Key Takeaways
- Under Executive Council Resolution 5 of 2024, DET has to issue most licences instantly, apart from activities on the Chairman's list. You still have to meet the permit rules before the activity starts, so holding a licence doesn't mean you can trade yet.
- A company that owns shares needs its papers stamped in a fixed order: UAE embassy, Ministry of Foreign Affairs, Arabic translation and Ministry of Justice (dubai.ae, October 2026).
- New companies have 3 months from incorporation to register for Corporate Tax. Miss it and the penalty is AED 10,000 (as of October 2026).
- The Central Bank's customer due diligence guidance, listed as in force from 7 November 2025, says a bank shouldn't open or keep a relationship when it can't finish its checks on the customer.
- Going it alone is realistic with one individual shareholder, a standard activity and 0 to 2 visas. The weak spots are the bank papers, the tax registration and the wording of the activity.
Most of the steps in setting up a company in Dubai yourself are public, and plenty of founders manage them. The mistakes tend to happen at the same few points, where an authority, a free zone or a bank asks for something you didn't know you'd need. Twelve of those points are listed below, with what each one costs and the guide that covers it in detail.
Company setup mistakes grouped by area and cost
The mistakes fall into six areas: the activity and its permits, ownership and documents, premises and visas, tax, banking, and dealing with providers. Use the table to spot where a step tends to go wrong, what it costs you and where to read more. Where a row rests on a legal rule, the sections after the table explain it and name the authority. Where a row says "often", it describes what practitioners see, and it isn't a rule of law.
| No. | Area | Where it often goes wrong | What it costs | Detail |
|---|---|---|---|---|
| 1 | Activity | The activity is picked by the name you'd use in marketing, not by its exact code | The wrong approvals and fees, then an amendment fee and a notice to the bank later | Activity code guide |
| 2 | Permits | Trading starts as soon as the instant licence arrives | You break the undertaking you signed under Resolution 5 of 2024 | Activity code guide |
| 3 | Documents | A shareholder company's papers are missing a step in the attestation chain | Weeks of delay, or the application is rejected | Attestation and power of attorney |
| 4 | Structure | A nominee or service agent deal backed by side letters | You lose control, and the bank papers fail the bank's checks | Local sponsor and nominee |
| 5 | Memorandum | A standard memorandum whose Arabic text nobody read | Disputes, and changes that have to be authenticated again | Memorandum and shareholder agreement |
| 6 | Name | The name copies or resembles an existing one, or leaves out the legal form | Rejection, and personal liability for the manager of an LLC | Trade name rules |
| 7 | Visas | A package with several visas is bought without checking how visas are tied to desks | Fewer visas than planned, and extra quota fees | Visa quota and office size |
| 8 | Premises | The lease isn't registered in the company's name | The licence, its renewal or a visa request gets blocked | Visa quota guide |
| 9 | Mainland sales | A free zone company works in Dubai without the licence or permit that Resolution 11 of 2025 asks for | Unlicensed work on the mainland, and the mainland income can cost you the 0% tax treatment | Section on activity above |
| 10 | Tax | Nobody registers for Corporate Tax, or the beneficial owner register is never filed | An AED 10,000 penalty for late registration, and fines from the second register breach | Section on tax below |
| 11 | Banking | The bank papers are only put together after the licence is issued | The account is refused or held up | Bank account rejection |
| 12 | Providers | Quotes are compared on the headline price, not the total, and deposits go to personal accounts | The budget runs over, or money is lost | Section on providers below |
Activity, licence and permits
Your licence activity is the exact business you're allowed to carry out, picked from an official list. It's the first decision you make, and it's cheapest to fix before the licence is issued. Choose it by a marketing name and you end up with the wrong approvals and fees. Changing it later counts as an amendment, with a fee set by the authority and a notice to your bank (rows 1 and 2).
In Dubai you get the licence first and the permits are checked afterwards. Executive Council Resolution 5 of 2024 lets the Department of Economy and Tourism (DET), Dubai's mainland licensing office, issue the licence instantly. In return you sign an undertaking, a formal promise to meet the permit requirements before and during the activity. If a permit needs an inspection of your premises, the Resolution sets a maximum of 3 working days once the application is complete. Start selling before your activity's permit comes through and you're breaking that promise.
