How to Set Up a Company in Dubai: A Complete Guide

Dubai is the first choice because of its strategic location, zero income tax, and high-end infrastructure, ease of doing business, and the government’s continued efforts. If you’re serious about setting up a successful business in Dubai, this guide will help understand how to set up a company in Dubai.

Starting a company in Dubai can look simple from the outside until you get started. There are licenses, approvals, jurisdiction choices, document translations, UAE visa requirements, and a hundred other small steps that can get confusing.

In this blog, we’re giving you the full picture, not just the step-by-step basics, but also the hidden insights most people never tell you.

The Process of Company Setup in Dubai Step by Step

Below is a step-by-step breakdown of the Dubai business setup process.

Step 1: Decide Your Dubai Business Type & Activity

Every business in Dubai must register under a specific business activity and this determines your:

• License category (commercial, professional, or industrial)
• Approval requirements
• Office type
• Bank account opening success
• Tax and compliance obligations

There are over 2,000 activities approved by the Department of Economic Development (DED) and individual free zones.

If your exact activity isn’t listed, you may need to redefine your scope or split it across multiple trade licenses.

Insider Tip:
Choosing the wrong activity code can restrict your business or even lead to license rejection later. It’s not just about what you do, it’s about how Dubai classifies it.

Step 2: Choose the Jurisdiction (Dubai Free Zone vs. Dubai Mainland)

This decision affects everything: where you can operate, what clients you can serve, how much ownership you get, and even your UAE visa eligibility.

Don’t just choose the cheapest option. Think long-term:

• Will you need to hire people?
• Do you need a real office or warehouse?
• Will you sell to UAE residents or just abroad?

Hidden Insight:
Free zones offer virtual office packages, but if you need more than 2 to 3 visas, they may ask for a physical space. Also, some free zones don’t allow all activities (e.g., legal or finance consulting).

Step 3: Select a Legal Structure for Your Dubai Business

Legal structure means your company type. Some of the most common business structure types in Dubai are:

• Limited Liability Company (LLC) – used in mainland and free zones
• Sole Establishment – for individuals offering services
• Free Zone Company (FZC) – for ecommerce, media, trading consultancy, etc.
• Civil Company – for professionals like doctors, engineers, architectural services, etc.
• Branch Office – if you’re expanding an existing company
• Public Joint Stock Company (PJSC) – For local businesses like banking, finance, or insurance

Each type has different shareholding rules, visa quotas, and liability levels.

Tip:
In free zones, you can form an LLC with just one shareholder (called FZ-LLC), which is perfect for solo entrepreneurs.

Step 4: Get Your Trade Name Approved

You’ll need to propose a company name, also called trade name, and get it approved by the licensing authority.

Rules for choosing a trade name:

• Must not include religious or political terms
• No abbreviations (e.g., “R&D Solutions” is not allowed, it must be “Research and Development Solutions”)
• Must match your business activity
• Cannot copy an existing registered name

Insider Tip:
You can reserve your company name for 6 months and it’s smart to do this early before someone else grabs it.

Step 5: Apply for Initial Approval

Initial approval is a green light from the authorities to proceed. It doesn’t give you the license yet, but it allows you to prepare your legal documents and office lease.

During this step:

• Your documents are reviewed
• Activity and business type are verified
• Background checks are sometimes performed (for sensitive industries)

Pro Tip:
If your activity is in education, healthcare, or food production, you may need additional ministry approvals before this step is cleared, which you can easily take care by using PRO services in Dubai.

Step 6: Prepare Legal Documents for Dubai Business Setup

At this stage, you’ll prepare the following (depending on jurisdiction and company type):

• Memorandum of Association (MOA)
• Articles of Association (AOA)
• Shareholder resolution
• Passport copies and photos
• Proof of residence (in some cases)
• No Objection Certificate (NOC) if you are already on a UAE visa

Tip:
Some Dubai free zones provide pre-drafted MOA templates, while others require you to hire a legal translator to write and notarize them in Arabic.

