Business Setup In Dubai: Steps, Costs, Legal Rules (2026)

Dubai remains one of the most attractive destinations for entrepreneurs seeking tax-efficient jurisdictions and access to global markets. But navigating business setup in Dubai requires more than enthusiasm, it demands a clear understanding of licensing categories, legal structures, and compliance obligations that vary depending on your chosen jurisdiction.

Whether you're considering a mainland company, a free zone entity, or an offshore structure, each path comes with distinct cost implications and regulatory requirements. Getting these details right from the start can save you significant time, money, and headaches down the road.

At GTAG, we've guided hundreds of business owners through this process, handling everything from initial registration to ongoing tax compliance. This guide breaks down the essential steps, realistic costs, and legal rules you need to know before launching your company in Dubai in 2026.

What to decide before you start

Before you dive into business setup in Dubai, you need to make three fundamental decisions that will dictate your entire registration process. These choices affect your licensing costs, legal obligations, and operational flexibility for years to come. Rushing through these decisions or leaving them vague creates complications that slow down approvals and increase expenses.

Define your business activity and scope

Your business activity determines which regulatory authority oversees your license and what permissions you'll need to operate legally. Dubai categorizes businesses into commercial, professional, industrial, and tourism activities, with each category carrying different capital requirements and restrictions.

Write down exactly what services or products you plan to offer. If you're launching a consultancy, specify whether you'll provide management consulting, IT consulting, or financial advisory services. Each activity requires explicit approval during the licensing phase, and adding activities later involves additional fees and paperwork. Your chosen activities also determine whether you need a physical office space or can operate with a virtual office arrangement.

The more specific you are about your business activities upfront, the smoother your licensing application will proceed.

Calculate your realistic budget

Setting up a business in Dubai requires upfront capital that varies dramatically based on your chosen jurisdiction and legal structure. Mainland companies typically cost between AED 15,000 and AED 50,000 for initial setup, while free zone options range from AED 10,000 to AED 30,000 depending on the zone and package selected.

Beyond registration fees, you'll need to account for office space deposits, visa processing costs, and professional service fees. A single employee visa costs approximately AED 5,000 when you factor in medical tests, Emirates ID, and processing charges. Reserve at least 20% more than your estimated costs to cover unexpected requirements or delays in the approval process.

Step 1. Pick mainland or free zone and legal form

Your choice between mainland and free zone directly impacts your ability to trade locally, your ownership structure, and your annual costs. Mainland companiescan conduct business anywhere in Dubai and the UAE without restrictions, but typically require a local service agent (though you retain 100% ownership). Free zones offer full foreign ownership and tax benefits but limit your ability to trade directly with the UAE market without a distributor.

Compare jurisdiction options

Free zones like Dubai Multi Commodities Centre (DMCC) or Dubai International Financial Centre (DIFC) appeal to businesses focused on international trade or regional headquarters. You'll pay between AED 10,000 and AED 25,000 annually depending on the zone and your license type. Mainland licenses cost more upfront but provide unrestricted market access within the UAE, which matters if you plan to service local clients or bid on government contracts.

Choosing the wrong jurisdiction locks you into limitations that can't be easily reversed without setting up a new entity.

Select your legal structure

Limited Liability Companies (LLCs) suit most business setup in Dubai scenarios, requiring a minimum share capital of AED 300,000 for mainland entities. Free zones offer Freezone Limited Liability Companies (FZ-LLCs) with lower capital requirements, often starting at AED 50,000 or even allowing you to defer capital injection until needed.

Step 2. Register your trade name and get approvals

Once you've selected your jurisdiction and legal structure, you need to reserve your trade name through the Department of Economic Development (DED) for mainland or your chosen free zone authority for free zone setups. Your trade name must comply with strict naming conventions that prohibit religious references, offensive language, and names too similar to existing registered companies.

