How to Start a Business in Dubai: A Complete Step-by-Step Guide

7 Mar 2024

By Hitesh Bagmar

Why Start a Business in Dubai?

Dubai has rapidly evolved into one of the most business-friendly cities in the world—and for good reason. With its strategic location between Europe, Asia, and Africa, it serves as a global gateway for entrepreneurs and corporations alike. Starting a business in Dubai gives you direct access to a market of over 2 billion people within a 4-hour flight radius. The city’s infrastructure is world-class. From smart government services to tech-enabled logistics and transportation, Dubai is engineered for efficiency. Setting up a company here is streamlined and often fully digital. You can register a company, open a bank account, and even apply for visas—all online.

Taxation is one of the biggest advantages. Dubai offers 0% personal income tax, and while corporate tax has been introduced at 9%, it’s still one of the lowest globally. Many businesses also qualify for free zone exemptions depending on their structure and activity. Moreover, government-led initiatives like Dubai Vision 2030 and Operation 300bn are pouring billions into innovation, tourism, real estate, AI, healthcare, and fintech. These aren’t just plans—they’re growth blueprints creating daily opportunities for investors and founders.

Can Foreigners Start a Business in Dubai?

Yes—foreigners can absolutely start a business in Dubai, and the process has become even more accessible in recent years. The UAE government has made strategic legal reforms to encourage international entrepreneurs to invest and operate freely. One of the biggest milestones? The 100% foreign ownership rule, which now applies to most business activities in both mainland and free zones. Previously, starting a mainland company meant needing a local Emirati sponsor holding 51% of shares. But as of recent reforms, this is no longer mandatory for many sectors. You can now fully own your company without giving away equity—especially in activities like consultancy, e-commerce, marketing, tech services, and more.

Dubai also offers long-term visas for business owners, including investor visas and even Golden Visas for high-net-worth individuals. These allow you to sponsor your family, rent or buy property, and even enjoy access to world-class healthcare and education. Free zones are another great option for foreigners. These jurisdictions offer complete ownership, profit repatriation, and streamlined business registration. Plus, most free zones include visa quotas and workspaces in their packages. From Indian tech founders to British consultants, Dubai’s expat-friendly policies have made it a top global destination for business. Whether you’re a solopreneur or a growing firm, Dubai gives you the license—literally and figuratively—to thrive.

Types of Business Entities in Dubai

Choosing the right business structure is one of the first and most important steps when starting a business in Dubai. The legal structure you choose impacts everything—your ownership rights, the licenses you can apply for, your tax obligations, and even your ability to open bank accounts or sponsor employees.

1. Sole Proprietorship

Ideal for a single individual offering professional services. It’s simple to form, but the owner is personally liable for debts and obligations. Suitable for freelancers, consultants, or small service providers.

2. Limited Liability Company (LLC)

The most popular structure in the mainland. It allows for 2 to 50 shareholders, and liability is limited to the capital invested. Post-2021 reforms allow 100% foreign ownership in most sectors. It provides flexibility for trade, contracting, retail, and other activities.

3. Civil Company

Mostly for professionals like lawyers, doctors, or accountants. It requires partners to hold relevant qualifications, and liability is shared.

4. Branch of a Foreign Company

Perfect for businesses that already exist outside the UAE and want to establish a local presence without forming a new legal entity. It allows 100% ownership but must operate under the same name and scope as the parent company.

5. Free Zone Company (FZC/FZE)

Set up within one of Dubai’s 30+ free zones. Offers full ownership, tax exemptions, and fast licensing. Ideal for e-commerce, media, fintech, logistics, and startups. Comes with office/warehouse solutions and visa eligibility.

6. Offshore Company

Mainly for holding assets, international trading, or wealth structuring. Cannot trade within the UAE but offers privacy, 0% tax, and full ownership.

