How to Open a Business in Dubai: 9 Steps From Trade Licence to Corporate Tax Registration

How to open a business in Dubai: the short answer

In short, you choose between the mainland and a free zone, pick a licensed activity and legal form, reserve a trade name, obtain initial approval, sign the constitutional documents, secure premises, collect the licence, set up the immigration file and bank account, and then complete the beneficial owner, corporate tax and VAT filings.

The nine steps this guide follows are:

1. Choose mainland or free zone (and, if the business will operate beyond Dubai, the emirate).
2. Select the business activity and legal form.
3. Reserve the trade name.
4. Obtain initial approval, including any security approval required for foreign investors.
5. Prepare and attest the memorandum of association and related agreements.
6. Secure premises and, in Dubai, register the tenancy with Ejari.
7. Obtain any sector approvals and collect the trade licence after paying the fees.
8. Open the immigration file, sponsor visas and open a corporate bank account.
9. File the beneficial owner register, then register for corporate tax and, where required, VAT.

Steps 1 to 7 are licensing. Steps 8 and 9 are where most new companies run into trouble, because they sit with different authorities (the Ministry of Human Resources and Emiratisation, the residency authorities, the company registrar and the Federal Tax Authority) and each has its own clock. For a broader view of how the choice of vehicle affects liability and tax in any new market, see our analysis of whether to open a branch or a subsidiary abroad.

Step 1: mainland or free zone, the first decision

The first decision is the licensing jurisdiction: a mainland company is licensed by the emirate's economic department, which in Dubai is the Department of Economy and Tourism (DET), while a free zone company is licensed by the authority that runs that free zone. The UAE portal lists free zone authorities in all seven emirates, and Dubai alone has many of them, each with its own permitted activities, legal forms and fee schedule.

The practical difference is market access and tax. A mainland company can trade directly across the UAE market. The federal corporate tax regime, by contrast, says it will continue to honour the corporate tax incentives for free zone businesses that comply with all regulatory requirements and do not conduct business with the UAE mainland. A free zone entity that wants to sell into the onshore market therefore needs to plan how it will do so without losing its tax position, and that planning is best done before the licence is issued, not after the first onshore contract is signed.

Issue	Dubai mainland	Dubai free zone
Licensing authority	Department of Economy and Tourism	The relevant free zone authority
Foreign ownership	100% for most activities; restricted list for strategic impact activities	Set by the free zone's own rules and permitted legal forms
Typical legal forms	LLC, partnerships, joint stock companies, branch of a foreign company	Free Zone Establishment (FZE), Free Zone Company (FZCO), LLC, branch
Trading in the UAE market	Direct	Onshore business can affect free zone corporate tax incentives
Licence timing (official guidance)	Online set-up through the federal Basher platform in as little as 15 minutes for eligible businesses; otherwise depends on approvals	Licence issued within 14 working days of an online application, per the UAE portal
Premises	Physical address required; Dubai tenancies registered with Ejari	Office or facility rules set by the free zone authority
Corporate tax registration	Within three months of incorporation	Within three months of incorporation (free zone persons included)
Beneficial owner register	Required within 60 days	Required within 60 days (financial free zones apply their own rules)

Groups that need offices in more than one emirate should also look at the capital: advisers in Abu Dhabi can explain how the Department of Economic Development there and its instant licence compare with Dubai's route.

Can a foreigner own 100% of a company in Dubai?

Yes, for most activities. Federal Decree-Law No. 26 of 2020, which came into effect in early 2021, permits 100 per cent foreign ownership of mainland companies and abolished the requirement for a majority Emirati shareholder or local partner. The change was later consolidated in Federal Decree-Law No. 32 of 2021 on Commercial Companies, the statute that now governs mainland companies.

Two qualifications matter. First, the law authorises the Cabinet to set up a committee to identify activities of "strategic impact", and the Cabinet then sets licensing requirements for those activities, which may include limits on foreign ownership. The UAE portal lists the restricted categories as security and defence, telecommunications, and banking, financial and insurance activities, plus a short list of others including commercial agencies, Hajj and Umrah organising and certain fishing activities. Second, the same reform eliminated the obligation on branches of foreign companies to appoint a UAE national service agent.

Some mainland checklists still refer to a local service agent agreement for businesses wholly owned by non-GCC nationals, so confirm with DET which documents your legal form and activity require before you budget for one.

