The UAE's Three Economic Zones
The UAE is divided into three different economic zones, each catering to different industry sectors. Although there are differences in the company formation process, they all broadly follow the same template. Choosing the right zone is the single most important decision in your business setup journey.
UAE Mainland
Companies established on the UAE mainland — outside any free zone — are free to operate across a wide range of sectors. They can trade locally, nationally, and internationally without restriction. Most activities now allow 100% foreign ownership.
UAE Free Zones
Designated areas within the UAE, often sector-specific, with dedicated support for businesses. Each zone is managed by its own authority with its own rules, regulations, and licensing procedures. Designed primarily for international trade.
Offshore
Offshore entities incorporated in UAE offshore jurisdictions (RAK ICC, JAFZA Offshore, Ajman Offshore) are non-resident companies designed for international business, asset holding, and investment — not UAE domestic trade.
Identify Your Business Activity
Your business activity is the foundation for selecting the legal entity and type of licence. There are six types of licences in the UAE, and more than 2,000 business activities to choose from. A licence may include more than one activity.
A UAE company can have more than one business activity — with over 2,000 to choose from. The activity selection directly determines the licence type, required approvals, and legal structure best suited to your business.
Choose the Right Legal Structure
The legal structure chosen must align with your business activities. The same structure types are available across Mainland, Free Zone, and Offshore jurisdictions — though availability and specific rules vary by zone.
General Partnership
Two or more UAE Nationals with joint and separate personal liability for company obligations.
Limited Partnership
One or more general partners with joint liability, combined with one or more limited partners whose liability is capped to capital share.
Limited Liability Company (LLC)
Most common. Partners' liability limited to their capital share. 1–50 shareholders of any nationality. 100% foreign ownership in most sectors.
Public Joint Stock Company (PJSC)
Capital divided into equal negotiable shares. Founders subscribe to a portion; remainder offered to the public through a public offering.
Private Joint Stock Company (PRJC)
Up to 200 shareholders. Capital in equal nominal shares not publicly offered. Single-ownership variant (one person PRJC) available.
Civil Company
Owned by two or more partners practising professional activities — consulting, accounting, training, tailors, beauty salons.
Sole Establishment
Owned by one person who bears full personal liability for all financial obligations and debts incurred by the business.
Select Your Trade Name
A company's trade name must conform to the UAE's strict naming conventions or the relevant economic department will not approve it. The local Department of Economic Development registers the trade name, while the Ministry of Economy registers the trademark.
Trade Name Requirements
We recommend preparing 3–5 trade name options in order of preference before starting the registration process. Name availability is checked in real time through the DET or Free Zone authority system. We handle all name reservation applications on your behalf.
Types of Mainland Licences
Dubai's Department of Economy & Tourism (DET) offers a range of licence types tailored to different business models and investor profiles.
For manufacturing, production, packaging, segregation, or collection of goods — including food, textiles, paper, petroleum, and equipment manufacturing.
For buying and selling of goods and services — import/export, logistics, retail, software trading, construction, and real estate.
For service-based businesses — consulting firms, administrative services, educational institutions, and professional practices.
Home-based licence for entrepreneurs selling products or services via social media and online platforms. Sole Proprietorship only.
Allows free zone companies to operate on the mainland without a separate office or local partner — available in DMCC, DAFZA, DIFC, d3, CommerCity, One Central.
Fast-tracked digital licence issued within 5 minutes. Includes a virtual business site for the first year.
For UAE and GCC national entrepreneurs. Provides fee exemptions or minimal annual fees to reduce startup costs.
Home-based licence exclusively for UAE and GCC nationals residing in Dubai. Very low annual fee.
The Complete 10-Step Business Setup Process in Dubai
The UAE's business setup process follows a clear template across all three jurisdictions. Here are the complete steps from start to operational business.
Select between UAE Mainland, Free Zone, or Offshore jurisdiction based on your business activity, target market, ownership structure, and tax preferences.
