Dubai Company Setup Guide: Everything You Need to Know

Dubai is home to tall buildings, busy shopping malls, world’s top brands, and many Fortune 500 companies. Many investors plan for Dubai company setup because they pay very little tax and its access to remarkably large number of customers. The city sits between Asia, Europe, and Africa, making it easy to reach many countries. If you want to start a company here, this Dubai company setup guide is what you need.

6 Reasons Dubai Is the Best for Company Setup

The Dubai city offers several advantages that make a Dubai company setup guide essential reading for anyone considering expanding their business horizon:

• Tax benefits: 0% tax on personal and business income (but 9% corporate tax for businesses that earn higher than AED 375,000)
• Strategic location: Connecting East and West with excellent logistics infrastructure
• World-class facilities: Modern office spaces, tech parks, and free zones
• Multicultural environment: Expats make up a greater part of the population
• Strong economy: Diverse and resilient across various sectors
• Government support: Pro-business policies and initiatives

The UAE government also focuses on making the company setup in Dubai step by step process easier so that Dubai becomes accessible for foreign investors.

Different Types of Business Structures in Dubai

Before going through the Dubai business setup process, you need to understand the different business structures available.

Mainland Companies

• Also called onshore companies
• Conduct business throughout the UAE without restrictions
• Trade directly with the local market
• 100% foreign ownership for certain business activities.

Free Zone Companies

• Operate within specific designated areas
• Offer 100% foreign ownership
• Focused on specific industries
• Offer attractive benefits
• Have some limitations on conducting business

Popular free zones include:

• Dubai Multi Commodities Centre (DMCC)
• Dubai International Financial Centre (DIFC)
• Dubai Media City
• Dubai Internet City
• Jebel Ali Free Zone

Offshore Companies

• Best for holding assets, investments, or intellectual property
• Cannot conduct business within the UAE
• Provide confidentiality and tax benefits.
• The simplest form of Dubai company setup.

The Complete Step by Step Overview of Company Setup in Dubai

If you want to set up a company in Dubai and become your own boss, you can do so easily with the following steps below:

Step 1: Define Your Business Activity

Determine what business activities you’ll engage in. The Department of Economic Development (DED) has classified over 2,000 business activities, and your license type depends on your chosen activities. Activities fall under:

• Commercial
• Professional
• Industrial
• Tourism

Each activity has specific requirements and regulations. Being precise about your business activities helps avoid complications later.

Step 2: Choose a Business Structure

Based on your business needs, decide whether a mainland, free zone, or offshore company suits you best. Consider factors like:

• Target market (local UAE market or international)
• Capital requirements
• Ownership preferences
• Visa requirements
• Office space needs

Step 3: Select a Location

For mainland businesses, you’ll need office space that meets the DED requirements. Free zone companies must establish within their chosen free zone, with options ranging from shared workspaces to private offices.

Step 4: Choose a Company Name

Naming guidelines in the UAE are quite strict. Your chosen name must:

• Not contain offensive or blasphemous language
• Not reference religious or political organizations
• Not include abbreviations of your full name
• Follow specific formats if named after a person

Step 5: Submit Initial Approval Application

Once you’ve decided on these fundamentals, you can apply for initial approval from the relevant authority:

• Mainland: Department of Economic Development (DED)
• Free zone: Respective free zone authority
• Offshore: Relevant offshore registration authority

Step 6: Prepare and Submit Documents

The next step in business setup in Dubai involves preparing and submitting various documents, which typically include:

• Completed application forms
• Passport copies of all shareholders
• Business plan (for certain free zones)
• NOC from current sponsor (if you’re an employed resident)
• Bank reference letters

Requirements related to documents can change based on the jurisdiction and company type.

Step 7: Secure Your License

After document approval, you’ll pay the license fees and receive your business license. You can now legally operate your business.

Step 8: Open a Corporate Bank Account

Finally, open a corporate bank account. This typically requires:

• Trade license
• Company documents
• Passport copies of shareholders
• Bank forms
• Initial deposit (varies by bank)

UAE banks have become more selective about opening accounts for new companies, so having proper documentation and a clear business plan is essential.

