Setting Up a Business in Dubai
The complete guide to starting a business in Dubai — free zone, mainland, or freelance. Real costs, step-by-step processes, and everything you need to know about corporate tax, banking, and government requirements.
Why Dubai for Business?
- • 0% personal income tax — your salary is yours to keep
- • 0% corporate tax on profits up to AED 375,000 (9% above this threshold)
- • 0% import/export duty in free zones
- • 100% foreign ownership now available in most business categories
- • 200+ nationalities in Dubai's workforce — talent from everywhere
- • Strategic location — 4-hour flight radius covers 2 billion people across Middle East, Africa, South Asia
- • World-class infrastructure — ports, airports, logistics, banking
- • Stable legal system — common law in DIFC and ADGM courts
Choosing Your Structure: Free Zone vs Mainland vs Offshore
| Factor | Free Zone | Mainland | Offshore |
|---|---|---|---|
| Foreign ownership | 100% | 100% (most sectors) | 100% |
| Trade within UAE | Via distributor only | Direct trading allowed | Not allowed |
| Office requirement | Flexi-desk or physical | Physical office required | No UAE office needed |
| Residency visa | Yes (via free zone) | Yes (via DET) | No |
| Customs duty | 0% within free zone | 5% standard UAE | N/A |
| Corporate tax | 0% (qualifying income) | 9% above AED 375K | Minimal (no UAE activity) |
| Setup cost (typical) | AED 5,750–20,000 | AED 10,000–50,000 | AED 10,000–20,000 |
| Timeline | 3–15 business days | 2–4 weeks | 1–2 weeks |
| Best for | International business, tech, trading | UAE market access, retail, services | Asset holding, IP, investment |
Free Zone Company Setup
Free zones are designated economic areas with their own regulatory authorities, operating independently from Dubai's mainland. They offer 100% foreign ownership, zero customs duty within the zone, and full repatriation of profits — making them the default choice for most foreign entrepreneurs and international businesses.
Top Dubai Free Zones — Costs & Details
| Free Zone | Sector Focus | From | Visas | Notes |
|---|---|---|---|---|
| DMCC (Dubai Multi Commodities Centre) | Commodities, trading, general | AED 11,700/yr | 1–6 per licence | Most awarded free zone globally; 22,000+ companies; JLT location; excellent infrastructure and community |
| IFZA (International Free Zone Authority) | All sectors (general) | AED 11,500/yr | 1–6 per licence | Budget-friendly option; fast setup (3–5 days); popular with SMEs and startups; no share capital required |
| Meydan Free Zone | All sectors; popular for freelancers | AED 5,750/yr | 1 (expandable) | One of the cheapest free zone licences available; great for solopreneurs and freelancers; Nad Al Sheba |
| Dubai Internet City (DIC) | Technology, IT, software | AED 15,750/yr | 3–6 per licence | Home to Microsoft, Oracle, IBM, Dell; best tech ecosystem; networking events; co-working spaces |
| Dubai Media City (DMC) | Media, marketing, PR, publishing | AED 15,750/yr | 3–6 per licence | Home to CNN, BBC, MBC Group; content creation and advertising hub; shares campus with Dubai Internet City |
| Dubai Silicon Oasis (DSO) | Technology, R&D, manufacturing | AED 12,750/yr | 2–6 per licence | Integrated tech park with residential, commercial, industrial; lower cost than DIC; UAE University nearby |
| JAFZA (Jebel Ali Free Zone) | Manufacturing, logistics, trading | AED 15,000/yr | 3–10 per licence | World's largest free zone by trade value; direct port access; best for physical goods and logistics companies |
| Dubai Healthcare City (DHCC) | Healthcare, medical, wellness | AED 18,000/yr | 2–6 per licence | Dedicated medical free zone; home to 200+ medical facilities; specific to licensed health professionals |
| Dubai Design District (d3) | Design, fashion, luxury, architecture | AED 16,500/yr | 2–5 per licence | Creative industries hub; regular design events; waterfront location near Business Bay; young community |
| Dubai South (DWC) | Aviation, logistics, retail, residential | AED 12,000/yr | 2–6 per licence | Near Al Maktoum Airport (future hub); e-commerce friendly; Expo City Dubai integrated; growing area |
Free Zone Company Formation — Step by Step
Choose Your Free Zone & Business Activity
Day 1Select a free zone that matches your business activity. The activity you register determines your permitted operations — you cannot conduct business outside your licensed activities. Most free zones have an exhaustive activity list on their website.
Reserve Your Company Name
Day 1–2Company names must not contain religious references, offensive terms, or already-registered names. Most free zones allow online name reservation. Names in Arabic and English are both accepted. Sole proprietorships can trade under a personal name.
