A Practical Guide to Setting Up Your Business in Dubai (2025)

Choosing Your Jurisdiction: Mainland vs. Free Zone

The first and most important decision is where to register your company. This choice will define your market access, ownership structure, and tax obligations.

Mainland Company

A mainland company, licensed by the Department of Economy and Tourism (DET), allows you to trade directly within the entire UAE market and bid on government contracts without restriction.

• Ownership: Following Federal Decree-Law No. 32 of 2021, foreign investors can now own 100% of a mainland company for over 1,000 commercial and industrial activities. This removes the previous general requirement for a 51% Emirati partner. However, activities with "strategic impact," such as banking, defense, and telecommunications, remain restricted.
• Corporate Tax: Mainland businesses are subject to the UAE's federal Corporate Tax. You will pay 0% on annual profits up to AED 375,000 and 9% on profits exceeding that threshold.
• Office Space: A physical business address is mandatory and must be registered with an Ejari (tenancy) certificate. This requirement can be fulfilled with a cost-effective flexi-desk in a business center.

Free Zone Company

• Ownership: 100% foreign ownership is a standard feature in all free zones.
• Corporate Tax: Free zone companies can benefit from a 0% corporate tax rate on "Qualifying Income." To achieve this, the company must meet strict criteria, including maintaining adequate substance in the UAE and primarily transacting with other free zone entities or international clients. Income from mainland clients is generally considered non-qualifying and is taxed at 9%.
• Market Access: Operations are generally restricted to within the free zone or internationally. To trade directly with the mainland market, a free zone company typically needs to partner with a local distributor.

Business Setup Process in Dubai

Setting up a mainland company involves a clear sequence of steps managed by the Dubai Department of Economy and Tourism (DET). Here’s the process explained:

1. Select Your Business Activity: Choose from over 2,000 available activities. Your choice will determine the type of license (Commercial, Professional, or Industrial) and the legal structure.
2. Reserve a Trade Name: The company name must be unique and comply with UAE naming conventions. This can be done online via the DET portal.
3. Obtain Initial Approval: Confirms the government has no objection to your business. Foreign investors may also require approval from the General Directorate of Residency and Foreigners' Affairs.
4. Draft and Notarize the Memorandum of Association (MoA): For a Limited Liability Company (LLC), the MoA defines the company structure and must be notarized.
5. Secure a Business Location: Lease a physical office or flexi-desk and obtain an Ejari certificate from the Dubai Land Department.
6. Submit Final Documents and Receive License: Provide all documents (initial approval, notarized MoA, Ejari) to DET. Once fees are paid, your trade license will be issued.

The entire process usually takes 2 to 4 weeks, depending on approvals and documentation.

For a complete step-by-step guide, visit our Business Setup Services page.

Business Setup Cost in Dubai

Understanding the costs involved is essential for budgeting your new venture. The total expense can vary based on your business activity, jurisdiction, and office requirements.

A typical breakdown for a mainland LLC in the first year includes:

• Trade Name Reservation & Initial Approval: AED 1,600 – AED 4,000
• License Fees: AED 10,000 – AED 30,000, depending on the business activity
• Office Space (Flexi-Desk): AED 10,000 – AED 20,000 annually
• Visa & Government Fees: AED 4,000 – AED 7,000 per visa

For a mainland LLC, first-year costs typically range from AED 12,000 to AED 30,000, excluding office rent and visa expenses. Free zone setups can sometimes be more affordable, with packages starting around AED 10,000, depending on the zone and visa requirements.

For detailed guidance, visit our Business Setup Services page.

Choosing the Right Free Zone for Your Business

With numerous options available, selecting a free zone that aligns with your industry is key.

• For Global Trade & Logistics: Jebel Ali Free Zone (JAFZA) is a top choice due to its proximity to the Jebel Ali Port, one of the world's largest.
• For Commodities Trading: Dubai Multi Commodities Centre (DMCC) is the world's leading hub for trading gold, diamonds, and other commodities.
• For Technology and E-commerce: Dubai Internet City (DIC) and Dubai Silicon Oasis (DSO) are dedicated tech hubs, while Dubai South is a growing center for e-commerce and logistics.
• For Finance and FinTech: Dubai International Financial Centre (DIFC) operates as an independent financial hub with its own legal and regulatory framework.
• For Startups and SMEs: International Free Zone Authority (IFZA) and Ras Al Khaimah Economic Zone (RAKEZ) are known for their cost-effective packages and streamlined setup processes.

Explore our Free Zone License Guide to find the best fit for your business.

Key Free Zones for Business Setup in Dubai

Dubai’s free zones are designed to encourage foreign investment and provide industry-specific infrastructure. Here are some of the most popular free zones for business setup:

• Dubai Multi Commodities Centre (DMCC)
• Dubai Internet City (DIC)
• Dubai International Financial Centre (DIFC)

For a full comparison of free zones and their benefits, visit our Dubai Free Zones Comparison Guide.

FAQs on Business Setup in Dubai

What is the average cost to set up a business in Dubai?

Mainland LLC costs range from AED 12,000–30,000 in the first year.

Are free zones cheaper than mainland?

Yes, free zone packages start from around AED 10,000.

Can I run my Dubai business from abroad?

Yes, free zones allow remote setup; mainland needs a registered office.

What is a Virtual Office?

A service providing a legal business address (flexi-desk) without full office rent.

What is a Virtual Company License?

A UAE program for foreign entrepreneurs in tech and creative fields, without residency.