Computer System (Software Design).
Computer System (Software Design) is one of the ten most-licensed activities at IFZA. This page covers what the licence permits, the QFZP / Corporate Tax position, VAT treatment, indicative cost in USD, and the home countries from which the most applications for this activity originate.
At a glance
| Feature | Position |
|---|---|
| IFZA activity classification | 6201.01 — Computer programming activities (custom software) |
| Year-1 all-in cost (USD) | USD 10,120 |
| Time to licence issuance | 5–7 business days |
| Visa quota (standard) | Up to 9 investor/employee visas under flexi-desk package |
| QFZP 0% qualifying status | Qualifying for QFZP 0% on income from non-UAE-mainland clients; IP-development carve-out may apply under the modified-nexus rules for high-value IP held in UAE |
| UAE VAT (5%) | 5% on UAE-resident client invoices; zero-rated for export of services and software |
| UAE Corporate Tax | 9% above AED 375,000 profit; 0% under QFZP if conditions met |
| Audit requirement | Not required for non-regulated activity; recommended for QFZP claims |
What this licence covers
The IFZA Computer System (Software Design) activity authorises the design, development and sale of proprietary software products. It is the right activity for SaaS founders building product (vs IT consultants providing services), software-house operators selling licensed software products, and product-engineering teams developing proprietary IP for license or eventual sale. The activity also covers custom software-development work for clients, but the "selling proprietary product" use case is its primary fit.
Distinguished from: IT Consultancy — which is advisory / implementation services; Computer System Maintenance — separate activity covering ongoing support and maintenance; Marketing Services via Social Media — separate activity for social-media-marketing operations.
QFZP, Corporate Tax and IP considerations
Software Design qualifies for QFZP 0% on revenue from non-UAE-mainland clients. The additional consideration for software-product businesses is the treatment of IP: under Cabinet Decision 100 of 2023, "Ownership or exploitation of intellectual property assets" is generally NOT a Qualifying Activity unless the IP derives from R&D actually conducted by the QFZP (the "modified-nexus" carve-out). This means proprietary-software revenue from IP developed by the IFZA entity's own UAE-based engineering team can qualify; revenue from IP acquired from a third party or developed offshore typically does not.
Practical implication for SaaS founders: where the engineering team is genuinely UAE-based (employed under the IFZA entity, working from UAE premises), the modified-nexus condition is satisfied and software revenue qualifies. Where the IP was developed in the UK / India / elsewhere before the UAE move, structuring around the original IP ownership matters. The Cayman Foundation + BVI Issuer architecture used for token launches is also relevant for SaaS founders managing IP-holding structures — see our flagship token-structure guide for the analogous IP-holding analysis.
Banking and operational notes
Software-design entities are well-received across UAE banking. Wio Business / Mashreq Neo Biz within 5-10 days; Tier 1 banks within 3-6 weeks. Stripe accepts IFZA-VAT-registered software businesses; this is critical for SaaS subscription billing. Wise Business / Revolut Business / Airwallex serve as multi-currency rails for international subscription revenue.
Common SaaS founder pattern
- Founder relocates to UAE via the IFZA investor visa; obtains UAE Tax Residency Certificate after 183 days.
- IFZA Software Design entity hires UAE-based engineers (or relocates existing team). Engineering work performed from UAE; IP developed at the IFZA entity level.
- Subscription billing via Stripe (or competitor) at IFZA entity level. VAT registered above the threshold; zero-rated for non-UAE subscribers, 5% for UAE subscribers.
- QFZP 0% on qualifying income (international subscribers); 9% on the small UAE-mainland portion if it exceeds de minimis.
- Optional offshore IP-holding layer for future-state investor-readiness — Cayman Foundation or BVI BC parent for IP licensing, with arm's-length royalty back to the IFZA operating entity.
When this licence is not the right answer
- Pure IT consulting / advisory — use IT Consultancy activity.
- Hardware / IoT product sales. Trading activity needed in addition.
- Licensed financial-services software (regtech, payments). May require DIFC DFSA or ADGM FSRA authorisation for the underlying regulated activity.
- Web3 / token-issuance product. Need to layer with Cayman Foundation + BVI Issuer architecture for the token side; IFZA Software Design covers the protocol-development side.
Indicative year-1 cost in USD
| Component | Year 1 | Year 2+ |
|---|---|---|
| IFZA government licence fee (this activity bundle, up to 3 activities) | USD 4,200 | USD 4,200 |
| Establishment card & immigration file | USD 800 | USD 400 |
| Investor visa (1 visa) | USD 1,300 | USD 400 (renewal) |
| Emirates ID + medical + biometrics | USD 320 | USD 120 |
| ArxSetup professional fee + KYC + bank introduction | USD 3,500 | USD 2,000 |
| All-in total | USD 10,120 | USD 7,120 |
Add-ons: VAT registration (USD 950), Corporate Tax registration (USD 550), additional visas (USD 1,300 each), bespoke shareholders' agreement (from USD 3,500), trademark registration (from USD 5,500).
Top countries applying for this activity
Applications for this activity most commonly originate from the following countries (drawn from IFZA application data and our own client mix):
Common questions
Does my UAE-based SaaS product qualify for QFZP 0%?
Yes, provided: (1) the engineering team is UAE-based and the IP is developed within the IFZA entity (modified-nexus condition); (2) subscription revenue is from non-UAE-mainland subscribers (qualifying activity); (3) UAE substance, audited financials, de minimis on UAE-mainland revenue. For an internationally-focused SaaS with UAE engineering team, all four conditions are typically met.
What about IP I developed in my home country before moving?
IP developed before the UAE move is generally treated as not qualifying for modified-nexus purposes. Common mitigations: (a) restructure the original IP ownership pre-move (assign to a Cayman Foundation or BVI BC) so the IFZA entity licenses-in rather than owns the legacy IP; (b) continue ongoing development within the IFZA entity so post-move IP is qualifying. Both have tax and structuring trade-offs; we model at engagement.
Can I sell my software product to UAE customers without breaking QFZP?
Yes, up to the de minimis threshold (5% of total revenue OR AED 5m). Below the threshold, qualifying income (international subscribers) remains at 0% and non-qualifying income (UAE subscribers) is taxed at 9%. Above the threshold, the entire entity loses QFZP for that tax year. Monitor monthly.
How do I handle VAT on a SaaS subscription product?
Standard place-of-supply rules. Subscriptions to UAE-resident customers (whether B2B or B2C) are taxable at 5%. Subscriptions to non-UAE-resident customers are zero-rated (export of services). Stripe / billing platform should be configured to charge VAT only on the UAE subscriber base; quarterly VAT returns capture both.
Software Design vs IT Consultancy — which do I need?
Software Design if you build proprietary software for sale (SaaS product, downloadable software, software-licensing business). IT Consultancy if you provide advisory / implementation services on third-party technology. Most SaaS founders pick Software Design; most freelance technology consultants pick IT Consultancy. Both can be bundled within the same 3-activity IFZA package if you do both.