Your activity determines the licence type and legal structure. Choose from over 2,000 DET-approved activities. A single licence can cover multiple compatible activities.
Select the legal form that aligns with your business — LLC, Sole Establishment, Civil Company, Joint Stock Company, or Partnership. The structure must match your activity.
Reserve a unique trade name that complies with UAE naming conventions — no religious references, not previously registered, followed by the legal form acronym (LLC, EST, etc.).
Submit an application to DET or the relevant Free Zone authority. Initial approval signals the government's willingness to proceed — it is not final approval.
For LLCs, Partnerships, and Joint Stock Companies — draft and notarise a Memorandum of Association. For some professional licences, a Local Service Agent Agreement is required instead.
All UAE companies must operate from a physical address meeting DED and municipality requirements. Provide proof of tenancy (Ejari) or property ownership.
Certain activities require extra clearance from specific government bodies — Ministry of Interior, Ministry of Justice, DHA, KHDA, RERA, Telecoms Regulatory Authority, etc.
Submit initial approval, lease contract (Ejari), MOA or LSA, and any additional approvals. Pay the trade licence fee within 30 days of receiving the demand — or the application is void.
Open a corporate bank account with a UAE or international bank. Required for all business operations. We facilitate introductions to banking partners.
We handle all 10 steps — from activity selection to bank account opening.
Start Your Setup TodayAdditional Government Approvals
In certain situations, additional approval from other government entities is required for specific business activities. These approvals must be secured before the trade licence can be issued. We identify and manage all required approvals as part of our service.
Important: Additional approvals can add 2–8 weeks to the formation timeline and may involve separate fees, inspections, and qualification requirements. We assess all approval requirements during your initial consultation so there are no surprises.
Documents Required for Business Setup
To ensure a smooth business setup and formation process in Dubai, you'll need to prepare the following documents. The exact requirements vary by jurisdiction, activity, and shareholder nationality — we provide a personalised checklist for every client.
Corporate shareholders additionally require: Certificate of Incorporation, Memorandum & Articles of Association, Board Resolution authorising UAE investment, and passport copies of authorised signatories — all notarised and attested up to the UAE Embassy.
Business Setup Costs in the UAE
Budget between AED 20,000 and AED 30,000 (approximately USD 5,450–8,200) for a standard mainland company setup. The cost increases in proportion to your requirements — for example, a foreign trade name or additional government approvals will raise the price. Free zone and offshore setups vary considerably by zone and package.
| Company Type | Typical Setup Cost | Annual Renewal | Key Variables |
|---|---|---|---|
| Mainland LLC | AED 20,000 – 30,000 | AED 10,000 – 20,000 | Activity type, office size, number of visas |
| Mainland Professional | AED 15,000 – 25,000 | AED 8,000 – 15,000 | Activity approvals, number of shareholders |
| Free Zone (Freelance) | AED 5,000 – 12,000 | AED 5,000 – 12,000 | Zone choice, virtual vs flexi-desk, visas |
| Free Zone (SME Office) | AED 20,000 – 50,000 | AED 20,000 – 50,000 | Zone, office size, visa allocation |
| Free Zone (Large Office) | AED 50,000 – 200,000+ | AED 50,000+ | Zone, warehouse, headcount |
| Offshore (RAK ICC) | AED 8,000 – 12,000 | AED 3,000 – 5,000 | Shareholder structure, registered agent |
| Offshore (JAFZA) | AED 10,000 – 15,000 | AED 4,000 – 6,000 | Director requirements, property holding |
| Offshore (Ajman) | AED 5,000 – 8,000 | AED 2,500 – 4,000 | Most affordable offshore option |
Note: You must pay for your trade licence within 30 days of receiving the fee demand. Otherwise your application will be voided and the process must restart. Costs listed are estimates — exact figures depend on your specific activity, zone, and requirements. We provide precise quotes as part of our consultation.
