Business Setup In Dubai – A Complete Guide For 2025

10 Apr 2025

By Vista Corp

Why Dubai Is a Global Hotspot for Business Setup

Dubai has transformed itself from a desert outpost into one of the world’s top business hubs. What makes it especially attractive for entrepreneurs and global investors is its strategic location — sitting at the crossroads of Europe, Asia, and Africa. This geographic advantage facilitates easy access to over 2 billion consumers within a 4-hour flight radius. Dubai also boasts a zero personal income tax policy and a relatively low 9% corporate tax, which came into effect recently but still keeps the emirate highly competitive. Add to that the ease of doing business, government-led digital transformation, and robust infrastructure — and you’ve got a city that truly supports entrepreneurs.

Post-Expo 2020, Dubai’s economic agenda, “D33,” aims to double the size of the economy by 2033, making now the best time to invest. From startups to global conglomerates, businesses across all sectors—from tech to retail—are thriving here. The UAE also introduced 100% foreign ownership reforms, making it easier for expatriates to launch and fully own businesses. With world-class amenities, political stability, and consistent pro-business reforms, Dubai continues to be a magnet for business setup. It’s not just about opportunity—it’s about building long-term value in one of the world’s most dynamic markets.

Tax-Free Benefits & Pro-Business Environment

One of the most compelling reasons to establish a business in Dubai is its favorable tax regime. The emirate offers:

• Zero Personal Income Tax: Individuals enjoy 0% tax on personal income, allowing entrepreneurs to retain more of their earnings.​
  
• Low Corporate Tax Rates: As of June 2023, the UAE introduced a 9% corporate tax on business profits exceeding AED 375,000. However, this rate remains competitive compared to global standards. ​
  
• Free Zones with Tax Incentives: Numerous free zones in Dubai provide tax exemptions, including 100% foreign ownership and zero import or export duties.​
  

Additionally, the Dubai government actively fosters a pro-business environment through initiatives like the Bashr service, which allows investors to establish a company online within 15 minutes. ​

100% Foreign Ownership and Legal Reforms

Historically, foreign investors were required to have a local sponsor holding a 51% stake in mainland companies. Recent legal reforms have transformed this landscape:

Full Foreign Ownership: As of 2025, many business activities permit 100% foreign ownership without the need for a local partner.

• Streamlined Regulations: The Department of Economic Development (DED) offers services like instant licensing and trade name reservations, simplifying the setup process. ​
  

Strategic Location & Global Trade Access

Dubai’s geographical position offers unparalleled access to key markets:

• Gateway Between East and West: Situated at the crossroads of Europe, Asia, and Africa, Dubai serves as a strategic hub for international trade.​
  
• World-Class Infrastructure: Home to one of the busiest airports and seaports globally, Dubai facilitates seamless logistics and connectivity.​
  

Infrastructure, Talent Pool, and Lifestyle Perks

Beyond its business advantages, Dubai offers:

• State-of-the-Art Infrastructure: From cutting-edge office spaces to advanced telecommunications, the city provides top-tier facilities for businesses.​
  
• Diverse Talent Pool: With over 200 nationalities residing in Dubai, companies have access to a multicultural and skilled workforce.​
  
• High Quality of Life: Dubai boasts a safe environment, modern amenities, and a cosmopolitan lifestyle, making it attractive for professionals and their families.

Types of Business Entities You Can Set Up in Dubai

Choosing the right business structure is a crucial first step in your Dubai company setup journey. The type of entity you form directly affects your ownership rights, visa eligibility, tax obligations, and market access. Fortunately, Dubai offers several flexible options tailored to different business goals and budgets.

Mainland Company Formation in Dubai

Mainland companies are licensed by the Department of Economy and Tourism (DET) and allow you to operate anywhere in the UAE without restrictions. These are ideal if you want to do business both locally and internationally. Thanks to the 2021 legal reforms, many activities no longer require a local sponsor—you can now own 100% of the business as a foreigner, depending on the business activity. You’ll also need to lease office space and obtain a trade license.

Free Zone Company Setup in Dubai

Free zones are special economic areas that offer tax benefits, easy visa processing, and full foreign ownership. They are perfect for startups, e-commerce ventures, and service-based businesses. Popular free zones include DMCC, Dubai South, and IFZA, each catering to specific industries.

