How To Start A Business In Dubai: Steps, Costs & Licenses

Dubai has earned its reputation as a global hub for entrepreneurs, and for good reason. If you're exploring how to start a business in Dubai, you've likely been drawn by the zero personal income tax, strategic positioning between East and West, and access to a consumer base spanning the Middle East, Africa, and Asia.

Getting from "interested" to "operational" requires more than enthusiasm, though. You'll need to choose between Mainland and Free Zone jurisdictions, select the right license type, and understand the true costs involved, not just government fees, but office space, visas, and ongoing compliance requirements.

This guide walks you through each step of the process, from initial planning to trade license approval and bank account setup. At GTAG, we've guided hundreds of businesses through Dubai's company formation process, handling everything from license applications to corporate tax registration. We've compiled that experience into a straightforward roadmap here. By the end, you'll have a clear picture of what's required and realistic expectations on timeline and budget.

What to decide before you register anything

You need to make several strategic decisions before you submit a single application or pay any fees. These choices will determine your licensing costs, available business activities, and even which banks will work with you. Getting these decisions right upfront saves you from costly amendments or restructuring six months down the line.

Your business plan and funding requirements

Start by calculating your true startup capital needs, not just the license fee. Your initial investment should cover your trade license (AED 10,000 to AED 50,000 depending on jurisdiction), office space (physical or flexi-desk), visa packages for yourself and key employees, initial stock or equipment, and at least six months of operating expenses. Most banks require a minimum deposit of AED 25,000 to AED 50,000 just to open a corporate account.

Write out your revenue projections for year one and identify when you expect to reach break-even. This exercise helps you determine whether you need external investors or partners, and it becomes essential documentation when applying for business bank accounts. Dubai banks scrutinize business plans carefully, especially for new companies without trading history.

The jurisdiction you choose directly impacts your visa allocation, office requirements, and ability to trade within the UAE mainland market.

Your target market and business model

Decide whether you'll serve local UAE clients, international markets, or both. This choice determines whether you need a Mainland license (required for direct UAE market access) or can operate from a Free Zone. If you plan to sell physical goods in Dubai malls or to UAE government entities, you'll need Mainland registration, which requires a local service agent (not a shareholder, just a registered liaison).

Consider your delivery and fulfillment model as well. E-commerce businesses selling physical products need warehouse space and import permits. Service businesses might only need a flexi-desk initially. Companies requiring specific equipment or labs will need to budget for fitted office space, which can add AED 50,000 to AED 200,000 to your startup costs depending on size and location.

Your ownership structure and shareholder arrangement

You must decide on share distribution before registration. Will you operate as a sole proprietor, equal partners, or with majority and minority shareholders? Free Zones allow 100% foreign ownership across all business types. Mainland companies also now permit full foreign ownership for most activities, though certain sectors (like security services or fishing) still require UAE national partners.

Think through your succession and exit strategy at this stage. If you plan to bring in investors later or sell the business within five years, structure your shares accordingly from day one. Some Free Zones offer flexible share classes, while others keep it simple with common shares only. Your corporate structure also affects how you'll handle corporate tax obligations starting in 2024, particularly if you set up holding companies or group structures across multiple licenses.

Document these decisions in writing, even if you're a sole founder. When you engage a business setup consultant or PRO (Public Relations Officer), having clear answers to these questions speeds up the process significantly and prevents confusion during the application stages.

Step 1. Choose the right activity and jurisdiction

Your first official step in how to start a business in dubai is selecting your business activity and jurisdiction. This decision locks in your license type, determines which government department handles your application, and sets your ongoing compliance requirements. You cannot change jurisdictions without starting the entire process over and paying new license fees.

How to identify your business activity code

You need to match your business operations to one of Dubai's approved activity codes. Each code falls under a specific license category: Commercial (trading goods), Professional (providing services), or Industrial (manufacturing). Your activity description must be precise because it determines which suppliers you can work with, what you can legally invoice for, and which business bank accounts you qualify for.

Start by visiting the UAE Federal Government portal and searching their business activities database. Write down three to five activities that describe what you'll actually do. A marketing consultant might list "Marketing Consultancy," "Digital Marketing," and "Brand Management." An e-commerce business needs "General Trading" or specific product categories like "Electronics Trading" or "Clothing and Textiles Trading."

