Key Takeaways
- Mainland companies in Dubai can be 100% foreign owned for most activities since 1 June 2021, except strategic-impact activities and commercial agencies.
- Dubai can issue a licence instantly, but permits come after it and you sign an undertaking to obtain every permit before starting.
- The Commercial Companies Law sets no minimum capital for a mainland LLC, only capital that is sufficient and paid in full (Article 76, as of October 2026).
- Every new UAE company, free zone companies included, must register for Corporate Tax within 3 months of incorporation (FTA Decision 3 of 2024).
- Three stalls recur: the instant licence read as permission to trade, a late bank file and a missed tax registration.
A Dubai licence can be issued within the day, yet the work that decides whether you can trade comes before and after it. Seven steps follow, each naming the authority that acts at that point and separating what the law fixes from what is only practice. A simple single-owner setup is often manageable alone, and each step marks where it commonly stalls.
The seven steps to start a business in Dubai
Work in this order: customers, route, activity and legal form, licence with permits, visas and premises, bank, tax. Reversing it can mean paying for a licence you cannot use.
- Decide where your customers are.
- Choose mainland, free zone or offshore. The Department of Economy and Tourism (DET, formerly DED) licenses the mainland; each free zone authority licenses its own zone.
- Fix the activity and the legal form.
- Obtain the licence, then the permits that follow it.
- Arrange the address, the establishment card and the visas.
- Open the bank account.
- Register for Corporate Tax and, if the threshold applies, VAT.
Step 1 Decide where your customers are
Where your customers are shapes the route. A company that sells to UAE households, retailers or government will normally want a mainland licence, and a company that sells abroad or to businesses inside a zone can work from a free zone.
Since 2025 a Dubai free zone company can also sell on the Dubai mainland through a branch licence or a six-month permit, under Executive Council Resolution 11 of 2025. That adds an approval and a fee, and it covers Dubai only. In practice, shops and restaurants need mainland premises in the emirate where customers walk in.
Step 2 Choose mainland, free zone or offshore
Mainland in Dubai means all areas outside the free zones, and DET registers and licenses it through the Invest in Dubai platform (Government of Dubai, October 2026). A free zone company is licensed by its zone authority, and the Government of Dubai list of 3 April 2026 names 21 of them. The free zones hub compares them.
Foreign ownership is the point most people ask about first. Since 1 June 2021 most mainland activities can be 100% foreign owned (Federal Decree-Law 26 of 2020, carried into the Commercial Companies Law, Federal Decree-Law 32 of 2021). The exceptions are activities with strategic impact (Cabinet Resolution 55 of 2021), commercial agencies and anything a sector regulator restricts. Free zone companies can also be 100% foreign owned. On service agents, u.ae's mainland guide (page updated 16 July 2026) says businesses owned completely by non-GCC residents require a local service agent from the UAE, appointed under an agreement attested by a notary public or the court. Advisers describe a service agent as someone who holds no equity and no control; a side letter that gives an agent control or a share of profit is a nominee arrangement, which is a different thing.
Offshore is a different tool. A company registered by JAFZA or by RAK ICC may hold assets and shares and, in designated areas, property; business inside the UAE still needs the matching licence (JAFZA Offshore Companies Regulations 2023, regulation 14.3).
Step 3 Fix the activity and the legal form
Activity choice decides the approvals, the licence fee and later the bank's view of you, so it is the one choice worth making slowly. Dubai's official guide lists the legal forms: general partnership, limited partnership, LLC, private and public joint stock company, civil company and sole proprietorship (dubai.ae, October 2026).
Most founders pick an LLC. It takes 2 to 50 partners, one person may also incorporate and own it, and liability stops at the capital (Commercial Companies Law, Article 71). As of October 2026 the law sets no minimum capital figure; Article 76 asks for capital sufficient for the object, paid in full at incorporation. Article numbers in this guide are as in the 2021 text; check the current wording after Federal Decree-Law 20 of 2025.
The frequent error is choosing the activity by its marketing name instead of the exact activity code. A wrong code means the wrong approvals and fees, and an amendment later costs a new fee and a notification to the bank. Read each candidate activity for its wording, the approval it names and any ownership condition before you pay.