 Comparison Table

Choose the Right Jurisdiction: Mainland vs Free Zone vs Offshore

When starting a business in Dubai, choosing the right jurisdiction is like choosing the right soil for your plant—it defines how your business will grow. Dubai offers three main jurisdictions: Mainland, Free Zone, and Offshore. Each comes with its own rules, benefits, and limitations.

1. Mainland

Mainland companies are licensed by the Dubai Department of Economy & Tourism (DET) and can operate anywhere in the UAE and internationally. This setup is ideal for businesses that want to trade directly with the UAE market or take on government contracts.

Thanks to new reforms, many mainland businesses now qualify for 100% foreign ownership. You’ll need an Ejari (office lease) and can apply for unlimited visas based on office size.

2. Free Zone

Free zones are special economic areas governed by their own authorities. Dubai has over 30 free zones, including IFZA, DMCC, Meydan, DSO, RAKEZ, and SHAMS, each catering to different industries.

Free zone companies enjoy 100% foreign ownership, tax benefits, and customized packages that often include office space, visa quotas, and bank account assistance. However, free zone companies cannot trade directly with the UAE mainland without appointing a distributor or opening a branch.

3. Offshore

Offshore companies are non-resident entities, mainly used for international trading, asset protection, or holding companies. You can’t lease office space or apply for visas under an offshore company. They’re governed by jurisdictions like JAFZA Offshore, RAK ICC, or Ajman Offshore, and come with 0% taxes, strict privacy, and low compliance requirements. But remember: offshore companies can’t conduct business within the UAE.

 Mainland vs Free Zone vs Offshore – At a Glance

Each jurisdiction has its advantages. Your decision should be based on your business activity, budget, location preference, and target market.

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

Starting a business in Dubai might seem complex, but it’s actually quite systematic—if you follow the right steps. Here’s a complete breakdown of how to go from idea to license, whether you’re setting up in the mainland or a free zone.

1. Decide on a Business Activity

Your chosen activity defines your license type, legal structure, and jurisdiction options. Dubai offers over 2,000+ licensed business activities, ranging from consulting and trading to real estate and transport.

You must choose an activity that is:

• Approved by the Department of Economy & Tourism (DET) for mainland
  
• Listed by the relevant Free Zone Authority (e.g., IFZA, DMCC, SHAMS)
  

Some activities (e.g., medical, legal, food services) need external approvals from authorities like DHA, KHDA, or Civil Defense.

Pro Tip: Don’t just go with a generic activity. Pick one aligned with your future scalability and expansion plans.

2. Choose a Business Name

Dubai has strict naming conventions. Your business name must be:

• Unique and not previously registered
  
• Free of religious, political, or offensive terms
  
• Reflective of the activity (e.g., no “consulting” if you’re opening a restaurant)
  
• For personal brands, full name is required (e.g., John Smith Technical Services)
  

Free zone and mainland both have separate name availability systems, so always verify availability in your chosen jurisdiction.

3. Select the Legal Structure

Legal structure impacts ownership, taxation, and documentation. Choose between:

• LLC (ideal for most entrepreneurs)
  
• Sole Establishment (for individuals offering professional services)
  
• Civil Company (for professionals in mainland)
  
• Free Zone Establishment (FZE) or Free Zone Company (FZC) (for free zone)
  
• Branch of Foreign Company (for international firms entering UAE)
  

Note: Free zones and offshore companies have their own structure types and shareholder requirements.

4. Apply for Initial Approval

Initial approval confirms that the UAE government has no objection to your business. Required documents:

• Passport copy of shareholders
  
• Visa or entry stamp
  
• Business activity details
  
• Name reservation approval
  

For free zones, most approvals happen internally. For the mainland, DET and external bodies may need to approve.

Turnaround time: 1–3 working days.

