Everything you need to know about company formation in the UAE
Why Choose Dubai to Start Your Business?
Dubai has rapidly become one of the world’s most attractive business hubs. With no personal income tax, modern infrastructure, and strategic global location, thousands of entrepreneurs and investors are choosing the UAE to launch new ventures.
Whether you're a startup founder or an established business owner, understanding Dubai’s setup process is crucial for success.
Step 1: Choose the Right Business Activity
Before anything else, you must define your business activity clearly. Are you opening a consulting firm, a trading company, or an eCommerce business? Each activity falls under specific licensing rules issued by the Department of Economic Development (DED).
- Commercial License – for trading businesses
- Professional License – for services like IT, consulting, and marketing
- Industrial License – for manufacturing or industrial work
Step 2: Select Free Zone, Mainland, or Offshore
UAE offers three business jurisdictions:
- Mainland: Operate freely within UAE and outside. Requires local service agent (for some types).
- Free Zone: 100% foreign ownership, quick setup, and tax benefits. However, limited local trade unless a distributor is appointed.
- Offshore: Best for asset protection and international trade. No physical office required.
Step 3: Register the Business Name
Your company’s name must follow UAE naming conventions. Avoid religious or political terms. You’ll need to submit three name options to the relevant authority for approval.
Step 4: Apply for Initial Approval
Once the name and structure are approved, you need an Initial Approval Certificate from the DED (for mainland) or the relevant free zone authority.
Step 5: Draft the MOA and LSA Agreement
The Memorandum of Association (MOA) outlines the company’s ownership and roles. For mainland companies, a Local Service Agent (LSA) agreement may be required if you’re in professional services.
Step 6: Choose Office Space and Sign Tenancy
Physical office space is mandatory in most jurisdictions. You’ll need an Ejari certificate (tenancy registration) to complete your trade license application.
Step 7: Get Your Business License
This is the final and most important step. Submit all documents to the relevant authority. Once approved, you’ll receive your trade license and can start operations legally in the UAE.
Step 8: Open a Business Bank Account
With your license in hand, open a corporate bank account with a local or international bank in Dubai. Some popular banks include Emirates NBD, ADCB, and HSBC.
FAQs on Starting a Business in Dubai
How much does it cost to start a company in Dubai?
It depends on the license type and jurisdiction. On average, costs range between AED 12,000 to AED 35,000.
Can a foreigner own 100% of a business in Dubai?
Yes, especially in Free Zones and certain Mainland sectors approved under the new FDI laws.
Is a physical office required?
Yes, in most cases. However, some Free Zones offer Flexi-desk options.