FTA Entity Types in UAE – What They Mean and Which One Fits Your Business

When registering your business for Corporate Tax in the UAE, one of the first steps is to select your FTA entity type. This classification tells the Federal Tax Authority (FTA) what kind of business you run and how you should be taxed. Whether you're a freelancer, a multinational company, or a government-related entity, the FTA uses this classification to determine your corporate tax obligations.

Understanding which entity type applies to your business is essential to avoid compliance issues, penalties, or delays in your registration. Let’s walk through everything you need to know about FTA Entity Types in UAE—and how Naqood can make the process easier.

What Are FTA Entity Types in the UAE?

The FTA uses "entity types" to organize businesses based on their legal structure. This helps ensure that each business is taxed fairly and according to UAE law. When you register for corporate tax, you'll be asked to choose your entity type. This isn’t just a formality—it determines how your income is reported, which exemptions you qualify for, and what kind of supporting documents you’ll need.

Whether you’re an individual working alone or managing a large incorporated company, choosing the right classification at the start ensures your tax filings are accurate and accepted without issue.

List of FTA Entity Types in UAE

The FTA recognizes the following official entity types when registering for Corporate Tax:

• Natural Person

• Legal Person – Incorporated

• Legal Person – Foreign Business

• Legal Person – Club or Association

• Legal Person – Charity

• Legal Person – Federal Government Entity

• Legal Person – Emirate Government Entity

• Legal Person – Other

• Partnership

Let’s take a closer look at each one and understand when you should select it.

Deep Dive: FTA Entity Types in UAE

Natural Person

Definition

An individual conducting business in their personal capacity, without forming a separate legal entity.

Common Examples

• Freelancers

• Independent consultants

• Sole traders with freelancer permits

When to Select

Choose this if you operate a licensed business as an individual and have not formed a company or partnership.

Entity Sub-Types

Individual  

A licensed freelancer or sole trader conducting business under their personal name.  

Use this if you hold a trade license and operate independently as a single-person business.

Other Natural Person  

An individual conducting informal or non-standard business activity not classified as a typical sole trader.  

Use this if you are operating under a personal or special-use permit that doesn’t fall under “Individual.”

Legal Person – Incorporated

Definition

A company formally registered and incorporated in the UAE under UAE commercial laws.

Common Examples

• Limited Liability Companies (LLC)

• Free Zone Establishments (FZE)

• Private or Public Joint Stock Companies

When to Select

Select this entity type if your business is legally registered with a UAE licensing authority, whether in a Free Zone or mainland.

Entity Sub-Types

UAE Private Company (Incl an establishment)  

A limited liability or private business licensed in the UAE, including Free Zone companies and sole establishments.  

Use this if you own or manage a UAE-licensed company that is not publicly traded.

Public Joint Stock Company  

A company whose shares are traded publicly on a stock exchange.  

Use this if your company is listed and operates under PJSC status.

Foundation  

A legal structure typically used for wealth management, estate planning, or non-profit goals.  

Use this if your entity is set up as a UAE-recognized foundation.

Trust  

A legal entity that holds assets on behalf of beneficiaries, often for investment or estate planning.  

Use this if your entity is a registered trust operating under UAE law.

Legal Person – Foreign Business

Definition

A business that is incorporated outside the UAE but operates or generates income inside the UAE.

Common Examples

- Branches of multinational companies

- Representative offices of foreign entities

When to Select

Use this type if your company is legally based abroad and operates within the UAE market through a registered presence.

Entity Sub-Types

Foreign Business with UAE trade license / permit  

A foreign company that operates legally in the UAE with a local branch license or trade permit.  

Use this if your foreign company has a registered entity or branch within the UAE.

Foreign Business without UAE trade license / permit  

A foreign company earning UAE-sourced income without any physical registration in the country.  

Use this if your foreign entity operates remotely but still earns revenue from the UAE.

Legal Person – Club, association or society

Definition

A non-commercial, member-based organization formed for recreational, professional, or community purposes.

Common Examples

• Sports clubs

• Cultural associations

• Professional membership organizations

When to Select

Choose this if your organization is non-profit and operates as a registered club, association or society.

Entity Sub-Types

Club  

A group focused on recreational or sports activities for its members.  

Use this if your organization is a licensed sports or social club.