5. Lease Office Space or Co-working Facility

In the mainland, you need a physical office with Ejari (tenancy contract). In free zones, you can opt for:

• Flexi-desks (shared workspace)
  
• Smart offices
  
• Warehouses or showrooms
  

Most free zones include office solutions in their packages. Choose space based on:

• Visa requirements (office size determines visa quota)
  
• Budget
  
• Type of business (retail, industrial, service-based)
  

6. Get Your Business License

Once your documents are approved, the final step is to obtain your trade license. Types of licenses:

• Commercial – for trading and general businesses
  
• Professional – for consultants, designers, freelancers
  
• Industrial – for manufacturing or industrial activities
  
• Tourism – for travel-related businesses
  

License validity is 1 year, renewable annually. You’ll receive a soft copy and optionally, a hard copy.

7. Open a Corporate Bank Account

Once licensed, you can open a business bank account. Popular banks include:

• Emirates NBD
  
• Mashreq
  
• RAKBANK
  
• FAB
  
• WIO Bank (great for startups)
  

Each bank has different KYC requirements. Most ask for:

• Trade license
  
• MoA / Shareholder details
  
• Office lease
  
• Personal profile of the owner
  

Approval time: 7 to 15 working days depending on the bank and activity.

8. Apply for Visas

You can now apply for:

• Investor/partner visa (valid 2–10 years)
  
• Employee visas
  
• Dependent visas (spouse, children)
  

Process includes:

1. Entry Permit
   
2. Medical Test
   
3. Emirates ID application
   
4. Visa stamping
   

Visa quotas vary based on jurisdiction and office space.

9. Register for VAT and Corporate Tax

• VAT: Mandatory if your turnover exceeds AED 375,000/year. Voluntary at AED 187,500.
  
• Corporate Tax: From June 2023, UAE imposes a 9% corporate tax on net profits above AED 375,000.
  

You’ll need to:

• Register on EmaraTax
  
• Maintain accounting books
  
• File quarterly (VAT) and annually (Corporate Tax)
  

10. Launch & Start Operations

With your license, visa, and bank account in place, you’re ready to go!

• Setup your website and branding
  
• Hire staff
  
• Run your ads or launch your store
  
• Begin operations legally and confidently

Need help managing? Business setup companies like Vista offer ongoing PRO, compliance, and renewal services.

How Much Does It Cost to Start a Business in Dubai?

The cost of starting a business in Dubai depends on several factors—your chosen jurisdiction, business activity, office space, number of visas, and whether you’re going to the mainland, free zone, or offshore. There’s no one-size-fits-all, but here’s a detailed breakdown to help you estimate accurately.

1. Initial Setup Costs (License + Registration)

2. Visa Costs

Each visa (investor, partner, employee) involves:

• Entry Permit: AED 1,000 – 1,200
  
• Medical Test: AED 300 – 700
  
• Emirates ID: AED 370 – 1,070
  
• Visa Stamping: AED 500 – 1,000
  
• PRO or Processing Fees: AED 500 – 1,000
  

Total per visa: AED 3,000 – AED 5,000
Visa quotas depend on office size and jurisdiction.

3. Bank Account Setup Fees (Optional)

Most banks don’t charge a fee to open an account, but some require:

• Minimum balance: AED 10,000 – 50,000
  
• Monthly maintenance fee: If balance drops below the limit
  

Banks like WIO, RAKBANK, and Mashreq NEOBIZ offer startup-friendly options with low minimum balance requirements.

4. Optional Services

Sample Budget: Starting a Business in Dubai

Best Businesses to Start in Dubai in 2025

Dubai isn’t just a luxury hub or tourist hotspot—it’s a thriving business ecosystem offering opportunities across diverse industries. The government’s long-term plans like UAE Vision 2031, the Dubai Economic Agenda (D33), and aggressive investments in tech, logistics, and sustainability have made it fertile ground for new ventures. Here’s what’s trending this year:

1. eCommerce & Dropshipping

With Dubai’s young, tech-savvy population and high internet penetration, the eCommerce market is projected to cross AED 27 billion by 2025. A free zone like IFZA or Meydan is ideal for starting an online store or dropshipping business.

