Best Gulf Country for Company Formation and Business Setup

For ambitious entrepreneurs, the Gulf region offers a powerful blend of top-tier banking systems and business-friendly laws that streamline company formation and make the process remarkably efficient. 

Countries like Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE) are actively competing to attract the world’s brightest business minds – and it’s working.

The Gulf’s appeal is about more than low taxes and vast oil wealth. It’s now commonplace to see countries like the UAE and Bahrain ranking among the world’s best for ease of doing business, especially when it comes to launching a new venture. 

The transformation didn’t happen by accident. Most Gulf ruling bodies understand that attracting top-tier talent and capital means making it easy for entrepreneurs to start, scale and succeed.

Initiatives like Saudi Arabia’s Regional Headquarters (RHQ) Program, the UAE’s ecosystem of 40+ specialised Free Zones, and Qatar’s post-World Cup infrastructure are all multi-billion-dollar national strategies playing out in real-time.

There’s no one-size-fits-all country that will grant you every benefit. Instead, the best country for your company formation will depend on your goals, priorities and operating model.

With that in mind, this guide breaks down the region’s top contenders, highlighting their advantages and limitations to help you make an informed choice and go where you’re treated best. 

Setting up in the Gulf: Pros and Cons

The Cooperation Council for the Arab States of the Gulf (GCC) region is a gateway to opportunity – but it’s not without its challenges. 

Doing business in the Gulf means navigating a patchwork of local customs, evolving laws and region-specific rules. Get it right, and you can unlock massive potential.

The Gulf’s Strategic Advantages 

• Positioned between East and West, the Gulf offers exceptional market access – not only to wealthy surrounding nations but also to the Middle East, North Africa and South Asia. 
• While the era of near-zero taxes is all but over, the region is tax-competitive, certainly in comparison to the West. 
• Many Gulf countries do not need to raise tax revenues and, as a consequence, have no personal income taxes at all. 
• Gulf governments actively attract foreign investment through reform geared to helping businesses. They offer access to capital with government funds and venture capital networks to fuel expansion. 
• The region’s safety, economic stability and skilled talent pool are also a plus.

The Operational Realities 

• A once simple tax landscape is noticeably more complicated and unpredictable. Value Added Tax (VAT) is now present in several states, requiring solid systems to stay compliant. 
• Corporate tax rules are also changing:
  • The UAE now has a 9% federal corporate tax for most companies
  • Oman charges corporations 15% 
  • Saudi Arabia taxes foreign shareholders’ profit shares at 20%
  • Bahrain charges 0% for now (with some exceptions). 
• Getting to grips with the rules on transfer pricing and economic substance requires expert guidance.
• Aside from taxes, entrepreneurs tend to find that operating costs are high, especially for prime office space and housing in major hubs like Doha or the UAE’s Dubai. 
• Visa rules, sponsorship and growing ‘localisation’ targets (like ‘Saudisation’ or ‘Emiratisation’) can make the hiring process more difficult. 
• While regional access is good, the size of smaller local markets means competition is often fierce. 
• You also need to be ready for strict banking compliance checks that can sometimes feel like a burden.

Comparing Gulf Countries for Business Setup 

To help you choose the ideal Gulf nation for your business, we compare the scale of opportunity and the support and resources available. Here are the main players.

1. United Arab Emirates (UAE) 

For years, the United Arab Emirates, especially Dubai, has built a reputation as the Gulf’s leading business centre, and it mostly deserves that title. 

It’s still the first place many global entrepreneurs think of. So, what’s its secret? 

Firstly, it has amazing infrastructure, which has laid a lot of the groundwork for businesses. 

From driverless metros to smart government services, the UAE’s infrastructure isn’t just modern; it’s futuristic. Dubai especially offers a glimpse of what the business capitals of tomorrow will look like.

Then, there’s a huge range of ways to set up your business in the United Arab Emirates. 

The UAE has specialised free zones, such as DIFC for finance, DMCC for commodity trading, or twofour54 in Abu Dhabi for media. These zones offer incentives like owning 100% of your company, easier sign-up, and often cluster similar businesses together. 

Setting up on the mainland (outside a free zone) is also becoming easier, allowing you to trade directly within the local UAE market.

On top of this, the UAE has the most mature banking sector in the region, with both local and major international names. 

Generally, opening a corporate account is straightforward as long as you have your documentation in order. This includes a commercial license, shareholder passports, residence visas and proof of address.

The lifestyle there is a big plus for expats who like luxury, high-end apartments and retail excellence. 

However, it’s not all plain sailing. A 9% federal corporate tax was introduced in 2023 on profits over AED 375,000 (about US$102,000). Some free zone companies with qualifying income might still get the 0% rate if they meet certain rules. 

Additionally, from January 2025, the UAE introduced a 15% minimum top-up tax for large multinational companies with global revenues exceeding €750 million, which is in line with the Organisation for Economic Co-operation and Development’s (OECD’s) global minimum tax framework. This doesn’t apply to most small-to-medium-sized businesses.

