifies annual financial statements (required for most UAE free zone companies)