Why it works:

• Low startup cost
  
• No inventory required
  
• Global reach with Dubai as your fulfillment base
  

2. Real Estate Brokerage

Dubai’s property market has hit record highs with over AED 160 billion in sales in Q1 2025 alone. Whether off-plan or resale, a real estate license can help you capitalize on growing demand.

Tip: Opt for a mainland license if you want to sell or lease directly within Dubai without limitations.

3. Digital Marketing Agency

Every business today needs visibility online. If you have skills in SEO, social media, ads, or content creation, this is your time. Agencies are in high demand, especially in niche sectors like hospitality, healthcare, and real estate.

Bonus: This business can be started solo and scaled with freelancers or a small team.

4. Tourism & Travel

With Dubai attracting 20M+ visitors a year, there’s no shortage of tourism opportunities—desert safaris, yacht rentals, cultural tours, or luxury travel concierge services.

Start with a tourism license under the DET or in zones like RAKEZ or Fujairah with tourism add-ons.

5. Food & Beverage (Cloud Kitchens)

Don’t want to run a full dine-in restaurant? Cloud kitchens (delivery-only brands) are booming. With aggregators like Talabat, Zomato, and Deliveroo, you can start small and serve citywide.

Cost-effective and scalable with shared kitchen spaces available in Al Quoz or DIP.

6. Logistics & Courier Services

With the surge in online shopping and Dubai being a transit hub, logistics is a high-demand sector. A mainland license allows you to operate citywide and partner with eCommerce players.

7. Health & Wellness (Gyms, Nutrition, Therapy)

Dubai’s wellness industry is thriving—from boutique fitness studios and healthy cafes to therapy clinics and aesthetic clinics.

Target zones: Dubai Healthcare City (DHCC) or mainland for full operational flexibility.

✅ Low-Cost Business Ideas Under AED 50,000

• Social media management
  
• Freelance graphic design or copywriting
  
• Home-based bakery
  
• Fitness coaching (with certification)
  
• Event planning services
  
• Home cleaning services
  
• Online tutoring/consulting
  
• Personal shopping and styling
  

Legal and Compliance Requirements for Business Setup in Dubai

While Dubai makes it easy to launch a business, staying compliant with legal frameworks is essential. Non-compliance can lead to penalties, license cancellations, or even business shutdowns. Here’s what you need to know to keep your business above board from day one.

1. Memorandum of Association (MoA) and Local Service Agent (LSA)

• MoA outlines your company’s structure, shareholding, and scope of activities. It’s mandatory for most business types, especially LLCs.
  
• For professional licenses in the mainland (e.g., consultancy), a Local Service Agent (LSA) may be required—an Emirati individual who assists with government paperwork but holds no equity.
  

Both documents must be notarized by a UAE public notary or attested via free zone authorities.

2. External Government Approvals

Depending on your business activity, you may need clearances from:

• Dubai Municipality – for health, safety, and food-related approvals
  
• Department of Tourism & Commerce Marketing (DTCM) – for tourism licenses
  
• Civil Defense – for fire and safety inspections
  
• KHDA/DHA – for education or healthcare-related ventures
  

Make sure to verify requirements during the initial approval stage.

3. Labour & Immigration Compliance

Every company must be registered with:

• Ministry of Human Resources & Emiratisation (MOHRE)
  
• General Directorate of Residency and Foreigners Affairs (GDRFA)
  

You’ll need:

• A Labour Establishment Card
  
• Work Permits for employees
  
• Registration in WPS (Wage Protection System) to ensure salary compliance
  

4. Anti-Money Laundering (AML) and Economic Substance Regulations (ESR)

The UAE is cracking down on financial crime with strict AML laws.

Your company may need to:

• Register Ultimate Beneficial Owner (UBO) details
  
• File ESR notifications and reports annually (especially for holding companies, consulting, and IP-based businesses)
  
• Maintain transparent books of accounts
  

Non-compliance can attract heavy fines starting from AED 15,000.

