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How to Start a Business in Dubai or UAE?

Dubai is a thriving hub for business and entrepreneurship, with a strategic location and a vibrant economy. It offers not one but two options for setting up your business: Mainland and Freezone. 

The Mainland is perfect for those who want to establish a physical presence and tap into the local market. At the same time, Freezone is ideal for those who seek more flexibility and control over their business with 100% ownership. 

The cost can vary depending on several factors, such as the type of business, the location, and the legal structure. However, you should expect to pay around AED 15,000 to AED 25,000 for a Mainland setup, while a Freezone setup can range from AED 15,000 to AED 50,000.

These are just rough estimates; the actual cost can be higher or lower depending on your circumstances. 

It’s worth noting that the process of setting up a business in Dubai can be complex and time-consuming, especially if you’re not familiar with the local laws and regulations. That’s why seeking professional guidance and support from a reliable business setup company is always a good idea.

How to Start a Business in Dubai or UAE - Step-by-Step Guide for Beginners

Setting up a business in Dubai can be a great opportunity, but it requires careful planning, research, and preparation.

As a business owner, you can open a company in Dubai by following the steps given below or you can consider taking professional guidance and support from a reliable business setup company.

  1. Step 1 - Start with choosing your business activity
  2. Step 2 - Determine Your Company’s Legal Structure
  3. Step 3 - Select a Favorable Location in UAE
  4. Step 4 - Decide a Business Name & Trademark
  5. Step 5 - Initiate the Process of Business Approval
  6. Step 6 - Choose an Office Space
  7. Step 7 - Open a Corporate Bank Account
  8. Step 8 - Choose an Office Location to Begin Business Activity In Dubai

Step 1 - Start with choosing your business activity

Choosing your business activity will help you identify what kind of license you need to apply for. Dubai has different types of licenses for different business activities, so it’s important to know which one you need to avoid any delays or complications in the setup process.

On the other hand, it will help you determine what kind of legal structure is best for your business. Depending on the nature of your business, you may need to register as a sole proprietorship, partnership, or even a corporation.

It’s important to know that Mainland and Freezone offer a wide range of business activities.

In the Mainland, you can conduct almost any kind of business activity as long as you comply with the legal requirements and regulations set by the Dubai Department of Economic Development. 

This includes activities such as retail, trading, consulting, and manufacturing, among others. You can learn more about the list of business activities in the Mainland by visiting the official website

In Freezone, the range of business activities is a bit more specific and focused on industries such as media, technology, logistics, and healthcare. 

However, Freezone offers more relaxed regulations and allows for 100% foreign ownership, making it an attractive option for entrepreneurs looking to start a business without a local partner or sponsor.

The list of business activities varies from free zone to free zone. Find out more about these activities below:

Step 3 - Select a Favorable Location in UAE

When it comes to setting up a business in Dubai, there are some key differences between Mainland and Freezone that you should be aware of.

Firstly, in Mainland, you will need to have a local sponsor or partner who will hold 51% of the shares in your company. This is a legal requirement, meaning you must share some control over your business with your local partner. 

However, this arrangement can be beneficial in terms of navigating local regulations and gaining access to the local market.

In contrast, Freezone allows for 100% foreign ownership, meaning you can fully control your business without needing a local partner or sponsor. 

This can be a major advantage for entrepreneurs who want more flexibility and control over their businesses.

UAE offers many advantages to business owners, including a zero-tax framework and streamlined processes for starting a business. 

We have covered a detailed guide for choosing between Mainland and Freezone depending on your business requirements.

Step 4 - Decide a Business Name & Trademark

Choosing a business name and registering a trademark is crucial in setting up a business in Dubai. Your business name is not only the first thing people will see and remember about your company but also an important legal identifier. 

Before choosing a name, you should conduct thorough research to ensure that it is available and not already registered by someone else.

Choosing a compelling business name, logo, and slogan that conveys your mission, vision, and niche is crucial for your brand’s identity. 

You can search for some ideas using online tools to help you generate a business name and verify the same at the MOE website to check its availability.

