At Dubiz, we understand the complexities & challenges of establishing a business in UAE’s evolving landscape. Our suite of expert business setup services is specially designed to support your venture at every stage, from inception to expansion.

start a business in Dubai as a foreigner
  • By afdubiz
  • June 28, 2024

UAE, especially Dubai, stands as one of the world’s leading spots for entrepreneurs to launch their ventures. According to Financial Times Ltd.’s ‘fDi Markets’ data, Dubai ranked first globally in attracting new greenfield foreign direct investment (FDI) projects in 2023, marking the third successive year it has achieved this top ranking. Starting a business in Dubai as a foreigner seems highly attractive due its booming and diverse economy along with availability of skilled labour, sociopolitical stability, generous incentives and various other benefits that city offers.  

If you are a foreigner looking to start a business abroad, look no further than Dubai, UAE. This guide will inform you about the perks of starting a business in UAE, how to start a business in Dubai as a foreigner, its requirements, and associated costs. 

Is it possible to start a business in Dubai as a foreigner? 

Definitely! You can start a business in Dubai as a foreigner. The UAE warmly welcomes foreign investors and business owners. A significant portion of its population consists of expatriates who have settled here. Also, the country boasts numerous experts in company formation and setup agents who assist foreign entrepreneurs in the UAE in navigating the processes of obtaining licenses and visas and successfully setting up new businesses. 

Benefits of starting a business in the UAE: 

Establishing a business in Dubai and rest of the UAE is a dream for many aspiring entrepreneurs. It offers numerous benefits to entrepreneurs, including: 

  • Flourishing economy: The UAE boasts a robust and stable economy with diverse opportunities to explore. 
  • Countless business opportunities: There are over 2,000 business activities to choose from in the UAE that belong to various industries and sectors. 
  • Support for female entrepreneurs: The UAE has seen a rise in support groups, advisories, and workshops for female entrepreneurs. Therefore, fostering an inclusive and diverse ecosystem. 
  • Strategic location: As UAE is positioned between Asia and Europe, it provides easy access to international markets and acts as a global trade hub. 
  • Skilled workforce: The UAE is home to one of the world’s most skilled and multicultural populations. Businesses can have access to talented labour who bring skills from diverse fields. 
  • Government support: The UAE offers investment incentives, tax benefits, favourable customs regulations, and other startup-friendly policies for foreign businesses. 
  • State-of-the-art infrastructure: The country boasts excellent energy, telecommunication, and overall infrastructure. 
  • Strong financial system: The UAE maintains a robust and secure financial system. The system adheres to international standards of transparency, efficiency, and security. 
  • Healthy international relations: With memberships in the United Nations and Arab League and diplomatic relations with over 60 countries, the UAE offers a stable and globally connected business environment. 
  • Increased foreign direct investment (FDI): Over the past decade, the UAE has experienced a 116% increase in foreign direct investment. It stands as a top investment destination globally, attracting foreign entrepreneurs from various parts of the world. 

Three main jurisdictions in the UAE for businesses: 

The UAE offers flexibility by allowing non-residents to start businesses in three distinct jurisdictions: 

Mainland (Onshore):

Mainland refers to areas outside the free zones in the UAE and is regulated by the Department of Economic Development (DED) of the respective emirate. Businesses operating in mainland enjoy the flexibility to operate across various sectors. They can engage with other companies and individuals in UAE, and globally. 

Free zone (Free trade zone):

Free zones are specialized economic zones with their own regulatory authorities, offering businesses operating within them favourable and relaxed regulations. The UAE hosts more than 40 free zones across its seven emirates, each tailored to specific industries, providing benefits such as 100% foreign ownership, tax exemptions etc. Dubai hosts more than 30 free zones. 

Offshore:

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

Let DUBIZ guide you in selecting the ideal location for your business in Dubai. 

Types of business licenses for foreigners in UAE: 

To conduct business legally in the UAE, obtaining the right business license is essential.   

Types of trade license in UAE include: 

1. Commercial license:

This license is suitable for businesses involved in trading goods and services, import/export activities, logistics, and real estate. 

2. Industrial license:

Businesses engaged in manufacturing or industrial activities, such as food processing, textile production, metalworking, and appliance manufacturing, require an industrial license. 