Offshore Company Formation in Dubai

Offshore companies are used primarily for international business, asset protection, and holding structures. They’re not allowed to trade within the UAE but offer privacy, zero taxes, and simplified documentation. JAFZA Offshore and RAK ICC are two popular offshore jurisdictions.

How to Start a Business in Dubai: Step-by-Step Process

Starting a business in Dubai might sound complex, but it’s a clearly defined process if you follow the right steps. Whether you’re setting up in the mainland, free zone, or offshore, this section breaks down the journey into manageable steps.

Step 1 – Choose Your Business Activity

Dubai allows over 2,000 legally recognized activities across commercial, professional, industrial, and tourism sectors. Your chosen activity will determine the type of license you need and the business jurisdictions available. For example, retail requires a commercial license, while consultancy needs a professional license. It’s crucial to pick an activity aligned with your long-term goals—and approved by the relevant authority.

Step 2 – Decide on Jurisdiction

Your next decision is where to set up: Mainland, Free Zone, or Offshore. Each has pros and cons:

Step 3 – Finalize Legal Structure

Depending on your business size and nature, you can choose among several legal structures like LLC (Limited Liability Company), Sole Establishment, Civil Company, Branch Office, or Free Zone Company. LLCs are common for businesses needing flexibility and access to local and international markets.

• LLC (Limited Liability Company) – For flexible ownership and market access
  
• Sole Proprietorship – For individuals offering professional services
  
• Branch Office – For foreign companies expanding into Dubai
  
• Free Zone Company (FZC or FZE) – For 100% foreign-owned entities in free zones
  

Make sure your structure aligns with your long-term goals and operational needs.

Step 4 – Trade Name Registration

Your trade name is the public identity of your business, so choose wisely. The name should reflect your activity, be unique, and comply with Dubai’s naming guidelines. It can’t include religious references, offensive language, or the names of international organizations (unless you’re affiliated). The name must be submitted for approval through the relevant authority—DET for mainland businesses and the respective free zone authority for free zone companies. Once approved, it will be reserved for a limited time, typically 6 months.

Pro tip: Try checking domain availability at the same time, so your online identity aligns with your business name.

Step 5 – Apply for Initial Approval

Once your trade name is approved, the next step is getting initial approval. This document states that the government has no objection to your business. It’s not a license yet—but it allows you to proceed with documentation and formalities. You’ll need:

• Passport copies of shareholders
  
• Business plan (for certain activities)
  
• Completed application form
  

The approval typically takes 2–5 working days, depending on your chosen jurisdiction and business activity.

Step 6 – Draft the MOA & Lease Office Space

The Memorandum of Association (MOA) outlines your company’s ownership structure, shareholder roles, profit distribution, and operational limits. For mainland businesses, this is a legal requirement and must be notarized in Arabic and English. Simultaneously, you must lease office space. Many startups opt for co-working spaces or flexi-desks in the beginning. Free zones offer affordable packages with shared office options, while mainland setups require a physical office—minimum of 200 sq. ft. in most cases.

Step 7 – Get Your Trade License

This is the most critical step—your business becomes officially legal only when you receive your Dubai business license. The type of license—commercial, professional, industrial, or tourism—depends on your activity. Documents required include:

• MOA
  
• Tenancy contract (Ejari)
  
• Initial approval certificate
  
• Shareholder documents
  

The license is issued by DET (for mainland) or the free zone authority. Once received, you can begin business operations, issue invoices, and open bank accounts.

Step 8 – Open a Corporate Bank Account

Opening a business bank account in Dubai can be slightly time-consuming due to KYC norms and compliance checks. Most banks require:

• Trade license
  
• Shareholder passport copies
  
• Office lease agreement
  
• Business plan and projected revenues
  

Popular banks include Emirates NBD, Mashreq, RAKBANK, and international names like HSBC. Account approval takes anywhere from 5 to 15 business days, depending on your documents and activity.

Step 9 – Apply for Visas

Once your license is ready, you can apply for residence visas for yourself, your partners, staff, and family members. The visa process includes:

• Entry permit
  
• Medical fitness test
  
• Emirates ID registration
  
• Stamping of visa on the passport
  

Business owners typically apply for Investor Visas, which can range from 2 to 10 years depending on the setup and investment amount. For family sponsorships, proof of income and housing is required.