5. Corporate Tax and VAT

• From June 2023, businesses exceeding AED 375,000 in annual profit must file for 9% corporate tax.
  
• VAT registration is mandatory if your turnover exceeds AED 375,000/year (voluntary at AED 187,500).
  
• You must:
  
  • Maintain proper accounting records
    
  • File quarterly VAT returns via EmaraTax
    
  • Keep invoices, receipts, and supporting documents for at least 5 years
    

6. License Renewal & Inspections

• Trade licenses must be renewed annually. Most free zones offer renewal reminders and packages.
  
• Mainland businesses must renew Ejari, insurance, and clear government dues before license renewal.
  
• Routine inspections by DET, Dubai Municipality, or Civil Defense are common.
  

✅ Tip: Partnering with a business setup consultancy like Vista ensures you don’t miss any steps, deadlines, or filings. They also offer PRO services, corporate tax assistance, and renewal packages for peace of mind.

FAQs About Starting a Business in Dubai

How much does it cost to start a business in Dubai?

Costs vary by jurisdiction and business type, but you can expect anywhere from AED 12,500 to AED 75,000. Free zone packages are the most affordable, while mainland setups with physical offices and multiple visas cost more. Additional costs may include visas, PRO services, and accounting.

Can I open a business in Dubai as a foreigner?

Yes! Foreigners can fully own businesses in Dubai, especially in free zones and most mainland sectors after recent reforms. You don’t need a local sponsor for most activities, and you can also get residency visas for yourself and your family through your business.

How can I start a small business in Dubai?

Pick a business activity, choose a free zone or mainland license, and apply for registration. Small businesses often choose free zones due to lower costs and easy visa options. Popular ideas include consulting, eCommerce, digital marketing, and freelance services.

Which business is best to start in Dubai?

It depends on your skills and capital. Trending options in 2025 include real estate brokerage, digital marketing, tourism, eCommerce, and cloud kitchens. If your goal is quick ROI, service-based businesses with low overhead are a smart choice.

Can you own 100% business in Dubai?

Yes, 100% foreign ownership is allowed in all free zones and for most activities in the mainland after the 2021 legal reforms. Only a few strategic sectors (like oil, defense, or telecom) may still require local participation.

What business can I start with AED 50,000 in Dubai?

You can start a freelance business, online store, digital agency, or home-based catering. Free zones like IFZA and SHAMS offer all-inclusive packages under AED 20,000, leaving you enough to handle visa costs and basic marketing.

How to get Dubai citizenship?

Dubai doesn’t offer citizenship to business owners, but you can get a long-term Golden Visa (5 or 10 years) if you invest significantly in real estate or business, or if you’re an entrepreneur or executive in key sectors.

Can an Indian start a business in Dubai?

Absolutely. Indians are among the top foreign investors in Dubai. You can set up your business through a free zone or mainland license and apply for a UAE residence visa. Many Indian businesses operate in real estate, IT, food, and trading.

What is the cheapest business to start in Dubai?

Freelancing or consultancy under a virtual license or flexi-desk free zone setup is the cheapest. These cost as low as AED 12,500, and don’t require physical office space or staff. Great for online businesses or solo entrepreneurs.

Final Thoughts: Is Dubai Right for Your Business Idea?

Dubai isn’t just an attractive business destination—it’s a launchpad for global growth. With its zero personal income tax, business-friendly policies, world-class infrastructure, and strategic location, the city makes it incredibly appealing for entrepreneurs from all over the world. Whether you’re a freelancer, a startup founder, or an established business owner, Dubai has a setup model tailored for your goals.

That said, choosing the right jurisdiction, understanding your activity scope, and estimating your costs upfront are crucial steps. While free zones are ideal for startups and online businesses, mainland licenses are more suitable for companies planning to trade directly in the UAE. And if you’re just looking to manage international assets, offshore companies offer a great low-cost, low-compliance route.