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Setting Up a Company in Dubai: Mainland, Freezone, and Tax Structure Explained
Inquiries about setting up a company in Dubai have increased noticeably in 2026. The ability for foreigners to hold 100% ownership, a relatively streamlined incorporation process, and a wide range of Free Zone options have made Dubai a particularly attractive destination for businesses in IT, fintech, and digital assets. Mainland, Freezone, Offshore — What Is the Difference? Dubai company structures fall into three main categories. A Mainland company is essentially a standard operating entity that can trade directly in the local UAE market. A Free Zone company offers 100% foreign ownership, packaged licensing options, and bundled office and visa arrangements — making it the most popular choice among Korean businesses. An Offshore company is generally used for holding structures, investment vehicles, or asset management purposes rather than local operations, and is typically only considered when the purpose is clearly defined. Type Key Features Best For Mainland Direct access to UAE local market; local sponsor may be required depending on industry Local retail, F&B, service businesses Freezone 100% foreign ownership, tax benefits, straightforward visa processing IT, trading, consulting — most popular among Korean companies Offshore No local operations permitted; used for holding and asset management Holding companies, investment vehicles, asset management The 9% Corporate Tax Era — Are Free Zones Still Tax-Efficient? The old assumption that Dubai means zero corporate tax no longer tells the full story. The UAE has introduced a federal corporate tax of 9%, which applies in principle to all Dubai-registered companies. However, Free Zone entities that meet certain conditions may still qualify for a 0% tax rate on specific categories of income. The key point is that Free Zone status does not automatically guarantee a 0% rate. The outcome depends on which Free Zone is selected, where the revenue is generated and from which clients, and where the actual staff and office are located. This is why tax structuring should be part of the incorporation process from the outset, not an afterthought. What to Check Before Choosing a Free Zone Selecting a Free Zone based solely on cost can create serious complications down the line — particularly when it comes to license renewals and opening a corporate bank account. Industry fit: For crypto and Web3 businesses, a Free Zone with a well-developed regulatory sandbox (such as those aligned with VARA) is essential. Operational substance: Consider the office requirements, the number of visas needed, and how demanding ongoing compliance will be in practice. Scalability: Whether the business is service-based or trade-focused will determine which type of license is appropriate — and the right answer varies significantly between the two. Why Crypto and Web3 Projects Choose Dubai Establishing a Dubai entity goes beyond simply setting up an overseas company. It is closer to building a global base of operations — a hub through which to engage international partners, exchanges, and investors. In practice, a common structure involves a Korean entity handling development and operations, while the Dubai entity serves as the contracting and relationship hub for global counterparties. How the token issuance vehicle is structured will significantly affect the regulatory, tax, and governance picture, making early-stage design essential. Decent Law Firm's International Practice Team Decent Law Firm's international practice team provides integrated structural design that accounts for international tax, foreign exchange regulations, and digital asset compliance — drawing on hands-on experience with Dubai Free Zones, local banks, and regulatory authorities. This is not a filing service. We work with clients to design a structure across Korea, the UAE, and other jurisdictions that minimizes risk and maximizes utility. If you are considering a Dubai entity — even at the early idea stage — please reach out, and we will map out the options that fit your situation.
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China’s Export Controls on Japan, Three Critical Risks Korean Companies Must Address
At the beginning of 2026, a major shift in the global supply chain landscape has emerged. On January 6, 2026, the Chinese government announced sweeping export control measures targeting Japan, citing national security and national interest concerns. This development is not merely a bilateral issue between China and Japan. For Korean companies operating subsidiaries in China or sourcing key Chinese materials for transactions involving Japan, the impact is direct and potentially severe. Proactive legal and compliance preparation is now essential. China’s 2026 Export Control Announcement No. 1 Targeted Export Restrictions Against Japan On January 6, 2026, China’s Ministry of Commerce and the General Administration of Customs jointly issued “Announcement No. 1 of 2026,” imposing comprehensive export controls on Japan. This marks the first instance in which China has explicitly targeted a specific country through export control measures, signaling a structural shift in China’s trade and security policy. Key Measures Comprehensive ban on military-related exports All exports of dual-use items to Japanese military end users (MEU) or for military purposes are prohibited. Broad scope of controlled items Including rare earth elements, gallium, germanium, graphite, semiconductor manufacturing equipment, high-performance sensors, and drones. Catch-all controls Even non-listed items may be restricted if they are deemed capable of military end use. Prohibition of indirect or circumvention exports Supplies routed through third countries, including Korea, to Japan are subject to enforcement. Three Key Risks for Korean Companies China’s export controls extend beyond China–Japan trade and directly affect Korean businesses embedded in China-centered supply chains. 1. Export Restrictions on China-Based Korean Subsidiaries Korean companies manufacturing in China may face significant barriers or outright denial of export licenses when shipping products or components to Japan. If the Japanese counterparty is linked—directly or indirectly—to the defense sector, companies may encounter contractual non-performance risks and potential legal disputes. 2. Heightened End-User and End-Use Certification (EUC) Requirements Even where Japanese customers are civilian entities, Chinese authorities are likely to require strict and detailed proof that the goods will not be diverted to military use. This may result in: Prolonged licensing reviews Requests for supplementary documentation License denials All of which can disrupt delivery schedules and commercial relationships. 3. Sanctions and Blacklist Risks from Indirect Exports This is the most critical risk area. Where Korean companies import Chinese-origin materials, process them, and re-export finished products to Japan, Chinese authorities may view the transaction as an attempt to circumvent export controls. Such a determination could expose companies to: Regulatory investigations Inclusion on control or blacklist regimes Long-term restrictions on operations involving China Practical Compliance Checklist for Corporate Decision-Makers China’s export control regime should now be treated as a permanent compliance issue, not a temporary disruption. Korean companies should prioritize the following reviews: Classification of products based on HS codes, CAS numbers, and technical specifications Systematic management of end-user and end-use documentation Advance legal review of licensing requirements and regulatory exposure Review of force majeure and liability clauses in international contracts Export Controls Require Structural Legal Planning Decent Law Firm’s International Practice Team provides tailored legal solutions based on extensive experience in cross-border regulatory compliance. Our advisory services include: Export control and sanctions risk assessments Structuring of re-export and third-country transaction models Legal support for overseas investments and China-based subsidiaries International contract risk management and dispute resolution As China’s export control regime continues to reshape global supply chains, early legal assessment and well-structured transactions are critical to maintaining business continuity and regulatory certainty. Decent Law Firm stands ready to support your export control and international compliance strategy.