Cost of Setting Up a Company in Dubai

One of the most common questions entrepreneurs have is, “How much does it cost to set up a business in Dubai?” The answer depends on several factors, including your chosen jurisdiction (mainland, free zone, or offshore), type of license, office space, number of visas, and business activity. While Dubai offers packages for all budgets, understanding the breakdown of costs helps you plan better.

Business Setup Cost in Dubai Mainland vs Free Zone

Mainland setups tend to be slightly more expensive due to office space requirements and additional government documentation. Free zones offer bundled packages that include the license, flexi-desk, and visa quota.

Hidden Costs to Watch Out For

Even with advertised packages, it’s essential to consider hidden or optional expenses that may apply to your business:

• Immigration card renewal (yearly)
  
• Medical insurance (mandatory for visa holders)
  
• Emirates ID processing fees
  
• Document attestation (especially for foreign documents)
  
• Office relocation or Ejari registration charges
  

Always ask your business setup consultant for a clear cost breakdown to avoid surprises later.

Budget-Friendly Business Setup Options

Startups and freelancers can also benefit from affordable licenses such as:

• Freelance Permits (IFZA, DDA, RAKEZ)
  
• E-commerce License Packages (Dubai CommerCity, SPC Free Zone)
  
• Zero Visa Packages for solopreneurs
  

These packages start as low as AED 5,750 annually, depending on the zone and number of services required. While these are great for starting lean, note that they come with limited visa quotas and activity restrictions.

Legal and Compliance Requirements for Business Setup in Dubai

Setting up a business in Dubai is more than just getting a license. You must also comply with various legal requirements that apply to your company’s activity, structure, and jurisdiction. Failing to stay compliant could result in penalties or even license cancellation, so it’s vital to get it right from day one.

Trade License Application and Renewal

Every business in Dubai requires a valid trade license. These licenses fall into categories such as commercial, professional, industrial, and tourism. Once issued, a trade license is valid for one year and must be renewed annually. Renewal involves submitting:

• Updated tenancy contract (Ejari)
  
• License renewal form
  
• Payment of renewal fees
  
• Valid MOA (for mainland companies)
  

If you miss the renewal deadline, late fees apply, and your business may be blacklisted temporarily. It’s wise to set reminders or opt for automatic renewal services offered by many business setup consultants.

UAE Business Laws and Regulations

All Dubai businesses must adhere to national laws such as:

• UAE Commercial Companies Law
  
• Anti-Money Laundering (AML) Regulations
  
• Economic Substance Regulations (ESR)
  
• Ultimate Beneficial Ownership (UBO) Declarations
  

In 2025, the UAE has tightened compliance to align with international standards. Companies in regulated sectors (finance, real estate, legal, crypto, etc.) must undergo enhanced due diligence and regular audits.

Additionally, you must maintain proper bookkeeping, file annual returns, and register for VAT if your annual turnover exceeds AED 375,000. Free zones like DMCC and DIFC also have internal compliance frameworks you must follow.

Best Free Zones in Dubai for Startups

Dubai’s free zones are a magnet for startups looking to scale quickly without excessive regulatory hurdles. They offer a range of benefits like 100% foreign ownership, zero income tax, and simplified visa processes. As of 2025, over 30 free zones cater to different industries—each with its own rules, incentives, and business ecosystems.

Here are some of the best free zones for startups:

Dubai Multi Commodities Centre (DMCC)

Voted as the world’s top free zone multiple years in a row, DMCC is ideal for trading, commodities, and fintech startups. It’s located in Jumeirah Lake Towers (JLT) and offers:

• Access to co-working and flexi-desk options
  
• Excellent banking support
  
• Over 20,000 registered companies
  

IFZA (International Free Zone Authority)

Based in Dubai Silicon Oasis, IFZA is one of the most affordable and startup-friendly zones. It allows:

• License issuance within 2 days
  
• Flexible visa packages
  
• Shared office or desk-based solutions
  
• E-commerce and consultancy activities
  

Dubai Silicon Oasis (DSO)

A tech-focused free zone, DSO is ideal for IT, electronics, and research-based companies. It offers:

• Access to R&D centers
  
• Dedicated startup incubators
  
• Government tech grants (for selected projects)
  

Dubai Internet City (DIC)

Home to tech giants like Microsoft and Oracle, DIC is best suited for:

• SaaS and software companies
  
• Digital media agencies
  
• Startups with regional and global scale-up goals
  

Comparison Table: Best Free Zones for Startups

These zones offer business owners a streamlined setup, startup support, and the ability to focus on growth without excessive red tape.