3. Professional license:

Professionals offering services based on their education and qualifications, such as consultants, designers, auditors, medical practitioners, security services, and IT services providers, need a professional license.

4. Tourism license:

For businesses operating in the tourism sector, including hotels, tourist camps, guesthouses, travel agencies, and tour operators, a tourism license is required. 

5. Crafts license:

Individuals providing skilled trade services such as plumbing, carpentry, electrical work, and painting need a craftsman license. Companies employing craftsmen must also obtain this license. 

6. Agricultural license:

This license is necessary for businesses involved in agricultural activities such as farming, trading agricultural products, greenhouse installation, and agricultural consultancy. 

In order to start a business in Dubai as a foreigner, you will require an appropriate license depending on your business activity. DUBIZ can assist you in securing the right one! 

Process of starting a business in UAE as a foreigner: 

For starting a business in UAE as a non-resident, it is crucial to familiarize yourself with local practices, rules, laws, and the overall business landscape of the UAE.  

You can follow these simple steps to start a business in Dubai as a foreigner: 

Step 1 – Determine your business activity: 

You should start by determining your business focus and what activities you want to pursue. This initial step is crucial as it sets the direction for obtaining the appropriate license needed to operate legally in the UAE. 

Step 2 – Select the ideal location: 

In Dubai, you can establish your company on the mainland, in a free zone, or offshore. Each zone offers its own set of permitted activities, advantages, and disadvantages. Choose the zone that aligns best with your business goals and activities. 

Step 3 – Choose a legal entity: 

Selecting the right corporate structure based on the economic zone and specific business requirements is essential for starting a business in Dubai. On the mainland, options include sole proprietorship, LLCs, partnerships, and local or international company branches. Free zones offer entities such as limited liability companies (LLCs), free zone establishments, and branch offices. Additionally, you can set up an Offshore Limited Liability Company (OLLC) on an offshore.   

Step 4 – Register your trade name: 

For your business in UAE, you must choose a suitable trade name. It should align with market trends and adhere to UAE guidelines. You must obtain approvals from the DED or relevant authorities. Ensure the name does not violate public morals, includes the legal form (e.g., LLC, FZ LLC), and is unique. Avoid religious references, governmental terms, or logos of external entities in your name. 

Step 5 – Secure initial approval: 

The initial approval from the UAE Government indicates no objections to establishing your entity within the country. This approval allows you to proceed with the next steps. 

Foreign investors need approval from the General Directorate of Residency and Foreigners Affairs (GDRFA) before they can get initial approval. 

Step 6 – Prepare necessary documents: 

Depending on the type of company, you may need to prepare and sign a memorandum of association. This applies to partnerships, limited liability companies, and both private and public joint stock companies. Sole proprietorships may require a local service agent agreement (LSA) as well. 

Step 7 – Find local sponsor (if needed): 

To start a company in Dubai as a foreigner, you may or may not need a local sponsor. It depends on the nature of your business and the industry you plan to enter. In Dubai’s mainland, some sectors require a local sponsor, while others allow for full foreign ownership. 

Step 8 – Secure an office space: 

You may need to rent an office space in the UAE that meets the Department of Economic Development’s requirements and municipal zoning regulations. A lease contract is necessary, and in Dubai, it must be registered through Ejari offices. Alternatively, you can consider using a virtual office. 

Step 9 – Secure additional approvals: 

Certain activities may require obtaining special approvals from government authorities, such as the Ministry of Justice for legal activities, as part of the licensing process. 

Step 10 – Apply for a business license: 

In order to start a business in Dubai as a foreigner, you must secure an appropriate license. Submit the required documents to the Department of Economic Development (DED) or the relevant free zone authorities and pay the necessary fees. Once the application is approved, the license will be issued to you. 

Step 11 – Register your business: 

Before conducting economic activities, membership in the Dubai Chamber of Commerce may be mandatory. This includes chambers such as Abu Dhabi, Dubai, Sharjah, Ajman, Um Al Quwain, Ras Al Khaimah, and Fujairah Chambers of Commerce and Industry for other emirates. 