Costs Associated with Dubai Company Setup

Understanding the costs involved helps with proper planning. Here’s what to expect:

Initial Setup Costs

• License fees
• Registration fees
• Office rent
• Visa costs
• Corporate bank account setup costs and minimum balance requirements

Annual Renewal Costs

• License renewal: Similar to initial license fee
• Office lease renewal
• Visa renewals
• Miscellaneous regulatory fees

Free zones often package these costs together, offering transparency and predictability.

Things Not to Do During Company Setup in Dubai

Many entrepreneurs make avoidable mistakes when establishing their business:

1. Choosing the wrong jurisdiction: Not aligning your business needs with the right mainland or free zone options
2. Incorrect activity selection: Listing activities that don’t match your actual business operations
3. Underestimating capital requirements: Not accounting for all setup and operational costs
4. Ignoring visa allocations: Not understanding how many visas your setup allows
5. Overlooking banking challenges: Not preparing adequately for the corporate account opening process

Our Dubai company setup guide wouldn’t be complete without mentioning these potential pitfalls.

Recent Changes to Company Setup Regulations

The UAE constantly evolves its business regulations to remain competitive. Recent changes include:

• Allowing 100% foreign ownership for many mainland businesses
• Introduction of long-term visas for investors and entrepreneurs
• Virtual company license options
• Reduced setup and renewal fees in many free zones
• Simplified documentation requirements

These changes have made the company setup in Dubai step by step process more straightforward than ever before.

Tips for Dubai Company Formation

To ensure your business setup goes smoothly:

• Research thoroughly before committing to a specific jurisdiction
• Get cost estimates in writing
• Verify all requirements directly with authorities
• Allow sufficient time for the process
• Keep documents well-organized
• Consider working with a reputable business setup consultant

While the process has become more streamlined, having expert guidance can still save time and prevent costly mistakes.

Comparing Dubai with Other UAE Emirates for Business Setup

Each emirate in the UAE offers unique advantages:

• Dubai: International recognition, diverse economy, excellent infrastructure
• Abu Dhabi: Oil wealth, government projects, stability
• Sharjah: Manufacturing focus, lower costs, cultural hub
• Ajman: Most affordable setup options, simplified processes
• Ras Al Khaimah: Industrial focus, lower costs, tourism potential
• Fujairah: Strategic location for logistics, oil bunkering
• Umm Al Quwain: Lowest population density, niche opportunities

Key Takeaways on Dubai Company Setup

• Whether you’re looking at a mainland setup for full market access, a free zone for industry-specific benefits, or an offshore structure for asset protection, there’s a solution that fits your business goals.
• Knowing the requirements, costs, and limitations of each option helps you make an informed decision that serves your business well into the future.
• With its strategic location, world-class infrastructure, and business-friendly policies, Dubai offers exceptional opportunities for entrepreneurs and investors from around the globe. The city’s vision for economic diversification and innovation creates an environment where businesses can truly thrive.

Contact Us Today to Set Up a Company in Dubai

Common Questions About Starting a Business in Dubai

What’s the cost to form a Dubai company?

The cost of setting up a Dubai company can be different because it depends on the company type, size, activities, and other things. On the mainland, just the license usually costs equal or above AED 15,000. In free zones in Dubai, expect to pay AED 15,000, which can go up to 50,000 for the complete package. You’ll also need to pay for an office, worker permits, and other fees.

Can people from other countries own a Dubai company by themselves?

Yes! People from any country can now own 100% of most businesses in this UAE city. This is true for businesses in free zones, offshore companies, and now many mainland businesses too.

How much time does it take to launch a Dubai company?

1-4 weeks is typical duration for free zone businesses. Mainland companies take about 2-4 weeks. Offshore companies can be ready in just 3-5 working days if you have all your papers ready.

Do I need to be physically present in Dubai for company setup?

You can start many steps online, but usually you need to visit Dubai to sign papers and open a bank account. If you can’t come, you can give someone special permission (called power of attorney) to do these things for you.

How much money do I need to put into my Dubai company to set up?

Many free zones don’t ask for any specific amount of money to start, or they only ask for about 1,000 AED. Mainland businesses might need more money for certain types of work, but many don’t have a set amount anymore.

Can I run my Dubai company while living in another country?

Yes, you can. This works best with offshore companies, which are made for this purpose. Free zone companies let you work mostly from abroad too. Mainland companies usually need you to spend more time in Dubai.