Dubai Business Setup for Foreigners

Dubai has long been recognized as one of the most foreigner-friendly business hubs in the world, with more than 80% of the population made up of expatriates, many of whom are successful business owners. Whether you’re a digital entrepreneur from Europe, a trader from India, or a startup founder from Africa or the US—setting up a business in Dubai as a foreigner is 100% legal, accessible, and encouraged.

Thanks to recent legal reforms, expats can now enjoy full foreign ownership, fast-track licensing options, and eligibility for long-term residency visas, making the UAE one of the best destinations for business migration.

Can a Foreigner Open a Business in Dubai Mainland?

Yes. Since the 100% foreign ownership law was introduced in 2021, many business activities in the mainland no longer require a local Emirati sponsor. Foreigners can now legally own 100% of their company—especially in industries like consulting, IT, trading, and services. However, a few strategic sectors may still require local involvement, so it’s important to verify this during setup.

Benefits of Starting a Business in Dubai as a Non-Resident:

• 100% foreign ownership for most activities (consulting, trading, tech, media, etc.)
  
• No personal income tax
  
• Residency visa eligibility for yourself and your family
  
• Strategic access to Europe, Asia, and Africa from a global hub
  
• Business-friendly banking with access to international and Islamic banks
  
• Fast company registration—license approval in as little as 2–7 days
  
• Reputation boost from being based in a globally respected jurisdiction

Visa Requirements and Residency

Foreign entrepreneurs can apply for a 2-year investor visa, or even a 10-year Golden Visa if their investment meets specific thresholds. These visas allow you to sponsor family members and employees. Documents typically required include:

• Passport copy
  
• Trade license
  
• Medical fitness report
  
• Emirates ID application

Business Visa and Residency Options in Dubai

Dubai offers a variety of residency visa options tailored to business owners, investors, freelancers, and skilled professionals. These visas not only allow you to live and work in the UAE but also offer the ability to sponsor your family, rent property, and open bank accounts. Visa processing is efficient, with most applications completed within 7 to 15 working days after license issuance.

What Documents Do Foreigners Need to Start a Business in Dubai?

Whether you’re setting up in the mainland or a free zone, most foreign applicants will need:

• Passport copy (valid for at least 6 months)
  
• Passport-size photos (white background)
  
• Proposed trade name and business activity
  
• Business plan (for selected sectors or high-risk activities)
  
• Proof of residence or address (optional in some zones)
  
• Entry permit (for visa applications)
  
• UAE mobile number (for government communications)
  

Mainland setup may also require a notarized Memorandum of Association (MOA) and office lease (Ejari).

Dubai Free Zone Company Formation for Foreigners

Free zones are often the preferred route for non-residents due to:

• Zero need for local partners
  
• Simplified paperwork
  
• Multi-year business licenses (1, 2, or 3-year options)
  
• Remote company setup with no physical visit required
  
• Packages starting from AED 5,750 annually
  

Top Free Zones for Foreign Founders:

• IFZA – Best for consultants and freelancers
  
• DMCC – Ideal for traders and fintech startups
  
• Dubai South – Great for e-commerce and logistics
  
• RAKEZ – Offers remote setup and global reach from Ras Al Khaimah
  

Dubai Mainland Business Setup for Foreigners

While the mainland used to require local sponsors, most commercial and professional activities now qualify for 100% expat ownership. Mainland businesses are ideal for those who want:

• Access to local UAE market
  
• Unlimited visa quotas (based on office space)
  
• Eligibility to work with government clients
  
• Physical office space and local credibility
  

The Department of Economy and Tourism (DET) regulates mainland licensing. A local service agent may still be needed for a few activities but does not hold equity.