Step 12 – Open corporate bank account: 

Opening a bank account for your Dubai business is crucial for establishing a solid financial foundation. Once your company is registered and operational, the next important step is to open a business bank account. This account allows you to efficiently track finances and manage day-to-day operations. 

Step 13 – Get your visa: 

Finally, you can apply for visas for yourself, your employees, and your family to legally reside and work in the Emirates. 

By following the steps given above, you can successfully start a business in Dubai as a foreigner. If you need any assistance or have any questions, feel free to reach out to us at DUBIZ. 

Documents required to start a business in Dubai as a foreigner: 

To start a business in the Emirates, careful attention to documentation and paperwork is crucial to prevent delays or cancellations. You will typically need the following documents are required to start a business in Dubai as a foreigner: 

  • Application form 
  • Initial approval and previously submitted documents 
  • NOC from local sponsor or partner (if needed) 
  • Business plan 
  • Passport copies (minimum 6 months validity) of director, manager, and shareholders 
  • Proof of residential addresses of shareholders and business owners 
  • Signatures of appointed director/manager and shareholders 
  • Approvals from other government authorities if required 
  • Duly certified memorandum of association 
  • Duly attested service agent contract (for civil establishments and companies 100% owned by non-GCC nationals) 
  • Copy of lease contract attested by RERA in Dubai 
  • Additional documents requested by DED 

Please contact our experts at DUBIZ to learn about the exact documents you will need to start your business in Dubai. 

Business formation costs in Dubai for an expat: 

The cost of starting a business in Dubai as a non-resident will vary depending on the jurisdiction chosen and your business needs. Typically, costs are as follows: 

  • Free zone company formation: AED 5,699* to AED 40,000* 
  • Mainland company formation: AED 17,900* (Professional license) & AED 24,990* (Commercial license) 
  • Offshore company formation: AED 7,000* to AED 24,000* 

Here are several expenses you may have to incur to start a business in Dubai as a foreigner: 

  • Fees for registration and licensing 
  • Rental costs for office space 
  • Fees for visas 
  • Salaries and benefits for employees 
  • Expenses for marketing and advertising 
  • Fees for legal and accounting services 

For more detailed information on costs, please consult with our experts at DUBIZ. 

Start your business in Dubai with Dubiz! 

There are countless business opportunities in Dubai for foreigners and expats. The government actively supports global entrepreneurs with initiatives aimed at attracting and aiding them. If you are considering starting a business here, you are in the right place. At DUBIZ, we provide tailored company formation services that can help you to successfully start a business in Dubai as a foreigner. From choosing a trade name to obtaining licenses, visas, and registering your company, we guide you through the entire process. 

Partner with us today to kickstart your journey of success in Dubai’s thriving markets. 

Contact us at  +971 562986853 or WhatsApp us at +971 569973630. You can also drop an email at info@dubiz.co for any inquiries.  

FAQs 

1. Can a non-resident start a business in Dubai? 

Yes, you can start a business in Dubai as a foreigner. The government has implemented policies and laws that encourage and facilitate foreigners to establish their ventures here. 

2. What are Dubai free zones? 

A: Dubai free zones are special economic zones with their own governing authorities. They offer multiple benefits to businesses, including 100% ownership and tax incentives. 

3. Is Dubai a good place to start a business? 

Definitely, yes! Dubai is one of the most popular destinations worldwide for businesses. It’s very friendly to startups, offers tax incentives, and receives strong support from the government. 

4. How can I get a Dubai trade license? 

To obtain a suitable Dubai trade license, you can apply with the DED by submitting all the required documents and paying the fees. 

5. Is a business visa necessary to start a business in Dubai? 

Yes, you need to obtain a Dubai business visa to conduct business activities legally in the city.  

6. Can I own 100% of my company in Dubai? 

Yes, in Dubai’s free zones, you can own 100% of your business. Moreover, on the mainland, more than 2,000 commercial and industrial activities no longer require a local sponsor. Thus, allowing complete ownership there. 

7. What business activities are allowed in UAE? 

The UAE provides a diverse range of over 2,000 business activities spanning categories such as education, finance, retail, tourism, trading, consulting, manufacturing, agriculture, and professional services.