Step 7: Choose a Location in Dubai and Sign a Lease Agreement

To get your license, you must show proof of physical space even if it’s just a desk in a co-working area.

• Mainland: Needs Ejari (government-registered lease)
• Free Zone: Offers flexi-desks, executive offices, and warehouses
• Offshore: No office required

Visa quotas in many free zones are linked to square footage. If you want more than 2 to 3 UAE visas for business setup, you may need to upgrade to a bigger physical space in Dubai.

Step 8: Apply for the Trade License in Dubai

Once everything is approved, the authority will issue your trade license, which officially allows you to operate. This document will show:

• Your company name
• License number
• Type of activity
• Expiry date
• Shareholder details

You’ll also receive other business documents:

• Certificate of incorporation
• Memorandum of association
• Share certificate

Tip:
You must renew your license every year and failure to do so will suspend visas, banking access, and legal protections.

Step 9: Open a Corporate Bank Account in Dubai

Many entrepreneurs underestimate how complex UAE bank account opening can be. Banks often ask for:

• Company documents
• Business plan
• Client or supplier contracts
• Background of shareholders
• Proof of address and source of funds

Tip:
Some free zones offer preferred banking partners who can simplify this step but expect at least 1 to 2 weeks for account activation.

Step 10: Apply for UAE Visas for Business Setup

Finally, apply for UAE visas available for business purposes for:

• Owners
• Partners
• Employees
• Dependents (if needed)

Your visa quota depends on:

• Office size
• License type
• Free zone rules

Steps to get a UAE visa include:

• Entry permit
• Medical fitness test
• Emirates ID registration
• Visa stamping

Did you know?
Some free zones limit employee visas to just 2 or 3 under basic packages. Always check this before choosing a trade license.

Free Zone, Mainland, or Offshore: Which One Is Right for You?

Dubai gives you three main types of business jurisdictions and each one has different rules, costs, and benefits.

1. Free Zone Companies

Perfect for: Startups, freelancers, and international businesses who want 100% ownership and don’t need to sell directly to the UAE mainland.

• 100% foreign ownership
• No customs duty for free zone import & export
• Many allow virtual offices
• Fast setup and lower fees
• Cannot trade directly in mainland UAE without a local distributor

Popular Dubai Free Zones:

• Dubai Multi Commodities Centre (DMCC)
• Dubai Internet City (DIC)
• Dubai Silicon Oasis (DSO)
• Shams, IFZA, and Meydan Free Zone (low-cost)

2. Mainland Companies (DED License)

Perfect for: Businesses targeting the local Dubai or UAE market like restaurants, consultancies, retail, and construction.

• Can operate anywhere in the UAE
• No restrictions on client base
• Government contracts and tenders possible
• No limit on number of visas (depending on office space)
• Slightly more steps and costs than free zones
• Some activities may still require Emirati ownership (though rare)

3. Offshore Companies

Perfect for: Holding assets, opening international bank accounts, or doing business outside the UAE.

• 100% foreign ownership
• Privacy and asset protection
• No office required
• Cannot trade inside the UAE or get UAE residency visas
• Heavily regulated for compliance

Offshore setups are usually done in JAFZA Offshore, RAK ICC, or Ajman Offshore.

How Long Does It Really Take to Set Up a Business in Dubai?

You might have seen social media ads saying “Start your company in 1 day!” While that’s technically possible for simple setups, the full Dubai business setup process usually takes between 5 to 20 working days, depending on your situation and type of visa you need to apply.

Here’s a realistic timeline:

What delays the process of company setup in Dubai?

• Missing documents
• Wrong business activity selection
• Delays in NOC from current employer
• Translation & notarization of foreign documents
• Banking compliance questions

With expert help, most delays can be avoided or handled quickly.

Things Most People Don’t Know About Dubai Company Setup Process

1. The Business Activity Code Is Everything

Two companies doing the same thing may need completely different business licenses depending on how their activity is classified.

Example:

“Software Development” vs. “IT Consultancy”

Both sound tech-related, but fall under different authorities and may have different VAT rules.