Investor Visa Dubai

The Investor Visa is the most popular option for entrepreneurs setting up in Dubai. This visa typically comes with a 2-year or 10-year validity, depending on your investment amount and business type. Here’s what you need:

• Valid trade license
  
• Immigration establishment card
  
• Medical fitness test & Emirates ID application
  
• Passport-sized photos
  

Investors holding property worth AED 2 million or more can also apply for Dubai’s Golden Visa, a 10-year renewable residency permit with added perks like fast-tracked government services and no local sponsor requirement.

Employment & Family Visas

Once your business is registered, you can apply for employment visas for your staff. The number of visas permitted depends on:

• Your office size (for mainland)
  
• The visa quota allotted by your free zone
  

You can also sponsor:

• Spouses and children
  
• Parents (with conditions)
  
• Domestic workers (if eligible)
  

Visa processing includes an entry permit, medical test, and Emirates ID registration, followed by visa stamping in your passport.

Industry-Specific Company Setup Guides in Dubai

While Dubai welcomes all types of businesses, the process and requirements can vary slightly depending on the industry you operate in. Some sectors have additional licensing layers, special approvals, or strategic location advantages. Here’s a breakdown of how to set up in some of Dubai’s most in-demand industries:

Real Estate Business Setup in Dubai

The Dubai real estate sector is booming, with strong demand in sales, rentals, and property management. Whether you’re looking to start a brokerage, holiday home company, or property advisory, here’s what you’ll need:

• Obtain a Real Estate Brokerage License from the Dubai Land Department (DLD)
  
• Complete the RERA certification (mandatory exam)
  
• Secure a physical office space (virtual is not allowed)
  
• Meet minimum capital requirements (typically AED 50,000+)
  

This sector is highly regulated but extremely profitable—especially for agents who partner with top developers or manage luxury rentals.

Retail and Hospitality Business Setup

Retail companies need a commercial license and must comply with consumer protection and DED regulations. If you’re opening a restaurant or café, additional approvals from:

• Dubai Municipality (food safety & hygiene)
  
• Civil Defense (fire safety compliance)
  
• Food outlets need a Food Safety Certificate
  
• Interior layout approval from Civil Defense
  
• Hotel or travel businesses need DTCM approval
  
• For restaurants: grease trap installation, waste disposal contract, pest control tie-up
  

Hospitality ventures like boutique hotels or travel agencies require Department of Tourism and Commerce Marketing (DTCM) approval.

IT and Tech Company Setup in Dubai

Perfect for freelancers, startups, and software firms. Preferred zones:

• Dubai Internet City (DIC) for innovation-driven companies
  
• DSOA or IFZA for cost-effective licensing
  

Benefits include access to tech grants, startup incubators, and partnerships with global players.

Construction Business Registration in Dubai

Requires a technical services or contracting license. Approvals may be needed from:

• Dubai Municipality
  
• Trakhees (for projects in special zones)
  
• Engineering bodies (for structural design validation)
  

A qualified engineer or technical director is often required on the license.

Dubai Company Formation Without Local Sponsor

One of the most game-changing reforms in recent years is the abolition of the mandatory local sponsor requirement for many business activities in Dubai. This has made the emirate significantly more appealing for foreign entrepreneurs who want 100% ownership and control of their business—without needing an Emirati shareholder.

What Changed After the 2021 Law?

Before 2021, most mainland businesses required a UAE national to hold 51% of company shares, with the expat partner holding 49%. However, the UAE Commercial Companies Law was amended in June 2021, eliminating the local sponsor requirement for over 1,000+ business activities across commercial and industrial categories.

Now, many businesses can enjoy:

• 100% foreign ownership
  
• Full profit retention
  
• No need for profit-sharing agreements or nominee arrangements
  

Which Activities Qualify for 100% Ownership?

Not all activities are eligible yet. Typically, the following do qualify:

• Consulting services (marketing, IT, HR)
  
• Trading companies (non-strategic goods)
  
• Manufacturing and industrial services
  
• Real estate management (non-brokerage)
  

Activities still considered strategic—such as oil, defense, or security—may still require local involvement or special approvals.

You can check activity eligibility on the Department of Economy & Tourism (DET) portal or consult with business setup professionals.

