Activities · IT services and software development, SaaS
Set up a IT services and software development, SaaS company in the UAE.
Software development and SaaS in the UAE typically require a professional or service license under activity code 6201001 (computer programming/software design). Free zones offer lower setup costs (from amount not yet confirmed) and simpler processes, ideal for exporting services. Mainland is necessary for government contracts or local client work. VAT is 5% on UAE sales, zero-rated for exports; corporate tax is 9% above amount not yet confirmed, with possible 0% for qualifying free zone persons. Common pitfalls include choosing the wrong activity, ignoring IP assignment, and underestimating bank onboarding.
Professional or service license (typically activity code 6201001 for software development; SaaS may require additional hosting activities like ISIC 6311) kwsme.com pgplaw.com
When you need to bid on government contracts (often require mainland license) mainlandcompare.com, serve local clients directly, or require a physical office (no flexi-desk) businessdubai.ae.
Zones that fit the activity
Names as the researchers wrote them, with the catalogue entry where the zone publishes one. A price is a package price and may cover a different package than another zone.
| Zone | Why | Catalogue entry | Package price | Source |
|---|---|---|---|---|
| IFZA | Low-cost, zero-visa base option up to a few visas. | not published | not published | source |
| Meydan | Fast digital setup, zero-visa base, very low cost. | not published | not published | source |
| DMCC | Prestigious, includes flexi-desk and 1 visa. | not published | not published | source |
| Dubai Internet City | Tech-focused community, up to 5 activities included in standard fee. | Developing, installing, and/or modifying software products | not published | source |
Approvals outside the free zone
VAT is 5% on UAE sales; exports of services to non-GCC clients can be zero-rated if conditions met businessdubai.ae. Corporate tax is 9% on taxable income above amount not yet confirmed; Small Business Relief may apply for revenue up to amount not yet confirmed kwsme.com. Free zone companies may qualify for 0% on qualifying income if QFZP conditions met kwsme.com.
Bank onboarding is thorough; banks scrutinize licence activity and cross-border revenue. Preparation with clear business description, contracts, and verifiable workspace is key. Mainland companies may onboard slightly easier, but file quality matters more businessdubai.ae. Underestimating this process is a common mistake kwsme.com.
Mistakes that cost a resubmission
- Choosing 'software trading' when building own product, leading to wrong licence type kwsme.com. source
- Licensing only one narrow activity; SaaS may need development, hosting, and consultancy kwsme.com. source
- No IP assignment from contractors, a gap investors find kwsme.com. source
- Assuming free zone is 'tax-free'; mainland client revenue and bought-in IP can change tax status kwsme.com. source
- Ignoring data protection until enterprise clients ask kwsme.com. source
- Building a regulated product (payments, health, virtual assets) on a standard licence without regulator approval kwsme.com. source
- Underestimating bank onboarding; prepare clear revenue flow explanation kwsme.com. source
Questions founders ask
Yes, free zones are ideal for exporting services. VAT can be zero-rated for non-GCC clients if conditions are met businessdubai.ae.
No, a professional/service license typically covers SaaS under development and hosting activities (ISIC 6201, 6311) kwsme.com.
Free zone first-year costs start from around amount not yet confirmed (Meydan) to amount not yet confirmed (DMCC), while mainland can be amount not yet confirmed businessdubai.ae.
What the research does not settle
- Exact official fees for IFZA, Meydan, DMCC not available; only agent indicative ranges.
- Specific activity names in free zone catalogues for IFZA, Meydan, DMCC not provided.
- Detailed approval requirements for all software-related activities not exhaustively listed.
- No information on Sharjah or other emirates' costs beyond 'on application' mainlandcompare.com.