How to Start a Business in Dubai: A complete guide

Looking to establish a business abroad? Look no further than Dubai. As one of the UAE’s most populous and advanced cities, Dubai offers a thriving economy, cutting-edge infrastructure, and many advantages for entrepreneurs. More than 19,000 new companies became members of Dubai Chamber of Commerce during Q1 2024, representing a YoY growth of 17.6%. However, if you want to start a business in Dubai, you need careful planning, thorough research, meticulous documentation, budgeting, and decision-making, among other things. This process can be tedious and time-consuming, involving multiple steps and critical considerations.

But you need not worry! This blog will provide all the essential steps and insights you need to start a company or business in Dubai successfully.

Benefits of Starting a Business in Dubai

Dubai’s welcoming atmosphere and strategic location make it a prime business destination. Benefits of starting a business in Dubai include:

1. Tax Benefits – Personal income tax is not imposed, and corporate tax exemptions are available in Free Zones. Double taxation agreements are in place, reducing tax burdens.
2. Vibrant Economy – A diversified and growing economy is supported, with strong sectors in trade, tourism, and technology.
3. Thriving Business Communities – Networking opportunities are provided through Free Zones and business councils, attracting global entrepreneurs.
4. World-Class Infrastructure – Advanced transportation, telecommunications, and smart city initiatives are maintained for seamless operations.
5. Strategic Location for Trade – Proximity to major global markets is ensured, with world-class ports and airports facilitating trade.
6. Gateway to Global Markets – Unrestricted trade access is offered through Free Zones, with no foreign exchange controls.
7. Government Support – Business-friendly initiatives, financial grants, and streamlined registration processes are implemented.
8. Business-Friendly Policies – 100% foreign ownership, flexible visa options, and minimal trade restrictions are permitted, ensuring ease of business setup.

It is worth noting that the International Monetary Fund (IMF) has forecasted a stronger growth trajectory for the UAE economy next year compared to 2023 and 2024. This projected higher growth makes it even more attractive for entrepreneurs to launch new businesses in Dubai.

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

Setting up a business in Dubai does not need to be difficult, provided you are well-informed about the intricacies involved.

To start a company or business in Dubai, follow these steps:

1. Choose your business activity:

Start by selecting the business activities you wish to pursue. The nature of these activities will determine the type of license you will require. UAE trade licenses are of 6 types: occupational, tourism, industrial, commercial, agricultural, and professional. Dubai offers a range of sectors to consider, including finance, education, retail, hospitality, and media.

2. Choose the right economic zone:

The Emirates offers three jurisdictions: mainland, free zone and offshore. Each economic zone has its own set of laws and regulations regarding business setup and permitted activities. The type of jurisdiction that you choose will depend on your business needs, activities chosen, license needed, etc.

Below is the overview of the different zones offered by Dubai:

• Mainland: Mainland, also known as onshore, is the part of Dubai outside the free zones and is regulated by the Department of Economic Development (DED). Businesses operating in mainland Dubai have the freedom to work in various sectors. They can interact with other companies and individuals within Dubai, UAE, and globally.

• Free Zone: Free zones in Dubai are special economic areas with their own regulations. They offer numerous benefits and tax exemptions thus attracting foreign direct investment (FDI). Dubai boasts over 28 free zones, with over 200,000 companies already established. 

• Offshore: Offshore companies are legal entities established in Dubai that can conduct business activities outside Dubai but not inside it. Opting for a UAE offshore company can be advantageous for accessing global markets.  

3. Decide on your company structure:

Legal compliance, effective taxes, liability protection, operational flexibility, and general business performance depend on a strong corporate structure. The structure you choose for your company will depend on your business needs. The UAE offers several business structures under various economic zones, some of them including:

Mainland:

• Sole Proprietorship,
• GCC company branch
• Limited Liability Company (LLC), and
• Civil company(partnership)
• Branch of an international or local company
• Holding company
• Public Joint Stock Company (PJSC)
• Private Joint Stock Company

Free zone:

• Free Zone Limited Liability Company (FZ LLC)
• Free Zone Company (FZ Co.)
• Free zone establishment (FZE)
• Branch of an international or local company

Offshore:

• Offshore Limited Liability Company (OLLC)

4. Finalize and register your trade name:

Choose an appropriate trade name for your business in Dubai. The UAE has strict conventions and regulations that you need to follow. To get the necessary approvals from the DED or specific authorities, make sure your name:

• does not violate the public morals or public order of the nation
• is followed by the legal form of the company
• has not been previously registered
• is compatible and relevant to the chosen activity.
• does not contain names of any religion or governing authority, nor names or logos of any external bodies.

5. Obtain initial approval (NOC)for business:

Securing initial approval from DED means that the UAE government has no objections to you starting a business in the country. This approval lets you proceed with the business setup process and get the license. However, it doesn’t permit you actually to run the business or carry out business activities. There are a few more steps that you need to take.

6. Prepare LSA or MOA:

If your company is a civil, limited liability, public shareholding, or private company, then a Memorandum of Association (MOA) is required to start a company or business in Dubai. As you progress through the application process, it’s important to ensure that essential documents like the MOA and AOA are duly notarised. A local service agent agreement (LSA) may also be required for sole proprietorship.