Free Zones Still Offer Full Ownership

Even before the reform, Dubai free zones allowed full ownership. Zones like DMCC, IFZA, DSO, and DAFZA continue to offer 100% expat ownership, no customs duty on imports/exports, and repatriation of profits.

So whether you go to the mainland or free zone—Dubai now gives you the flexibility to choose ownership on your own terms.

Frequently Asked Questions (FAQs)

What is the process to start a mainland company in Dubai?

Starting a mainland company involves the following steps:

1. Choose a business activity and confirm if it qualifies for 100% foreign ownership.
   
2. Reserve a trade name and get initial approval from DET.
   
3. Draft and notarize the Memorandum of Association (MOA).
   
4. Lease a commercial space and register the tenancy contract (Ejari).
   
5. Submit all documents to obtain the trade license.
   
6. Apply for visas, open a corporate bank account, and begin operations.
   

With the support of business setup consultants, the process is streamlined and typically completed in 5 to 10 working days.

How much does it cost to set up a business in Dubai mainland?

The cost varies based on activity, office location, number of visas, and license type. On average:

• Basic license + admin fees: AED 12,000 – AED 15,000
  
• Office space (Ejari): From AED 15,000/year
  
• Visa costs per person: AED 3,500 – AED 7,000
  
• MOA notarization & legal translation: AED 2,000 – AED 4,000
  

A complete setup for a small team may range between AED 25,000 to AED 40,000.

What documents are required to open a business in Dubai mainland?

You will need:

• Passport copies of all shareholders
  
• Proposed trade name and activity list
  
• MOA (notarized)
  
• Initial approval certificate
  
• Lease agreement (Ejari)
  
• Emirates ID (if applicable)
  
• Business plan (for certain activities)
  

Additional documents may be required based on your business type or if you’re applying for visas.

How long does it take to get a mainland business license in Dubai?

The average time to get a business license is 5 to 10 working days, assuming all documents are submitted correctly. Delays may occur if approvals are needed from external authorities, especially for regulated sectors.

Can a foreigner open a business in Dubai mainland?

Yes, under the current laws, most business activities in Dubai mainland allow 100% foreign ownership. No local Emirati sponsor is required for non-strategic sectors, making Dubai more open to international entrepreneurs than ever before.

What is the difference between mainland and freezone companies in Dubai?

Do I need a local sponsor to start a mainland company in Dubai?

In most cases, no. Since the 2021 legal reforms, most business activities in Dubai mainland allow 100% foreign ownership. However, for strategic sectors like defense, oil, or telecom, a local partner or special approval may still be needed.

Which license is required to start a business in Dubai mainland?

The license depends on your activity:

• Commercial License: For trading and retail
  
• Professional License: For consulting, services, and freelancers
  
• Industrial License: For manufacturing and factories
  
• Tourism License: For travel, events, or hospitality
  

Each license is issued by the Dubai Department of Economy & Tourism (DET).

What are the benefits of starting a business in Dubai mainland?

• Operate anywhere in the UAE and internationally
  
• Unlimited visa quota (based on office space)
  
• Eligibility for government contracts
  
• Flexibility in business activities
  
• 100% ownership for many sectors
  
• Better access to local and international clients
  

Is the Dubai mainland good for small businesses?

Absolutely. Mainland Dubai offers flexibility, scalability, and access to a broader market. It’s ideal for small businesses that want to sell products or services within the UAE. Shared offices and affordable license packages now make it more accessible for startups than ever before.

Conclusion:

If you’re an entrepreneur looking to tap into a fast-growing, tax-friendly, and globally connected market, Dubai should be at the top of your list. With its zero personal income tax, expanding network of free zones, and progressive government policies, Dubai continues to rank among the best cities in the world for business setup.

Whether you’re launching a tech startup, opening a retail store, or building an international trading company, Dubai offers the infrastructure, investor confidence, and regulatory clarity to support your vision. Plus, reforms like 100% foreign ownership in most sectors and the 10-year Golden Visa for investors have made business setup more accessible than ever.

The best part? You don’t have to do it alone. With expert Dubai business setup consultants, you can navigate the entire process—licensing, visas, banking, and compliance—without hassle. Many firms even offer end-to-end packages tailored to your budget and industry.

“Success is where preparation and opportunity meet. In Dubai, the opportunity is already waiting.”