Opening a Business in the UAE — Tax Framework
Although the UAE's low corporate tax rate is still competitive globally, the UAE's tax-free status has evolved significantly. This was signalled by the introduction of 5% Value Added Tax in 2018 and 9% Corporate Tax in June 2023. Understanding the tax framework is essential before choosing your jurisdiction and structure.
| Tax Type | Rate | Threshold / Condition | Applies To |
|---|---|---|---|
| Corporate Tax | 9% | Taxable income > AED 375,000/year | UAE onshore companies & some free zone entities |
| Corporate Tax | 0% | Taxable income ≤ AED 375,000/year | Small businesses — mainland and qualifying free zones |
| Free Zone CT | 0% | Qualifying free zone income only | Free zone entities meeting qualifying conditions |
| Value Added Tax (VAT) | 5% | Annual taxable supplies > AED 375,000 | Most goods and services in the UAE |
| Personal Income Tax | 0% | No threshold — universal | All UAE residents and employees |
| Capital Gains Tax | 0% | No threshold | Not applicable in the UAE |
| Withholding Tax | 0% | No threshold | Not applicable on most payments from UAE |
| Customs Duty | 5% | Most imported goods (UAE mainland) | Free zones exempt from customs duty on imports |
Tax Advisory: We provide corporate tax structuring advice as part of our setup service — ensuring you choose the jurisdiction and structure that optimises your tax position. VAT registration with the Federal Tax Authority (FTA) is handled by our compliance team when your taxable supplies exceed AED 375,000.
Business Setup Overview — FAQs
The right zone depends on your business activity, target market, tax position, and ownership structure. Mainland is ideal for trading directly within the UAE and government contracts. Free zones are best for international trade, tech, media, and finance businesses wanting tax efficiency. Offshore is for asset holding and international structures. We assess your specific situation and recommend the optimal zone during a free consultation.
A standard mainland company with no external approvals takes 5–15 working days. Free zone companies can be set up in as little as 24–72 hours for simple structures. Activities requiring external regulatory approvals (DHA, RERA, KHDA, etc.) can take 3–8 weeks. We provide a realistic timeline assessment at the outset of every engagement.
Previously, UAE regulations required at least 51% of shareholders to reside in the country. This is no longer the case. You can incorporate an LLC with 100% of shareholders residing abroad. Free zone and offshore companies can also be set up entirely remotely. However, you are required to have a registered UAE office address, and some bank account openings require an in-person visit.
There is no fixed minimum share capital requirement for most mainland LLCs and free zone companies. The MOA or company formation documents must state the agreed capital amount, and some specific activities or government authorities impose their own minimums. We advise on the appropriate capital level for your specific business during consultation.
A Memorandum of Association (MOA) is a foundational legal document required for LLCs, Partnerships, and Joint Stock Companies — it outlines shareholding, activities, and capital. A Local Service Agent (LSA) Agreement is used instead of an MOA for certain professional licence holders who require a UAE national agent but who does not hold equity. Only UAE-based law firms, courts, and notary publics can prepare and attest to these documents.
Yes. A UAE licence may include more than one business activity from the approved list of over 2,000 activities. All included activities must be compatible and covered under the same licence category. Some combinations may require different licence types or additional regulatory approvals from external bodies.
Dubai is consistently ranked among the world's top startup and business destinations. Its business-friendly culture, innovation ecosystem, world-class infrastructure, strategic location at the crossroads of Europe, Africa, and Asia, and its strong legal framework make it one of the most attractive places in the world for entrepreneurs and corporations alike. Small to medium-sized enterprises make up 90% of Dubai's economy, and key growth sectors include technology, logistics, financial services, real estate, and tourism.
Let Us Guide You Through
Every Step of the Process
From choosing the right zone and activity to collecting your licence and opening a bank account — our team handles everything so you can focus on your business.