Thankfully, the UAE still has no tax on personal income. 

In terms of things to consider, the cost of business premises and real estate in Dubai can be high.

However, with the UAE’s energy and long-standing business-friendly approach, it remains the primary strategic location for entrepreneurs in the Gulf. 

2. Saudi Arabia (KSA)

If the UAE is the established hub, Saudi Arabia is flexing its economic muscle. 

Forget any outdated notions you might have; KSA is in the midst of a seismic shift driven by its ambitious Vision 2030 plan. For entrepreneurs with the right strategy and grit, the scale of opportunity is enormous.

The Saudis are pouring astronomical sums into diversifying away from oil, creating giga projects like the futuristic city NEOM and luxury tourism destinations along the Red Sea. 

This has created huge opportunities in sectors such as construction, technology, tourism, entertainment, logistics and renewable energy. 

The government, through the Ministry of Investment (MISA), is courting foreign businesses with reforms aimed at an easier setup. It’s even incentivising companies to relocate their Regional Headquarters there to win lucrative government contracts.

It’s also the largest local economy in the Gulf by a margin. 

The standard corporate tax rate is 20% on the profit share attributable to foreign investors. Local partners will handle Zakat, the annual alms tax or poor rate that each Muslim is expected to pay. Meanwhile, VAT sits at 15% – noticeably higher than its neighbours. 

While 100% foreign ownership is now possible, understanding the regulatory landscape and the strong emphasis on ‘Saudization’ (the Nitaqat system requiring businesses to employ Saudi nationals) is absolutely essential for staffing and operations. 

Saudi Arabia also offers tax incentives for international companies that set up their Regional Headquarters in the Kingdom. These can include a 30-year exemption on corporate income tax and withholding tax, which is aimed at attracting long-term investment.

The good news on the personal front is that there’s 0% income tax for employees.

Turning to banking, you’ll find a sector dominated by large, well-established Saudi institutions. 

Opening a business account as a foreign entity has become easier under Vision 2030, particularly if you’ve registered properly through MISA. However, don’t expect that speed of free zone setup elsewhere.

Culturally, while Saudi Arabia is modernising and opening up socially, it remains more conservative than other Gulf countries. 

While perhaps not as expensive as Dubai, business costs are rising, particularly around the major development areas.

Saudi Arabia isn’t as easy as the United Arab Emirates, but for businesses aligned with its transformation goals, the potential is immense. 

3. Qatar 

Think of Qatar, and you probably think of natural gas and the 2022 FIFA World Cup. 

Its immense gas wealth fuels a remarkably high GDP per capita, giving the nation serious spending power and economic stability. The World Cup turbo-charged the development of truly world-class infrastructure.

The tournament’s legacy includes Hamad International Airport (a major hub in its own right), a sleek Doha Metro system, and modern ports and stadiums that are architectural marvels. 

Qatar, like its neighbours, has its own National Vision 2030, aiming to broaden its economy beyond hydrocarbons. This creates opportunities in areas like logistics, technology, tourism, sports management and education.

The Qatar Financial Centre (QFC) is a major draw for businesses in finance, law and consulting. It operates under its own legal framework, based on English common law, and typically levies a competitive 10% corporate tax on locally sourced profits. 

Outside the QFC, the standard corporate tax rate is also generally 10%, though specific activities like oil and gas operations are taxed differently at rates that can go as high as 35%, depending on the nature of operations.

Importantly, Qatar maintains 0% personal income tax. There are also dedicated free zones under the Qatar Free Zones Authority (QFZA), offering 100% foreign ownership and the potential for extended tax holidays.

If you’re setting up within the Qatar Financial Centre, you’ll find specific, often smoother, banking procedures tailored to QFC-licensed firms. 

For businesses outside the QFC, opening an account requires commercial registration, a trade license, shareholder details and a coherent business model.

The domestic market is relatively small compared to Saudi Arabia or even the UAE. The cost of living and operating, particularly in Doha, can also be high. 

Qatar stands out with its wealth, stability and push to diversify beyond gas. If your business aligns with its targeted sectors, like logistics, sports or education, there’s real opportunity backed by world-class infrastructure and serious government support.

Best Gulf Country for Entrepreneurs: FAQs

Go Where You’re Treated Best

The smartest move is always to go where you and your business venture are genuinely treated best.

So, what matters most to you and your business?

Does the allure of 0% corporate taxes within a specific Free Zone resonate with you?

Access to key markets across Asia, Africa and Europe? 

Maybe your critical factor is the ready availability of highly specialised talent vital for your niche?

Or could it be tapping into generous sector-specific incentives designed to boost your particular industry?

Answering these questions (and many more) is crucial to identifying your optimal Gulf location. Careful planning and thorough market research are needed to make these complex choices. 

That’s where we come in. 

If you’re ready to explore the Gulf state that aligns with your business and personal goals, the team at Nomad Capitalist is here to help. We specialise in building tailored offshore strategies that let you go where you’re treated best. Set up a call with us today.