Step 5 - Initiate the Process of Business Approval

The process of setting up a business in Dubai can be complex and time-consuming, especially if you’re not familiar with the local laws and regulations. That’s why seeking professional guidance and support from a reliable business setup company is always a good idea.

When starting a business in Dubai, you must fulfill certain legal obligations as per the UAE’s legal framework. These include obtaining and submitting the necessary documents for setting up a business in Dubai.

The prior collected details, such as the business activity, location, business name, and others, will be used to file an application on the UAE’s Department of Economic Development (DED) website.

If you are starting a business in partnership, then you will be required to submit passport copies of all the partners in the business. 

Note: To set up a company in Mainland Dubai, specific capital requirements must be fulfilled, which must be documented in a Memorandum of Association.

Obtain Initial Approval

Before obtaining a trade license in Dubai, you must get initial approval for everything discussed above. You can use a service DED’s website to start the initial approval process to determine the company’s legal structure, economic activities, and license partners. 

This service can be obtained either before or after reserving a trading name. It helps the customer understand the requirements and legalities involved in setting up the business and ensures that everything complies with the regulations.

Documents commonly required for initial approval:

  • Completed application form
  • Business plan
  • Copy of existing trade license/registration certificate (if applicable)
  • Passport copies of the company’s shareholders and appointed manager
  • Registry Identification Code Form (RIC) for appointed manager (original and notarized)
  • Specimen signatures of the company’s shareholders and appointed manager
  • Title deeds (if applicable)
  • A brief letter clarifying the investment idea and the investor’s plan (Letter of Intent)
  • 2 years of audited financial reports or certificate of reference from a bank (as required)

Documents commonly required for freelancers/professionals

  • Application for registration
  • Curriculum vitae or profile
  • Reference letter from a bank
  • Registry Identification Form (RIC) for Director (original and notarized document)

Create LSA or Memorandum of Association

As the next course of action, you must create a Memorandum of Association (if the legal form of the company is a civil company, limited liability company, public shareholding company, or private shareholding company) or local service agent agreement (LSA) for a sole proprietorship.

MOA or LSA is an important legal corporate document that needs to be drafted with utmost care and accuracy

You are ready to apply for a trade license in Dubai at this stage. But if your business falls under certain business activities, you may need additional documents and approvals from the government.

After getting initial approval and an MOA/LSA, you can begin to file your application for the business license on the official website of the Ministry of Economy – UAE: https://www.moec.gov.ae/en/register-license

Note: You must submit all the documents collected above and pay the fees to obtain the license.

The license is available both offline at the service centers of the economic department or on their website.

Begin Application for Trade License

After getting initial approval and an MOA/LSA, you can begin to file your application for the business license on the official website of the Ministry of Economy – UAE: https://www.moec.gov.ae/en/register-license

Note: You must submit all the documents collected above and pay the fees to obtain the license.

The license is available both offline at the service centers of the economic department and on their website.

Step 6 - Choose an Office Space

When choosing an office space for your business in Dubai, it is essential to consider factors such as location, size, and cost. 

UAE offers a variety of office spaces catering to small and large businesses needs. You can choose from various options, including virtual offices, shared workspaces, and fully furnished private offices.

A coworking space may suit you if you want a cost-effective option. This option allows you to have a prestigious address without the cost of physical office space. Shared workspaces are also popular for startups and small businesses, offering a collaborative environment and cost-effective solutions.

For larger businesses, fully furnished private offices are available in different sizes and can be customized to meet your needs. When choosing an office space, it is essential to consider the location and proximity to transportation and amenities to ensure convenience for you and your employees.

Step 7 - Open a Corporate Bank Account

Opening a corporate bank account in the UAE is mandatory to set up a business. You’ll need to provide proof of physical presence for all business partners during document submission. 

Offshore businesses must verify their documents from the relevant Emirates Consulate and the UAE’s Foreign Affairs Ministry.