Submit Application & Documents
Day 2–5Required documents typically include: passport copies for all shareholders and directors, completed application form, business plan (some free zones), NOC from current UAE employer (if applicable), and proof of address. Shareholders do not need to be UAE residents.
Pay Fees & Receive Initial Approval
Day 3–7Pay the licence fee, registration fee, and establishment card fee. Premium/express services available at most free zones for faster processing (additional cost). Initial approval is issued digitally in most modern free zones.
Sign Lease Agreement (Office/Flexi-desk)
Day 5–10Even a flexi-desk (hot-desk with a registered business address) satisfies the office requirement for most free zone licences. Physical offices, warehouses, and labs are available at higher cost. The lease period is typically 1 year, renewed alongside the licence.
Receive Licence & Apply for Visas
Day 10–15The trade licence is issued — you are now a legal entity. Apply for establishment card, then visa applications for shareholders and employees. Visa allocation is 1–6 per desk depending on your office package. Medical fitness test and Emirates ID biometrics done in Dubai.
Activity Restriction Is Real
Mainland Company Setup
A mainland company (also called an onshore company) is registered with the Dubai Department of Economy & Tourism (DET) — formerly DED — and can trade directly across all of Dubai and the UAE without restrictions on customers or location. Since landmark reforms in 2021, 100% foreign ownership is now permitted for the majority of commercial and professional activities.
Trade Licence Types
Commercial Licence
For trading businesses — import, export, retail, wholesale, general trading. Most common type. Cost: AED 10,000–25,000.
Professional Licence
For service-based businesses — consultancy, engineering, accounting, IT services, legal. Cost: AED 8,000–15,000.
Industrial Licence
For manufacturing, production, and processing businesses. Requires a physical warehouse or factory. Cost: AED 15,000–50,000.
Mainland Setup — Step by Step
Initial Approval from DET
Submit company name, business activity, and shareholder details online via DET portal (det.gov.ae) or through a registered business setup agent. Initial approval issued within 1–3 business days.
Reserve Trade Name
Trade name must be unique in the DET database, not contain offensive terms, and must accurately reflect your business activity. Arabic version required. Online reservation available.
Prepare & Attest Documents
Shareholder passports, Memorandum of Association (MOA) drafted by a UAE-registered legal firm. MOA must be notarised by a Dubai Notary Public. Foreign documents may need embassy attestation.
Secure Office Space
A physical office tenancy contract registered with Ejari is mandatory for mainland companies. Virtual offices are not accepted. Office can be as small as a single room — serviced offices qualify.
Pay Fees & Collect Licence
DET licence fee + registration fee + Ejari fee. Total government fees typically AED 10,000–20,000 depending on activity. Licence issued immediately upon payment in most cases.
Register with Additional Authorities
Depending on your activity: Chamber of Commerce membership (AED 1,200/yr), MOHRE registration (mandatory before hiring), Municipality approvals (for F&B, healthcare, etc.).
Local Service Agent — Still Required for Some Activities
Freelancer & Sole Proprietor Options
Dubai has made significant strides in accommodating freelancers and independent professionals. Several pathways allow you to legally operate as a freelancer with a UAE residency visa.
Meydan Free Zone Freelance
One of the cheapest legitimate freelance licences in Dubai. Suitable for all sectors. Includes a registered business address. Popular with digital professionals, consultants, and content creators.
IFZA Freelance Permit
IFZA's freelance option allows professional services across all sectors. The permit comes with a business address and is eligible for UAE bank account opening.
Dubai Internet City — GoFreelance
Tech and media freelancers can apply for GoFreelance through Dubai Internet City. Allows billing clients under a legal entity without setting up a full company.
Mainland Professional Licence (Sole Proprietor)
A DET professional licence as an individual allows you to trade under your own name. Requires a physical office address (registered via Ejari) and MOHRE registration before hiring.
Corporate Tax & VAT
Corporate Tax (Effective June 2023)
| Taxable Income | Rate | Notes |
|---|---|---|
| AED 0 – 375,000 | 0% | Small businesses and startups benefit fully from this threshold |
| Above AED 375,000 | 9% | Only profit ABOVE the threshold is taxed at 9% — not the full amount |
| Free Zone Qualifying Income | 0% | Companies meeting qualifying conditions retain 0% on eligible income |
| Multinational Groups (BEPS Pillar Two) | 15% | Applies to groups with revenue above €750M globally — effective 2025 |
VAT (Value Added Tax)
- UAE VAT rate: 5% — one of the lowest globally
- Mandatory VAT registration when annual taxable turnover exceeds AED 375,000
- Voluntary registration available from AED 187,500 turnover
- VAT returns filed quarterly or monthly (for large businesses) with the Federal Tax Authority (FTA)
- Zero-rated supplies include: exports, international transport, first supply of residential buildings
- Exempt supplies include: financial services, bare land, local passenger transport
Register for VAT Before You Hit the Threshold
Business Banking in Dubai
Opening a corporate bank account in the UAE is often cited as the most challenging step for new businesses. Banks apply stringent KYC (Know Your Customer) and AML (Anti-Money Laundering) checks. Typical processing time is 2–6 weeks. Rejection rates are high for new companies without trading history.