Submit your trade name application

Log into the relevant authority's portal and submit three trade name options in order of preference. The system automatically checks name availability against registered trademarks and existing businesses, typically providing approval or rejection within 24 to 48 hours. Your name must relate to your business activities, so a consultancy firm can't use "trading" or "manufacturing" in its title.

Obtain initial approvals

Your business setup in Dubai requires initial approval certificates from the licensing authority before you can proceed to physical setup. Submit your business plan, shareholder details, and activity descriptions through the portal. Authorities review your application to confirm your proposed activities align with emirate regulations and zoning requirements. Processing takes between three to seven business days for standard activities.

Securing initial approval before signing office leases protects you from committing to space you can't legally use for your declared activities.

Step 3. Secure an address and get your license issued

Your approved business setup in Dubai requires physical premises before authorities will issue your final license. You can't skip this step or use a residential address, authorities verify your office location matches your declared activities and meets zoning regulations for your business type.

Lease office space and submit tenancy contract

Find office space that complies with your jurisdiction's requirements. Mainland companies need commercial premises registered with Ejari, Dubai's tenancy registration system. Free zones typically offer flexi-desk, shared office, or private office packages ranging from AED 8,000 to AED 50,000 annually. Sign your lease agreement and register it immediately through the Ejari portal for mainland or your free zone's property management system.

Upload your registered tenancy contract to the licensing portal within 48 hours of signing. The system automatically validates your address against approved commercial zones and confirms your lease period meets minimum requirements, typically 12 months.

Submit final documents and collect your license

Complete your license application by uploading passport copies, visa pages, initial approval certificates, and proof of capital (if required). Mainland applications require additional documents like local service agent agreements. Pay your licensing fees through the portal, which range from AED 15,000 to AED 30,000 depending on your activities and jurisdiction.

Your license typically arrives within five to seven business days after final document submission and payment confirmation.

Step 4. Open bank accounts and set up tax and books

Your licensed business setup in Dubai needs banking infrastructure and compliance systems before you can legally operate or invoice clients. Banks require your final trade license, and tax authorities expect registration within specific timeframes to avoid penalties.

Open your corporate bank account

Schedule appointments with at least three UAE banks because approval rates vary significantly between institutions. Bring your trade license, shareholder passports, business plan, and proof of office address to each meeting. Emirates NBD, ADCB, and Mashreq Bank typically process accounts within two to three weeks for standard business activities.

Expect banks to request additional documentation like supplier contracts, client agreements, or detailed cash flow projections if your business involves international transactions or high-value transfers. Initial deposit requirements range from AED 25,000 to AED 100,000 depending on the bank and your business type.

Register for tax and set up bookkeeping

Register for VAT within 30 days if your annual revenue exceeds AED 375,000, or expect mandatory registration at AED 187,500. Corporate tax registration became mandatory for all UAE businesses in 2024, requiring submission through the Federal Tax Authority portal within three months of license issuance.

Missing tax registration deadlines triggers automatic penalties starting at AED 10,000, regardless of your revenue status.

Set up cloud-based accounting software like Xero immediately to track transactions from day one. Proper bookkeeping protects you during audits and simplifies annual tax filings required under UAE corporate tax rules.

Where to go from here

Your business setup in Dubai succeeds when you execute each step methodically and maintain strict compliance from day one. You've learned the critical decisions about jurisdiction selection, the four-step registration process, and the banking and tax requirements that can't be postponed.

Start by finalizing your business activity list and budget calculations this week. Review the jurisdiction comparison again if you're uncertain whether mainland or free zone better serves your market access needs. Most entrepreneurs underestimate the time required for bank account opening, so begin that process immediately after receiving your license.

Professional guidance eliminates costly mistakes during setup and ensures your accounting infrastructure meets UAE tax standards. GTAG specializes in business formation and ongoing compliance for companies operating across mainland, free zones, and offshore jurisdictions. We handle everything from initial registration through VAT and corporate tax filings, letting you focus on building your business instead of navigating regulatory requirements.