Dubai has become one of the world’s most attractive destinations for entrepreneurs and investors. With zero income tax, a strategic global location, world-class infrastructure, and a business-friendly environment, it’s no surprise that thousands of startups and multinational companies have made Dubai their base.
But if you’re new to the region, you might be wondering: How exactly do you set up a business in Dubai? Whether you’re launching a small consultancy, opening a retail shop, or starting a tech company, Dubai offers a wide range of business setup options that cater to different industries and budgets.
Having helped several entrepreneurs navigate the process, I can tell you that starting a business here is relatively straightforward—provided you follow the correct steps, stay compliant, and understand the local regulations. Here’s a clear guide to help you get started.
Step 1: Choose Your Business Activity
Your first step is to decide what kind of business you’re going to run. Dubai has a comprehensive list of over 2,000 permitted business activities, ranging from e-commerce and hospitality to logistics and creative services. You’ll need to pick one or more activities during your license application, and your choice will influence what type of license you need.
This step is crucial because choosing the wrong category can lead to delays or rejection. It’s always a good idea to consult with a business setup advisor or check the Dubai Department of Economic Development (DED) activity list for clarity.
Step 2: Select the Right Legal Structure
Dubai offers several legal structures depending on your business model, number of shareholders, and capital investment. Some of the most common options include:
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Sole Proprietorship – Suitable for one-person-owned businesses
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Limited Liability Company (LLC) – Ideal for small to medium-sized enterprises
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Free Zone Company – Great for 100% foreign ownership and tax benefits
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Branch of a Foreign Company – For expanding international businesses
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Civil Company – Typically for professionals like doctors, engineers, or consultants
Each structure comes with its own legal and financial responsibilities, so make sure to choose one that fits your business goals.
Step 3: Mainland or Free Zone?
This is one of the biggest decisions in your business setup in Dubai journey. There are two main jurisdictions:
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Mainland (Onshore): You can trade freely within the UAE and internationally. You must obtain your license through the DED. Most professional licenses allow 100% foreign ownership now, but some sectors may still require a local Emirati service agent.
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Free Zone: These are designated economic zones (like DMCC, JAFZA, Dubai South, DIFC) that allow 100% foreign ownership, tax exemptions, and quick setup. However, free zone businesses are usually restricted from doing business directly with the UAE market unless through a distributor or local agent.
Your choice depends on your target customers, location preference, and budget. Free zones are ideal for startups, freelancers, or export-driven companies, while mainland companies are better for businesses that need to serve the UAE domestic market directly.
Step 4: Register a Trade Name
Your trade name must reflect the nature of your business, avoid offensive language, and follow UAE naming guidelines. It should not refer to any religious or political group and must not resemble the names of other registered companies.
You can reserve your trade name online through the DED portal or the relevant free zone authority. Trade name approval is one of the earliest steps in the licensing process.
Step 5: Apply for Initial Approval
Once your business activity and trade name are approved, you need to get initial approval from the Department of Economic Development (for mainland) or your selected free zone. This indicates that the government has no objection to you starting your business.
In some cases, you may also need external approvals from other departments—like the Dubai Municipality, Dubai Health Authority, or the Roads and Transport Authority—depending on your activity type.
Step 6: Prepare the Legal Documents
The exact paperwork varies by business structure and location, but generally includes:
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Application form
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Passport copies of shareholders
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Visa copies or entry stamps (if already in UAE)
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No Objection Certificate (NOC) from sponsor (if applicable)
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Memorandum of Association (MOA)
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Lease agreement for office or coworking space
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Additional approvals (if your activity requires them)
Free zones usually offer simplified processes with bundled office packages and pre-approved legal templates, which makes documentation much easier.
Step 7: Rent an Office or Virtual Space
Most licenses in Dubai require a physical office space or at least a Flexi-desk. If you’re setting up in the mainland, the lease must be registered with Ejari (Dubai’s real estate registration system). Free zones offer various space options, from virtual offices and shared desks to full-floor corporate spaces.
The type of office space you choose will affect how many employee visas you can apply for under your business license, so it’s best to consider your growth plans while choosing.
Step 8: Finalize the License and Pay Fees
Once everything is approved and all documents are submitted, you’ll receive your trade license—the official document that allows you to operate legally in Dubai. Licensing fees can vary widely depending on your jurisdiction, activity type, and office space.
Mainland licenses typically cost between AED 15,000 to AED 25,000 annually, while free zone packages can start from as low as AED 5,000 for freelancers or AED 12,000–20,000 for small businesses.
Step 9: Apply for Residency Visas and Bank Account
After your trade license is issued, you can apply for residence visas for yourself and your employees under your company. The number of visas you’re allowed depends on your license type and office size.
Next, open a corporate bank account with a local or international bank in the UAE. This can sometimes be the most challenging part due to strict compliance rules, but with the right paperwork and a good business plan, it’s manageable.
How Long Does the Setup Process Take?
If all documents are in order, your business setup in Dubai can be completed in as little as 5 to 10 working days. Free zones tend to be quicker due to their streamlined processes, while mainland setups may take longer depending on external approvals and Ejari registration.
Final Thoughts
Starting a business in Dubai might seem complex at first, but once you break it down, it’s a logical and structured process. The key is to choose the right jurisdiction, understand the legal requirements, and stay compliant with local regulations.
Whether you’re launching a tech startup, opening a boutique, or providing consulting services, Dubai offers an excellent environment to grow your venture. With the right guidance and preparation, your business can thrive in one of the most dynamic cities in the world.
So if you’ve been thinking about turning your idea into reality, now might be the perfect time to take the leap and begin your journey of business setup in Dubai.
