Setting Up a Business in Dubai- Step-by-Step Guide

setting up a business in Dubai

Dubai is the ideal place to establish a business if you're looking to do it overseas. Dubai, an established trading hub of the Middle East and North Africa (MENA) region, offers a plethora of advantages to enterprises and companies hoping to prosper, grow, and establish connections with the global market. The real GDP growth rate of Dubai was 7.6% in 2022. The real GDP is expected to expand by 3% in 2023. Nonetheless, the United Arab Emirates (UAE) is regarded as a low-risk country for business, placing 10th out of 153 countries in the GlobalData Country Risk Index, providing a generally stable environment for launching a venture. The procedure of setting up a business in Dubai is not too difficult, especially with the UAE's free zones available.

Economic Zones: Offshore VS Free Zones


Offshore Companies

Offshore businesses can take advantage of many of the same advantages by registering in a free zone. It isn't a replacement for a free zone company, though. A free zone company and an offshore corporation differ mostly in how their businesses are run. Offshore businesses are permitted to conduct business outside of the United Arab Emirates, but not within. Additionally, there are no minimum capital deposits needed to be made before incorporation. 

Free Zones

If you want complete control over your business, you should think about requesting a license and setting up shop in one of Dubai's free zones. The Dubai administration created the idea of a free zone to entice foreign companies to establish operations in the city. Business owners can benefit from complete ownership, 9% corporation taxation (applying to UAE enterprises on profits over AED 375,000), and 0% personal income tax in this special economic area.

However, the inability to conduct direct business with the UAE local market is one of the main drawbacks of running a business in a free zone.

At present, Dubai has more than thirty free zones in operation. Every free zone is typically created around an industry sector and grants licenses to businesses operating inside its boundaries. Here are a few instances:

  • Dubai Multi Commodities Centre (DMCC)
  • Dubai International Financial Centre (DIFC)
  • Dubai Airport Freezone

Types of Licence


In addition to selecting a zone, you must determine the kind of license that is required. Business licenses are issued by the Department of Economic Development (DED), and there are three primary categories for which you can apply: 

1. Commercial licence

Establishing a business in Dubai that entails trade or the purchasing and selling of items is made possible with a Commercial License. Businesses engaged in import and export, sales, logistics, travel and tourism, general retail, and real estate are covered by this licence.

2. Industrial Licence

Businesses involved in manufacturing operations that convert raw materials and resources into finished goods, either manually or automatically, are granted an industrial licence. Paper, metal, and textile manufacturing are among the industries covered by this licence.

3. Professional License

Companies that provide services or are artists or craftsmen are granted a professional license. Applications for this kind of license are frequently made by companies that provide repair, beauty, and medical services.


If you choose to set up in a free zone, no local sponsor is needed. Establishing a corporation with 100% foreign ownership without requiring a UAE person as a partner or sponsor is one of the key advantages of establishing a free zone. 

Company Setup Process for Dubai Free-Zone

Free zones are favoured by international business owners when it comes to business setup in Dubai since they provide:

  • 0% personal tax
  • Low corporate tax rates
  • 100% company ownership
  • 100% repatriation of capital and profits
  • No currency restrictions. 

The following are the steps you must complete to establish your company in the free zone:

  • Identifying Business Activity

When launching a firm, it's critical to ascertain the type of your enterprise initially. There are over 2,100 business activities available to pick from, all falling into different groups within the industrial, commercial, professional, and tourism space. This makes it easy to start a small business in Dubai or a cryptocurrency business in the United Arab Emirates. 

  • Selecting the Jurisdiction

Three distinct economic zones make up the UAE market: Mainland, Free Zone, and Offshore. Jurisdiction is another term for these economic zones. Every jurisdiction has its laws and rules concerning the establishment of businesses. They also address various commercial requirements. However, the criteria and activity of your firm will determine which jurisdiction is best for you.

  • Finalizing the Legal Form and Company Structure

Selecting the legal structure for your business is crucial when launching a venture in the United Arab Emirates. It establishes the guidelines and framework for handling gains and losses as well as how to allocate your assets and resources. During the early phases of planning, choose your firm structure or legal form. This will assist in creating a layout for your business. Before deciding on your company's legal structure, you cannot apply for a business license. The following are some of the company structures or legal forms that you can use to register your business in the United Arab Emirates:

  • Limited liability company (LLC)
  • Local company branch
  • Foreign company branch
  • Holding company 
  • GCC company branch
  • Civil company
  • Free zone company branch
  • Sole Establishment


  • Memorandum of Association

To launch a firm in Dubai, it's critical to comprehend the intricacies of a Memorandum of Association (MoA). Therefore, be sure to consult an expert before creating the MoA. The mandates of the UAE government should guide the drafting of the Memorandum of Agreement. When you establish a firm in Dubai, it should also consider your commercial interests.

  • Choosing the Ideal Free Zone

With more than thirty free zones to select from in Dubai, it usually makes sense to locate your firm near other companies operating in the same industry. Which free zone you choose to establish may depend on the nature of your business.

  • Choosing Business Name

Your company name must comply with UAE naming conventions while selecting a name. Names that contain derogatory language may be interpreted negatively by religious people. It is prohibited to make references to political parties or the Mafia. Should you choose to name your firm after an individual, you will have to provide evidence that they are either an owner or a partner (you cannot use initials or abbreviations).

Picking a name for your company might be difficult. By hiring a professional to assist you in adhering to the rules and obtaining approval for your name, you may save time and effort. 

  • Apply for Initial Approval

Getting the Dubai DED's initial approval is necessary to ensure that launching a business is accepted. You have three options for applying: online, in person, or via a third party (legal company). Depending on the type of your firm, you will need to produce different documents, but these normally include:

  • Licencing and Business Registration Form
  • A copy of the individual’s ID or Passport
  • A copy of the individual’s Visa or residence permit
  • The article of association of the company
  • The project’s feasibility study


  • Opening a Corporate Bank Account

Anyone can open a corporate bank account after being accepted and receiving all required paperwork back. There are numerous local and foreign banks available in the United Arab Emirates. Some of the most notable banks in Dubai include the following:

  • Citibank
  • HSBC
  • Commercial Bank of Dubai
  • Abu Dhabi Commercial Bank


  • Office Location

All firms in Dubai are required to have a physical address. Luckily, finding your new office space will be simple if you establish yourself in a free zone.

  • Final Approval Application

To submit for final approval, you must have all of your paperwork together, including location addresses, and legal information. You might occasionally need to apply to other authorities for licensing approval. When prepared, you must submit:

  • Receipt for the first approval and for every document that was previously submitted
  • The Real Estate Regulatory Agency's (RERA) lease contract
  • a Properly documented service agent contract involving a local service agent in the UAE (for civil enterprises and businesses controlled 100% by non-GCC nationals)
  • Approval from additional relevant governmental bodies

After paying for the licence through one of the several authorised payment methods, your company is prepared to operate. 

In conclusion, in all seven emirates, there are just a few easy processes involved in starting a business in the United Arab Emirates. The Department of Economic Development in the emirate where you intend to open your business is where you can apply in person. 

Furthermore, digital platforms are accessible for obtaining a commercial licence and starting a business online. By submitting an application and providing the required paperwork, a licence can be obtained in a matter of minutes. Investors may also apply through specific firms that provide services for business establishments or legal offices. When a company is established, it usually requires naming the site, describing the type of business, and paying certain fees to obtain a commercial licence. If you are also looking to stay in Dubai for extended periods, then you can consider serviced apartments in Dubai for this purpose. These units are fully furnished and located near major business zones for maximum convenience. 

Read More: Everything about Bur Dubai you need to know

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