7. Find a local agent (if required):

Whether you require a local sponsor in Dubai depends on your business’s nature and the industry you wish to enter. In Dubai’s mainland, certain sectors mandate a local sponsor, while others permit full foreign ownership. A reliable and trustworthy local sponsor is essential to start a business in Dubai successfully. At DUBIZ, we specialise in facilitating the process of finding a suitable local sponsor for your venture.

8. Choose a location for your office:

 Considering the needs of your business, you have several options for office space in Dubai, ranging from flexi desks to shared workplaces. Once you have found the right space, register your tenancy contract, known as “Ejari,” through the Dubai Land Department’s Ejari portal. Ejari is an agreement between you and the real estate agency for the office unit or shared workspace you plan to lease. This agreement is crucial for company registration. Alternatively, opting for a virtual office is also a viable option.

9. Apply for additional government approvals (if needed):

In certain instances, obtaining additional approvals from relevant government entities is necessary for specific business operations in Dubai. For example, legal activities and consultations typically require approval from the Ministry of Justice, while health-related ventures may need clearance from local health departments.

10. Apply for the business license:

Finally, submit the required documents and pay the necessary fees to obtain your trade license. The documents required for business license in Dubai typically includes:

• License application form
• Initial approval receipt and all the previously submitted documents
• Copy of the lease contract duly attested by the Real Estate Regulatory Agency (RERA) in Dubai
• Duly attested memorandum of association (for all types of companies)
• Approvals from other government entities concerned, if required
• Duly attested service agent contract (for civil establishments and companies 100% owned by non-GCC nationals) involving a local service agent.
• Business plan
• Passport copies of shareholders and the appointed manager
• Financial statements
• NOC from the local sponsor or partner (if applicable)
• Any additional documents requested by the DED

After successful application, you can collect the business license from the economic department’s service centres or through its website.

Please note that additional documents may be required depending on your jurisdiction.

11. Open a corporate bank account:

Once you have secured your license and documents back, it’s time to open a corporate bank account. Dubai hosts a huge number of banks, both domestic and international. You will need to provide your business license, shareholders’ passport copies, and other documents required by the bank.

12. Apply for a visa:

The final step involves immigration and visa processing. If you or your employees require visas to live and work in the UAE, initiate the visa application process. This often involves medical testing and the submission of passport copies, photos, and other relevant documents.

It should be noted that the process for setting up a business in Dubai can vary depending on the specific requirements of the business activity and the jurisdiction (mainland or free zone). To seek further guidance, please contact us at DUBIZ.

Costs involved in Setting up a Business in Dubai

If you want to start a business in Dubai then you should familiarise yourself with starting a business in Dubai. The cost of starting a new business in Dubai varies depending on which type of UAE business jurisdiction it falls under and the nature of its operations:

• Mainland: AED 11,000* (without a visa) and AED 24,000* (with a residence visa)
• Free zone: AED 6,000* to AED 17,900*
• Offshore: around AED 15,500*.

Setting up your business involves various costs, such as license fees, registration fees, visa application charges, office space expenses, share capital, UAE visa renewal charges, DED fees, typing charges, and more.

Contact our experts at DUBIZ for a detailed breakdown of costs tailored to your needs.

Start your Business in Dubai with DUBIZ!

Dubai is the land of dreams. However, the process required to start a business in Dubai can feel overwhelming, given the numerous formalities and steps involved. That’s where DUBIZ comes in as your trusted partner. Our company formation experts walk you through each step. From selecting an office space to obtaining a trade license, we streamline the entire process, allowing you to concentrate on the success of your business.

Let’s launch your business together!

Contact DUBIZ today at +971563695485 or WhatsApp us at +971563695485. You can also drop an email at info@dubiz.co for any inquiries.

Frequently Asked Questions (FAQs)

Q. Is Dubai startup-friendly?

Dubai is extremely startup-friendly courtesy of its business-friendly environment, tax incentives, and government support. More than 19,000 new companies became members of Dubai Chamber of Commerce during Q1 2024, representing YoY growth of 17.6%.

Q. What are the most popular businesses in Dubai?

The most popular businesses in Dubai include transportation and logistics, healthcare and medical services, commerce, real estate, wholesale and retail trade, tourism and hospitality, fintech and IT solutions.

Q. How long does it take to start a  business in Dubai?

Starting a new business in Dubai usually takes 4-5 working days. However, it depends upon certain variables, such as the type of company formation, license and documentation needed, etc.

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

Starting a business in Dubai costs around AED 11,000 to AED 24,000 for mainland registration, depending on whether a residence visa is included. Free zone setup ranges from AED 6,000 to AED 17,900, while offshore registration typically costs around AED 15,500.

Q. Can I own 100% of a business in Dubai?

Yes, you can own 100% of your business in free zones and through the DED license framework. Certain activities on the mainland also allow 100% ownership.

Q. How to start a business in Dubai free zone?

 To start a business in Dubai free zone, you can follow these simple steps:

• Choose your business activity
• Determine your business structure
• Select your trade name
• Apply for a business license
• Choose an office space
• Get initial approvals, register your business and collect your license