Corporate Banking Options
Emirates NBD Business
Traditional bankUAE's largest bank by assets; strong branch network; good for established companies with UAE activity.
ADCB Business Banking
Traditional bankAbu Dhabi-based; good for companies with Abu Dhabi connections; competitive international transfer rates.
Mashreq Business Banking
Traditional bankGenerally more accessible for new businesses than larger banks; good digital banking platform.
RAKBank Business
Traditional bankSME-friendly; lower minimum balance requirements; Ras Al Khaimah-based but nationwide branches.
Wio Bank (Digital)
Digital business bankUAE's first dedicated digital business bank; ADNOC-backed; instant account opening; great for startups and freelancers.
Mashreq Neo Business
Digital business bankFully digital business account; no minimum balance; integrates with accounting software; good for e-commerce.
Required Documents for Corporate Account
| Document | Notes |
|---|---|
| Trade Licence | Issued by free zone authority or DET |
| Certificate of Incorporation | Issued at company formation |
| Memorandum & Articles of Association | Or equivalent constitutional documents |
| Shareholder passports & Emirates IDs | All shareholders above 25% threshold |
| Director passports & Emirates IDs | All directors |
| Office lease agreement (Ejari) | Physical address in UAE |
| Business plan | 2–3 pages describing business activity and expected revenue |
| 6-month bank statements | Previous business activity if company is not new |
| Audited financial statements | For companies operating over 12 months |
Digital Banks First, Traditional Banks Later
PRO Services & Government Touchpoints
A PRO (Public Relations Officer) is a person or service that handles government paperwork, visa processing, and official transactions on behalf of your company. Most businesses in Dubai use PRO services — the bureaucratic requirements are substantial and require in-person visits to multiple government offices.
Key Government Authorities
DET (Department of Economy & Tourism)
Mainland trade licences, business registration, commercial activities approval
GDRFA / ICA
Immigration, residency visas, Emirates ID, entry permits
MOHRE (Ministry of Human Resources)
Employment visas, work permits, WPS payroll compliance, labour disputes
Dubai Municipality
Physical office inspections, F&B permits, signage approvals, health and safety
Federal Tax Authority (FTA)
VAT registration, corporate tax registration, tax return filing
Dubai Customs
Import/export declarations, customs duty, ATA Carnets for temporary imports
PRO Service Costs
- Monthly PRO retainer: AED 500–2,000/month (depends on volume of transactions)
- Per-transaction PRO fees: AED 150–500 per government visit
- Visa processing PRO fee: AED 500–1,500 per visa
- Document attestation service: AED 200–500 per document
- Full company formation (including PRO): AED 1,500–5,000 one-time (agent fee)
Operating Without a Licence is Illegal
Conducting any commercial activity in Dubai without a valid trade licence is a criminal offence — not a civil matter. Penalties include fines of AED 5,000–50,000, business closure, visa cancellation, and potential deportation. There is no grace period. Obtain your licence before you begin trading, not after.
Quick Setup Cost Summary
| Setup Type | Government Fees | Office (Annual) | Visa per Person | Typical Total (yr 1) |
|---|---|---|---|---|
| Meydan FZ (freelancer) | AED 5,750 | Flexi-desk incl. | ~AED 4,500 | ~AED 12,000 |
| IFZA Free Zone (1 visa) | AED 11,500 | AED 2,500–5,000 | ~AED 4,500 | ~AED 18,500 |
| DMCC Free Zone | AED 11,700 | AED 4,000–15,000 | ~AED 4,500 | ~AED 20,000+ |
| DIC / DMC Free Zone | AED 15,750 | AED 5,000–20,000 | ~AED 4,500 | ~AED 25,000+ |
| Mainland Professional | AED 8,000–15,000 | AED 12,000–30,000 | ~AED 4,500 | ~AED 25,000–50,000 |
| Mainland Commercial | AED 10,000–25,000 | AED 15,000–50,000+ | ~AED 4,500 | ~AED 30,000–80,000 |
Business Setup Agents
Registered business setup agents (also called formation agents) handle the entire process on your behalf. Reputable agents include Commitbiz, Shuraa, Virtuzone, and Decisive Zone. Their fees (AED 1,500–5,000) often save more in time and avoided errors than they cost. They also have relationships with banks that can expedite account opening.