Below are the documents required for opening a bank account in Dubai, UAE:

  • Complete Business Profile
  • Last 6 months’ bank statement
  • Resume of the account holder and other stakeholders involved
  • Proof of physical existence
  • Valid Passport or Emirates ID
  • Trade License
  • Company’s regulatory document
  • Directors Resolution

Step 8 - Choose an Office Location to Begin Business Activity In Dubai

UAE offers a variety of office spaces that are ideal for small and medium-sized businesses, as well as larger enterprises. These office spaces are available according to the specific legislative directions of each location and can provide an excellent outlet for your business operations in the region.

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Why Set Up a Business in UAE

If you are considering setting up a business in Dubai or UAE, here are some reasons why you should start your business in Dubai.

Economic Stability

UAE is one of the most stable economies in the world. This ensures that your business will be able to thrive & witness a steady growth trajectory.

Ease of Doing Business in Dubai & UAE

The United Arab Emirates received 16 index points in 2022 for ease of doing business. This means that your business will be up & running at a much faster rate than in most countries!

Variety of Business Premises

UAE offers a wide range of business setup solutions such as free zones, mainland, offshore companies, etc.

Tax-free Regime

As a foreign investor, you are not required to pay tax in the UAE. This means more of your profits will remain with you!.

Range of License Types and Business Activities Permitted

Depending on the license type you acquire for your business setup in Dubai, you can engage in trading, manufacturing, service provision, logistics, and more.

Strategic location

The UAE is located in a prime position between Asia, Europe, and Africa, making it a perfect hub for businesses that want to expand globally.

Taxation

The UAE has a favorable tax environment, with zero corporate or personal income taxes levied on companies or individuals. This makes it an attractive option for entrepreneurs looking to maximize profits.

Business-friendly policies

The UAE government has created a business-friendly environment with streamlined company registration, licensing, and permitting procedures. This helps new businesses to get up and running quickly and efficiently.

Growing Economy

The UAE has a thriving economy, with a high GDP per capita and a diversified range of industries. This means new businesses have plenty of opportunities to succeed and grow.

What Business Set Up Option Is Best for Your Business?

Free Zones
  • Maintain complete control over your company.
  • A tax rate of 0% on your income.
  • No custom duties applied.
  • Free to retain 100% of your wealth and earnings.
Learn More
Mainland
  • Business activities are not restricted.
  • Operate business activities both inside and outside of the country.
  • No limitation on the total number of visas that can be applied for.
Learn More

Required But Not Mandatory Government Approvals

Disclaimer: Certain business activities may require additional approvals from relevant government entities. Below are some examples of such activities, categorized by the ministry:

  • Ministry of Justice: approvals for legal activities and legal consultancy.
  • Telecommunications and Digital Government Regulatory Authority (TDRA): approvals for telecommunication activities.
  • Ministry of Interior: approvals for activities related to general transport such as driving schools, fire equipment, alarm, and safety systems, used-car dealers, used auto parts, and car rental.
  • Executive Council: approvals for travel and tourism, general services, charter trading, ship and maritime agencies, car clubs, charter air transport, and foreign company branches.
  • Local municipal department: approvals for architectural and engineering affairs.
  • Local health departments: approvals for health-related activities.
  • Ministry of Economy: approvals for insurance activities and insurance consultancy.
  • Supreme Petroleum Council: approvals for onshore and offshore gas and oil-field services and onshore and offshore oil drilling operations.

List of Documents Required to Start a Company in Dubai

To acquire a business license for company formation in Dubai, UAE, the following documents are typically required (these are also mentioned above in the stages where those are required):

  • Application form: The official form necessary to apply for a business license in Dubai.
  • Passport copies: Copies of the passport of all shareholders and managers of the company.
  • Visa copies: Copies of the UAE visa of all shareholders and managers of the company.
  • No-objection certificate: A document stating that the visa sponsor has no objection to the applicant starting a business in Dubai.
  • Memorandum of Association (MOA): A legal document outlining the company’s purpose and defining the shareholders’ roles and responsibilities.
  • Tenancy contract: A contract that shows the business has a physical address in Dubai.
  • Ejari certificate: A certificate issued by the Dubai Land Department that verifies the tenancy contract.
  • Initial approval certificate: A certificate issued by the Department of Economic Development that confirms the business activity and name are approved for licensing.
  • Bank reference letter: A letter from the applicant’s bank confirming the account holder’s good standing.
  • Business plan: A document that outlines the company’s objectives, strategies, and financial projections.