Step 4 Licence and the permits that follow it
Dubai's official route has three stages: initial approval, trade name reservation, then the licence (dubai.ae, October 2026). Initial approval is a no-objection in principle and does not authorise you to operate. The documents are the licensee's passport or Emirates ID, a copy of the residence visa where the owner is resident, and the articles of association. dubai.ae lists the articles as not applicable for a one-person LLC (October 2026).
Executive Council Resolution 5 of 2024 then lets DET issue the licence instantly, with e-signature and no need to attend, except for activities listed by a resolution of the Chairman of the Executive Council, where permits or approvals must come before the licence. The investor signs an acknowledgement and undertaking to obtain every permit before starting, and permits, qualification checks and the on-site inspection happen before the activity starts.
Where it stalls: reading the instant licence as permission to trade. Under the Resolution, permits, qualification checks and the on-site inspection come before the activity starts, so selling before they are in place breaches the undertaking you signed, and the lease and stock you bought for the launch wait with you. Ask DET whether your activity is on the Chairman's list, where the permit comes before the licence. A licensed adviser can map the permits to your activity code before you pay for the licence; ask for that list in writing.
Step 5 Visas, office and establishment card
In practice most Dubai mainland licences need a leased, registered address. Registering the tenancy in Ejari is mandatory under Dubai Law 26 of 2007 as amended. The Dubai Land Department charges AED 177.75 through the Dubai REST app or its website and AED 220 through a trustee centre (October 2026). A commercial Ejari must be in the licensed company's name.
Whether a flexi-desk or virtual address satisfies the licence depends on the activity and on the business centre. Ask DET before you pay for a desk.
Visas follow the licence. On the mainland the Ministry of Human Resources and Emiratisation (MOHRE) sets the work-permit quota after a Ta'qeem assessment, and no published office-size formula decides it. Free zones tie visa allowances to the desk or package, so read the allowance in the zone's own price list.
Step 6 Bank account
A licence does not guarantee a bank account. Banks must verify the customer and the beneficial owners under the Central Bank guidance on due diligence, and they decline when that cannot be completed. The rulebook lists the guidance as in force from 7 November 2025; check it for the April 2026 update.
On 25 December 2025 the Dubai Free Zones Council noted challenges in opening bank accounts for free zone companies and said shared risk-classification standards were being developed (Dubai Media Office).
Trouble starts when the bank file is written after the licence. A bank compares the activity description, the ownership chain, the source of funds and the expected customers with each other and with the website. A mismatch means a declined account or weeks of re-papering.
Step 7 Corporate Tax and VAT
New UAE companies, including free zone companies, must register for Corporate Tax within 3 months of incorporation (FTA Decision 3 of 2024). Registering late carries an AED 10,000 penalty (Cabinet Decision 75 of 2023 as amended), as of October 2026. The return and the payment are due 9 months after the end of the tax period.
The rate is 0% on taxable income up to AED 375,000 and 9% above it. A free zone company pays 0% only on qualifying income, and only if it is a Qualifying Free Zone Person (QFZP). A QFZP is a free zone company that meets the substance and income tests; its other income is taxed at 9%. The English texts on tax.gov.ae are not an official translation.
VAT registration is mandatory above AED 375,000 of taxable supplies and voluntary from AED 187,500, with an application due within 30 days of becoming liable. The usual stall is assuming that a free zone means 0% and skipping the registration. Whether the QFZP test is met is a question for a corporate tax consultant, and an accounting firm can keep the books the return needs.
What a first year typically costs and where to go next
There is no single price for a company in Dubai, because the route, the activity, the premises and the visa count each change it. The authorities publish only some of the lines; the rest comes from DET's fee sheet for your activity and from the zone's own price list.
Three lines vary by case. The licence fee depends on the activity, and the Invest in Dubai cost calculator, as described by Gulf News in September 2026, adds about 5% of annual rent for premises-based licences. Premises come second, with the Ejari fee. Visas come third, with the establishment card added. For the investor visa, DMCC and Meydan state AED 50,000 of share capital on their own pages (October 2026), while the Commercial Companies Law sets no such figure for a mainland LLC.
Ask every provider for the government fees and the service fees on separate lines, with renewal included. If a setup has a corporate shareholder, a regulated activity or more than three visas, the guide to choosing a business setup consultant sets out what to ask for.
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