Tip: Ask for the official activity code list from DED or your free zone before choosing.

2. Secret Delays That No One Talks About

Even if your license is approved, your bank account or visa can hold everything up.

Why?

• Banks may ask for client invoices, contracts, or business models
• Visas may be delayed due to medical test backlogs, especially during busy seasons

Avoid these by preparing backup documents early and booking visa steps in advance.

3. Virtual Office May Not Always Be the Best Option

Free zones love promoting “no office needed” licenses and yes, they’re great if you’re remote.

But:

• You may only get 1to 2 visas
• Some banks reject virtual address companies
• You may not qualify for tenders or government projects

Choose this only if you’re truly solo or remote. Otherwise, a flexi-desk or co-working lease gives you more credibility.

4. Your Office Size Affects Visa Quota

In most jurisdictions:

1 visa = approx. 9 square meters of office space

So if you’re planning to grow a team, start with a space that matches your hiring plan or budget for upgrades later.

5. Compliance Doesn’t End After Company Setup

Once your business is live, you need to:

• Renew your license every year
• File VAT returns if registered
• Maintain accounting records
• Ensure employee contracts meet UAE labor law
• Renew Emirates IDs and health insurance

Miss any of these, and you could face fines, license suspension, or worse, company blacklisting.

Dubai Business Setup Cost Breakdown

The cost of setting up a business in Dubai varies greatly based on:

• License type (license cost estimation)
• Jurisdiction
• Number of shareholders and visas
• Office space size

Here’s a general breakdown of Dubai business setup cost:

Pro Tip:
Always ask for full-package pricing for company setup in Dubai and not just license fees. Some “cheap” offers leave out visa, PRO, or compliance costs.

Mistakes People Make During Dubai Business Setup Process

Here are the most common and costly errors amateur entrepreneurs make:

1. Choosing the wrong activity (restricts operations or causes rejections)
2. Using a license that doesn’t match actual business plans
3. Skipping visa planning (and running into quota issues)
4. Assuming license cost as total cost
5. Not checking renewal fees and rules
6. Not opening a UAE corporate bank account early
7. Trying to DIY everything without expert guidance

Partner with Socialite Consultancy Services for Dubai Company Setup

At Socialite Consultancy Services, we’ve helped thousands of entrepreneurs, investors, and small business owners build their UAE businesses with confidence.

With us, you get:

• Dedicated business setup consultant from day one
• Help choosing the right business activity and structure
• Fast license, visa & bank account assistance
• Ongoing support for renewals, VAT, and HR
• Transparent pricing with no hidden charges
• Connections with trusted auditors, tax advisors, and real estate agents

Book a FREE consultation today.

Key Takeaways

• You can fully own a Dubai business whether you’re local or foreign.
• Start by choosing the right activity, license, and structure.
• Know the full process: registration, licensing, visa, bank account
• Prepare for hidden delays and compliance needs
• Don’t just go for the cheapest option. Plan for long-term
• Get expert help from business setup consultants like Socialite.

FAQs

1. Can anyone start a business in Dubai?

Yes, almost anyone can legally set up a company in Dubai, even if you’re not a resident of the UAE. You don’t need to be a UAE citizen. In most business categories, you don’t even need a local partner anymore. Under the new foreign investment laws, you can now own 100% of your business in many cases.

2. What is the cost of starting a business in Dubai?

The cost of company formation in Dubai starts at around AED 5,750 in a free zone with no visa, and can go up to AED 50,000+ depending on office and visa needs.

3. Do I need a local sponsor for a mainland company in Dubai?

No, you don’t need a local sponsor for most activities as 100% foreign ownership is now allowed, except for a few sensitive sectors.

4. Can I operate a Dubai business from home?

In a Dubai free zone, yes (depending on activity), you can operate a business from home. For Dubai mainland company setup, you usually need a physical address.

5. How long does the full Dubai company setup take?

The Dubai business setup process can take from 5 to 20 working days, depending on license, approvals, and document readiness.