Guide for Business Setup in Dubai

How to Make a Startup Business Plan?

Want to start a new business but without a business plan? You won’t go far away. A business plan is essential for starting a business in Dubai / UAE. Our expert guide to creating a business plan for the UAE is totally free!
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Free Zone VS Mainland

Want to establish a business setup in Dubai? There are two main options available for you. Free Zone And Mainland. Learn about the differences between Free Zone vs Mainland company setup to see which one is better for you.
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How to Start a Business in UAE Free Zones?

The free trade zones have offices, warehouses, and other facilities that are already built and ready to use. If you wish to set up a free zone company, check out our free zone company formation guides.
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Company Registration in Dubai

Done with creating a business plan? Next, you need to form a company in Dubai, UAE. Airzone’s trusted network of business formation service providers makes it easy for businesses to register quickly and easily in the UAE.
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How to Get Trade License?

Obtaining a Dubai trade license is fairly challenging. You must go through various time-consuming stages to obtain your trade license. We can help you understand the complex process of getting a trade license in the UAE. Our guide on how to get a trade license in UAE is perfect for new entrants.
Read More

How to open Business Bank Account?

To be able to establish and run a business in UAE, you’ll need to open a corporate bank account. Our partners will make it easy for you to open a bank account in the UAE in no time. Or you can open it yourself by following our detailed corporate bank account opening guide.
Read More

Frequently Asked Questions

How long does it take to finish the company formation process in UAE?

The time limit for setting up a company in Dubai is between four and five working days. However, this might vary depending on various variables, like the nature of your business and the criteria of each business license.

What is the cost of setting up a business in Dubai?

The cost of registering a Limited Liability Company in Dubai typically ranges between AED 22,000 and AED 24,000. Alternatively, the cost of establishing a company in a free zone begins at around AED 15,000.

Is it possible for a foreigner to own a business in Dubai?

It is possible for a non-local to launch a company in Dubai, and a good number of them do so. Investors and entrepreneurs from other countries are made to feel quite welcome in Dubai.

What kind of license should be obtained in order to set up a business in Dubai?

According to the rules, every entrepreneur who wants to start a business in Dubai must first obtain a trade license. The competent authority that issues trade licenses in Dubai mainland is the Department of Economic Development (DED), and the authority has stipulated specific procedures to obtain the license.

What Is the Best Business to Start in the UAE?

There is no one-size-fits-all answer to this question, as the best business to start in the UAE will vary depending on your specific skills and interests. However, some of the most successful businesses in the UAE are those that cater to the local market, such as restaurants, retail stores, and service businesses. If you have an entrepreneurial spirit and are willing to put in the hard work, starting a business in the UAE can be a very rewarding experience

What Is the Cheapest Business to Start in the UAE?

The cost of setting up a company in the UAE can range from AED 50,000 to AED 1 million. But, If you’re looking for a cheaper option, there are a few businesses you can start in the UAE with a lower investment. Here are some ideas:

  • Advertising Agency
  • Arts Crafts Making
  • Bookkeeping Business
  • Consulting Business
  • eCommerce Business
  • Handyman Business
  • Home-Based Cooking Business
  • IT-Related Business
  • Jewelry making Business
  • Recruitment Agency Business

How Do I Get a DED license?

The DED trade license is obtained through the Dubai Economic Department. The application process is simple and can be done online. Once you have submitted your application, you will need to pay the relevant fees and receive the license electronically.

Is There Income Tax in Dubai?

Yes, Dubai has introduced corporate income taxes for the first time, set to come into effect in 2023. The UAE had previously been one of the few countries in the world without any form of taxation, but this is changing with the introduction of VAT in 2018 and now corporate income tax. These taxes are designed to help diversify the economy and make it less reliant on oil revenues. The tax rates in Dubai are relatively low, starting at just 3% for companies with taxable income of up to AED 500,000. The maximum rate is set at 20%, which will apply to companies with taxable income of over AED 100 million.