Each free zone has its own authority, which licenses companies there under its own rules. A free zone licence alone doesn't let you work on the Dubai mainland. Executive Council Resolution 11 of 2025 (Article 3) says that work needs a licence or permit, and it offers three ways to get one (as of October 2026). You can open a mainland branch. You can run a branch from the free zone at AED 10,000 a year. The third is a six-month permit for AED 5,000. All three cover Dubai only, and the company has to keep separate records for its mainland work (row 9).
Mainland income also affects your tax. The 0% rate is only for a Qualifying Free Zone Person, a free zone company that meets the conditions for that rate, and only on qualifying income (Cabinet Decision 100 of 2023; Ministerial Decision 229 of 2025). Ordinary services sold to mainland customers usually don't count as qualifying income.
Ownership, structure and documents
If one of your shareholders is a foreign company, its documents have to go through four steps, as listed on dubai.ae (October 2026). First the UAE embassy in the home country attests them. Then the UAE Ministry of Foreign Affairs counter-attests them, they get an Arabic legal translation, and the Ministry of Justice attests them last. Skip a step and you lose weeks, or the application is rejected (row 3).
A nominee is someone registered as a shareholder on behalf of another person. Hidden nominee shareholdings have no basis in the companies law, and Cabinet Decision 109 of 2023 requires companies to disclose their beneficial owners, the real people who own or control them in the end. A side letter can quietly pass control or profit to someone other than the registered shareholder. Your bank papers and the company registers then tell two different stories. The Central Bank's guidance lists nominee shareholders as one of its red flags (row 4). Have a lawyer read any arrangement like this before you sign it.
The memorandum of association (MoA), the founding contract between the owners, and the company name have their own rules. If the Arabic text and a translation differ, the Arabic wins. The memorandum also has to say how disputes will be settled (Commercial Companies Law, Articles 14 and 73, 2021 text; check the current wording after Federal Decree-Law 20 of 2025). The name of a limited liability company (LLC) has to end with its legal form, and managers who ignore that are personally and jointly liable (Article 72). Watch the share capital, the money the owners commit to the company, as well. The law sets no fixed minimum, but it does ask for enough capital, paid in full (Article 76).
A special purpose vehicle (SPV) is a company that holds assets and doesn't trade. A DIFC Prescribed Company can't carry out commercial or operational activities or employ staff. An ADGM SPV that isn't exempt has to appoint a registered corporate service provider (DIFC and ADGM pages, October 2026). DIFC and ADGM are the financial free zones in Dubai and Abu Dhabi. Try to run an SPV as a trading business and you'll hit those limits.
Premises, visas and staff
Your visa quota is the number of residence visas your company may apply for. Each free zone sets its own, usually by package, desk or rented floor area. The Ministry of Human Resources and Emiratisation (MOHRE) gives no office-size formula on its service page for mainland companies. RAKEZ, the Ras Al Khaimah Economic Zone, says one desk in a serviced office allows up to 2 visas, two desks up to 4, and no company more than 4 (October 2026). So if a quote promises five visas on that kind of office, you'd need a different setup (row 7, an example only).
Your lease has to be in the company's name. Ejari, Dubai's official register of tenancy contracts, needs a commercial lease to show the licensed company as tenant (Dubai Land Department FAQ, October 2026). Registering a company lease normally costs AED 220 through a trustee centre. The AED 177.75 option by app or website is for tenants and landlords who are individuals. Whether a flexi desk is good enough for the licence, the visa quota or the bank depends on your activity and on the business centre (row 8).
Staff paperwork has to happen in the right order. Find out which card must be active before you apply for the first entry permit, the visa that lets a new hire enter the country. Budget for health insurance, too. Since 1 January 2025, employers in every emirate have had to provide it for private-sector workers. MOHRE's listed price for a basic package is AED 320 a year (October 2026).
Tax and compliance
You have 3 months from incorporation to register for Corporate Tax with the Federal Tax Authority (FTA), and that includes free zone companies (FTA Decision 3 of 2024). Late registration brings an AED 10,000 penalty (Cabinet Decision 75 of 2023 as amended). A late tax return costs AED 500 a month for the first 12 months and AED 1,000 a month after that (row 10).
VAT registration becomes compulsory once your taxable sales and imports go over AED 375,000 in the past 12 months, or you expect them to within the next 30 days. You then have 30 days to apply (FTA, October 2026). Keep in mind that the English texts on tax.gov.ae aren't an official translation.