Association  

A professional or interest-based group serving a defined membership.  

Use this if your organization is focused on professional development, networking, or advocacy.

Society  

A structured organization usually supporting cultural, educational, or charitable goals.  

Use this if your group is recognized as a society by a UAE authority.

Legal Person – Charity

Definition

An organization officially registered to carry out charitable or philanthropic activities in the UAE.

Common Examples

• Registered humanitarian foundations

• Religious charities

• Non-profit aid organizations

When to Select

Select this type only if your organization is licensed by UAE authorities as a charity.

Entity Sub-Types  

None currently defined by the FTA.

Legal Person – Federal Government Entity

Definition

A public sector entity that is part of the UAE Federal Government.

Common Examples

• UAE ministries

• Federal departments or authorities

When to Select

Use this only if your organization operates under the federal government structure.

Entity Sub-Types  

None currently defined by the FTA.

Legal Person – Emirate Government Entity

Definition

A government-related entity that operates at the emirate (local) level.

Common Examples

• Dubai Municipality

• Abu Dhabi Department of Economic Development

• Sharjah Investment Authority

When to Select

Select this if your entity is affiliated with a specific emirate’s local government body.

Entity Sub-Types  

None currently defined by the FTA.

Legal Person – Other

Definition

A general category for legal entities that don’t fit clearly under any of the defined types.

Common Examples

• International organizations with a special structure

• Semi-government or hybrid entities

When to Select

If your business doesn’t fit the other categories but is a recognized legal entity, this may apply. It’s best to consult an expert before selecting this.

Entity Sub-Types  

None currently defined by the FTA.

Partnership

Definition

A business formed by two or more individuals or entities operating together, without incorporating as a separate legal company.

Common Examples

• Professional civil partnerships (law firms, accounting firms)

• Unincorporated business alliances

When to Select

Choose this if your business is based on a formal partnership agreement without a separate corporate license.

Entity Sub-Types

Domestic Incorporated Partnership  

A partnership formally registered and incorporated within the UAE.  

Use this if your partnership is UAE-based and has legal incorporation.

Foreign Incorporated Partnership  

A partnership legally formed outside the UAE.  

Use this if your partnership is registered abroad but doing business in the UAE.

Unincorporated Partnership  

A collaboration between individuals/entities without formal registration.  

Use this if you’re operating as partners without setting up a separate legal entity.

How to Choose the Right FTA Entity Type for Your Business

Your selection depends on your business license, structure, and registration. If you're a freelancer with a personal permit, you're a Natural Person. If you're running an LLC or a Free Zone company, you're a Legal Person – Incorporated. If you operate as a branch of an international company, you're a Foreign Business.

Mistaking your entity type can lead to rejected filings or inaccurate tax calculations. That’s why understanding your classification is critical during corporate tax registration.

How Naqood Helps You Stay FTA Compliant in Minutes

Naqood is designed for businesses that want to simplify accounting and compliance. Whether you're a startup, freelancer, or Free Zone company, Naqood helps you register for Corporate Tax, issue tax invoices, and manage your books—all in one platform.

The system guides you through registration, matches your license with the correct FTA entity type, and makes sure you're always tax-compliant—without the need for an external accountant.

Do You Still Need an Accountant?

For most businesses, Naqood is all you need. However, if you’re unsure about your structure or if your company is complex, it’s wise to consult a FTA-approved accountant. This is especially true if you think your entity may fall under “Legal Person – Other” or involves cross-border operations.

You can see a list of trusted, FTA-approved advisors here:

FTA Approved Accountants

FAQ about FTA Entity Types in UAE

Can a freelancer register as a Natural Person?

Yes, if you have a valid license and operate independently without a company, you're considered a Natural Person.

Can a Free Zone company register as Legal Person – Incorporated?

Yes. Whether you’re in the mainland or Free Zone, incorporated businesses fall under this category.

What if I select the wrong entity type?

You may face delays in your tax registration or even non-compliance penalties. Always double-check your selection or speak with an expert.

Do I need to update my entity type if my business changes?

Yes. If your structure changes (e.g., from partnership to LLC), you must update your details with the FTA.

If you're not sure which entity type applies to you, always consult with an expert. For a list of FTA-approved accountants, visit FTA Approved Accountants