Each additional business activity on your license costs between AED 1,000 and AED 5,000, so select only what you need for your first year of operations.

Mainland vs. Free Zone: where to register

You must choose between Mainland registration (through Department of Economy and Tourism) or one of Dubai's 30+ Free Zones. Mainland gives you unrestricted access to the UAE market. You can bid on government contracts, open retail locations anywhere in Dubai, and trade directly with local customers. The trade-off: you pay slightly higher license fees (starting at AED 15,000) and need a physical office space from day one.

Free Zones offer 100% foreign ownership, zero corporate tax (in most cases), and simplified setup processes. Popular options include Dubai Multi Commodities Centre (DMCC) for trading businesses, Dubai Internet City for tech companies, and Dubai Airport Free Zone (DAFZA) for logistics operations. Your license fees start around AED 10,000, and you can use a flexi-desk arrangement initially. The restriction: you cannot trade directly in the UAE market without appointing a local distributor.

Factor	Mainland	Free Zone
UAE market access	Direct and unlimited	Through distributor only
Office requirement	Physical space mandatory	Flexi-desk acceptable
License cost range	AED 15,000 - 50,000	AED 10,000 - 35,000
Corporate tax rate	9% on profits over AED 375,000	Often 0% (zone dependent)
Setup timeline	2-4 weeks	1-2 weeks

Choose Mainland if your customers are UAE-based businesses or consumers. Select a Free Zone if you're exporting, serving international clients, or need the lowest possible overhead.

Step 2. Set your legal structure and reserve your name

You've picked your jurisdiction and activities, now you need to formalize your legal entity type and secure your company name. This step in how to start a business in dubai directly impacts your liability protection, visa eligibility, and tax treatment. Your legal structure also determines whether you can open branches, hold assets, or bring in partners later without major restructuring costs.

Selecting your legal entity type

Choose between Limited Liability Company (LLC), Free Zone Company (FZ-LLC or FZE), or Sole Establishment based on your ownership structure and liability needs. An LLC works for Mainland companies with one to fifty shareholders and provides full liability protection, meaning your personal assets stay separate from business debts. Free Zone Establishments (FZE) suit single owners, while Free Zone Companies (FZ-LLC) accommodate multiple shareholders, both offering the same liability shield.

Your entity type determines your minimum share capital requirements. Most Free Zones require no minimum capital or just AED 1,000. Mainland LLCs technically require no minimum capital anymore either, though banks often expect you to maintain AED 50,000 to AED 100,000 in your business account during the first year. Professional service companies can register as Civil Companies, which cost less but don't allow commercial trading activities.

Your legal structure locks in your visa quota, typically one to three visas per activity for Free Zones, and up to 100 visas for Mainland companies based on office size.

Reserving and registering your company name

Submit your proposed company name to your chosen authority for preliminary approval before you pay any license fees. Your name must include your legal structure (LLC, FZE, etc.) and cannot duplicate existing registered businesses or use restricted words like "Royal," "International," or "Emirates" without special permission. Most jurisdictions process name approvals within 24 to 48 hours.

Prepare three name options ranked by preference. Your first choice might be taken, so having alternatives prevents delays. The name must relate to your approved business activities. If you're registered for "Marketing Consultancy," a name like "Dubai Manufacturing Solutions LLC" will get rejected. Include your industry or service type in the name for clarity, like "Apex Digital Marketing LLC" or "Summit Trading FZE."

Step 3. Secure approvals, office address, and license

This third step in how to start a business in dubai involves collecting official permissions, securing physical space, and submitting your final license application. You'll coordinate between multiple government departments here, and each approval builds on the previous one. Your timeline depends on whether you need external regulatory clearances, which some activities require before you can proceed with standard licensing.

Obtaining initial and external approvals

Submit your Initial Approval application through your jurisdiction's online portal, attaching your passport copies, shareholder agreements, and approved company name certificate. Free Zones typically issue this approval within one to three business days. Mainland applications go through the Department of Economy and Tourism and take three to five business days. This approval confirms your business activity is permitted and gives you clearance to proceed with office rental and further documentation.