The beneficial owner register records the real people behind the company. You must file it within 60 days of getting your licence and update it within 15 days of any change. A first breach gets a written warning, and fines start with the second (Cabinet Resolution 132 of 2023). You also have to name one individual living in the UAE who is allowed to give beneficial owner details to the registrar.
Banking
A licence doesn't come with a bank account. Banks run due diligence, which means checking who you are, who owns the company and where the money comes from. The Central Bank's customer due diligence guidance is listed as in force from 7 November 2025, with an April 2026 update you can find in the rulebook. It tells banks to verify customers and beneficial owners. It also says they shouldn't open or keep a relationship when they can't complete those checks.
The guidance names red flags such as nominee shareholders, ownership that's hard to trace, an unclear source of funds and a new company funded with a large sum. On 25 December 2025, reports of a Dubai Free Zones Council meeting said the Economic Security Centre of Dubai had pointed to difficulties in opening bank accounts for free zone companies. Some banks advertise how fast they open accounts. Those claims describe the process for customers who qualify, not how many applications get approved.
Setup advisers say bank papers put together after the licence are one of the main reasons accounts get refused (row 11). Your activity description, ownership chain, source of funds and expected customers should match across the bank application, your website and your contracts.
Process and providers
The headline price on a quote isn't what you'll pay in total. A quote can leave out renewal, visas, the establishment card (the immigration record that lets your company sponsor visas), medical tests and the Emirates ID, Chamber of Commerce membership and the audit. Government services also add small knowledge and innovation fees, AED 10 each on Ejari (Dubai Land Department). No authority publishes what a consultant should charge, so get every charge listed separately in writing.
Pay deposits to the company you've signed with, and only against an agreed scope of work, a refund clause and a tax invoice. If someone asks you to pay into a personal account, stop and ask why.
Keep the original documents, the portal login and the company registers with the company, not with a provider. Plan for closing down as well. Cancelling the licence, deregistering from Corporate Tax, cancelling visas and closing the bank account are separate steps, and each has its own cost (row 12).
A short list for a simple case
Doing it yourself is a fair choice when there's one shareholder who is a private individual and the activity is a standard one that no regulator oversees. The zone should have a published package and an online portal. There should be no company shareholders, no sales on the mainland and 0 to 2 visas. Even then, give extra care to the bank papers, the Corporate Tax registration and the activity wording. Our guide on how to open a company in Dubai yourself, step by step, takes you through that case in order.
An adviser makes things a lot safer in some situations. These include a shareholder that's a company or lives abroad, a regulated activity, or a mix of mainland and free zone. Trading in goods, more than three visas, a DIFC or ADGM structure and plans to exit the business belong on that list as well. In those cases, nine jobs are worth handing over, and each links back to the table:
- Matching the activity code to the permits it needs before you pay (rows 1 and 2).
- Picking between mainland and free zone with ownership, tax and the bank in mind (row 9).
- Handling the documents: attestation, translations, power of attorney, memorandum and name (rows 3, 5 and 6).
- Setting up any nominee, holding company or SPV together with a lawyer (row 4).
- Getting visas, medical tests and Emirates IDs done in the right order (rows 7 and 8).
- Checking the bank papers in advance and choosing the bank (row 11).
- Making the tax registrations and setting up a calendar for the first year (row 10).
- Keeping the registers, filing beneficial owner details and appointing an auditor (row 10).
- Planning how you'd close or sell the business (row 12).
You can handle everything else on your own. That includes reading the activity list, collecting your documents, writing up the bank papers, registering for tax and sending your questions to each authority. Legal documents are a job for a lawyer and tax filings for an accounting firm. You can decide item by item what to hand over.
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More Company Setup Guides
Related Company Setup Guides
- DED activities list and how to choose the right code
- Business bank account rejected in Dubai, why and what to fix
- Trade name reservation Dubai and the rules behind rejections
- Local sponsor Dubai, service agent and nominee arrangements
- Visa quota company Dubai, reading package and office size
- Memorandum of association UAE and the shareholder agreement
- Power of attorney UAE and attested documents for company setup
- How to open a company in Dubai yourself, step by step
- Lawyers in the UAE
- Accounting firms in the UAE