Certain business activities require external department clearances before you receive your trade license. Food-related businesses need Dubai Municipality approval. Healthcare services require Dubai Health Authority permits. Educational institutions must get Knowledge and Human Development Authority clearance. Security services need Ministry of Interior approval. Check your specific activity requirements during the initial approval stage, as these external permits can add two to six weeks to your timeline and cost an additional AED 2,000 to AED 15,000.

Finding and registering your office address

Secure your office space before submitting your final license application, as you must provide a tenancy contract or Ejari registration. Free Zones offer flexi-desk packages starting at AED 8,000 annually, dedicated offices from AED 25,000, and warehouse facilities from AED 80,000. Mainland companies need physical office space in approved business centers, with annual costs ranging from AED 30,000 for small offices to AED 150,000+ for retail locations.

Your tenancy contract must match your license jurisdiction and include specific clauses confirming the space is approved for commercial use.

Register your Mainland lease through Ejari (Dubai's tenancy registration system) within 48 hours of signing. This costs AED 220 and creates your official proof of address. Free Zone offices come pre-registered, so you'll receive your address certificate directly from the Free Zone authority when you sign your lease agreement.

Submitting your license application

Compile your final documentation package: initial approval certificate, passport copies, visa-size photos, tenancy contract, Memorandum of Association, and external approvals if applicable. Upload these through your jurisdiction's portal along with your license fee payment. Mainland licenses cost AED 15,000 to AED 50,000 depending on activities. Free Zone licenses range from AED 10,000 to AED 35,000. Your trade license arrives within two to five business days after submission, delivered as a digital certificate you can download and print.

Step 4. Plan for taxes, VAT, visas, and banking

Your trade license is issued, but you're not operational yet. This fourth step in how to start a business in dubai covers the post-license requirements that let you legally employ staff, collect payments, and operate compliantly. You'll register with tax authorities, process employment visas, and open a corporate bank account. Each task has specific documentation requirements and processing times you need to factor into your launch timeline.

Setting up corporate tax and VAT registration

Register for Corporate Tax within three months of receiving your trade license if you expect annual revenue to exceed AED 1 million. Free Zone companies remain exempt from the 9% corporate tax rate in most cases, while Mainland businesses pay tax on profits above AED 375,000. You complete registration through the Federal Tax Authority portal, submitting your trade license, Memorandum of Association, and passport copies. Processing takes five to seven business days.

Apply for VAT registration if your taxable supplies will exceed AED 375,000 annually (mandatory threshold) or fall between AED 187,500 and AED 375,000 (voluntary threshold). Your VAT registration number arrives within 20 business days after application approval. You'll need this number printed on all invoices before you can legally charge VAT to customers.

Arranging visas for yourself and employees

Submit your investor or partner visa application immediately after license issuance, as this process takes two to three weeks. You'll need a Emirates ID registration appointment, medical fitness test (AED 300), and visa stamping at immigration. Your total visa cost runs approximately AED 5,000 to AED 7,000 per person including medical tests, Emirates ID fees, and visa stamping charges.

Budget three to four weeks from license issuance to receiving your stamped residency visa and Emirates ID card.

Process employee visas in batches once you have your own residency sorted. Each employee needs an offer letter, attested educational certificates, and entry permit approval before they can enter the UAE for medical testing and visa stamping.

Opening your business bank account

Schedule appointments with two to three banks simultaneously, as account opening can take four to eight weeks. Bring your trade license, Memorandum of Association, passport copies, proof of address (utility bill), and detailed business plan with financial projections. Banks require initial deposits ranging from AED 25,000 to AED 50,000 depending on the institution and your business type.

Next steps

You now understand the complete process of how to start a business in Dubai, from selecting your jurisdiction to opening your bank account. Your actual timeline runs four to eight weeks from initial planning to full operational status, assuming you have all documents ready and no specialized activity approvals required.

Start by finalizing your business activity selection and jurisdiction choice based on your target market and budget. Prepare your documentation package including passport copies, business plan, and initial capital deposits. Many entrepreneurs underestimate the coordination required between licensing authorities, banks, and immigration departments, which explains why 70% of new businesses use formation specialists to handle the process.

GTAG has guided hundreds of companies through Dubai company formation, handling everything from license applications to corporate tax registration and ongoing compliance. Our team manages the entire setup process while you focus on building your business operations. Contact our business setup specialists to discuss your specific requirements and receive a detailed cost breakdown for your industry and jurisdiction.