Ownership of the company is a separate question from ownership of its premises. If the plan involves buying rather than leasing property, our guide to foreigners buying property in Dubai and nine other countries explains Dubai's designated freehold areas.

Steps 2 and 3: business activity, legal form and trade name

Your activity drives everything else, because it determines the legal form and the type of licence. The Ministry of Economy and Tourism says there are more than 2,000 business activities to choose from, and a single licence can cover more than one activity, provided the legal form matches each of them.

Licence types

At federal level the ministry lists six licence types: industrial, commercial, professional, tourism, agricultural and crafts. Dubai's own menu is longer. According to the UAE portal, Invest in Dubai lists eight: industrial, commercial, professional, eTrader, dual, instant, SME and Intelaq. A consultancy that will employ a team generally needs a professional or commercial licence, while an online seller working from home may look at eTrader. The right category matters because changing it later usually means amending the licence and, sometimes, the legal form.

Legal forms

The mainland legal forms are the general partnership, limited partnership, limited liability company (LLC), public joint stock company (PJSC) and private joint stock company (PrJSC), with branches of foreign companies as a further route. In practice most foreign-owned operating businesses choose an LLC, while a parent that wants the UAE operation to sit inside its existing entity may prefer a branch. In a free zone the options listed by the UAE portal are a Free Zone Establishment (FZE), a Free Zone Company (FZCO), an LLC, a public company and a branch, although not every free zone registers every type.

Trade name rules

Trade names are registered with the emirate's economic department (in a free zone, with the free zone authority). The name must be followed by the abbreviation of the legal form, such as LLC, must suit the activity, must not offend public morals or order, must not contain the names of any religion or governing authority or the names or logos of external bodies, and must not already be registered. A trade name is not a trade mark: marks are registered federally with the Ministry of Economy and Tourism. Founders who want brand protection beyond the UAE should read our guide to registering a trademark internationally before they commit to a name.

Steps 4 to 6: initial approval, memorandum of association and premises

Initial approval is the government's confirmation that it has no objection to the business being established; it does not authorise you to start trading. The portal notes that foreign investors must first obtain the approval of the General Directorate of Residency and Foreigners Affairs, and that some activities need prior approval from bodies such as the legal, security or securities regulators. A foreign company opening a mainland branch applies to the Ministry of Economy and Tourism for its own initial approval.

The memorandum of association

A memorandum of association (MoA) is required for limited partnerships, LLCs and joint stock companies. It must be attested, and UAE law firms, courts and notaries prepare and attest MoAs. The MoA is where shareholders fix the share capital, management powers, transfer restrictions and what happens on deadlock or exit. For any business with more than one shareholder it is worth agreeing a separate shareholders' agreement as well, with a dispute resolution clause that names the forum deliberately: our explainer on the seat and venue of arbitration sets out why the choice of seat decides which courts supervise the process.

Premises and Ejari

Every UAE business must have a physical address. Premises must meet the economic department's requirements and the municipality's land-use rules, and an office or warehouse tenancy agreement must be provided. In Dubai the tenancy must be registered with Ejari, and the licence application asks for a lease attested by the Real Estate Regulatory Agency. Choose premises that fit your hiring plan: as Step 8 explains, the size of your facility is one of the factors the labour ministry uses to decide how many work permits you can have.

Step 7: licence issue, fees and timelines

Once initial approval, the attested MoA, the lease and any sector approvals are in place, the licence is issued by the economic department in person or online. The official guidance is explicit about one deadline: the trade licence fee must be paid within 30 days of receiving the payment voucher, or the application is cancelled.

Sector approvals

Regulated activities need a further approval before the licence is issued. Examples in the official list include the Telecommunications and Digital Government Regulatory Authority for telecoms, the Central Bank of the UAE for banks, exchange houses and insurers, the Securities and Commodities Authority for financial consultancy, brokerage and investment advice, the General Civil Aviation Authority for air cargo and ticketing agencies, and the Ministry of Human Resources and Emiratisation for manpower supply.

How much does it cost to set up a company in Dubai?

There is no single figure. Official sources do not publish one all-in price, because the cost depends on the emirate or free zone, the activity, the legal form, the premises and the number of visas. The main components are:

• Government fees for the trade name, initial approval and licence, set by DET or the free zone authority.
• Premises: rent, plus Ejari registration in Dubai.
• Legal work: drafting and attesting the MoA and any shareholders' agreement.
• Immigration and labour costs, including a refundable bank guarantee of AED 3,000 for each registered mainland employee (see Step 8).
• Compliance set-up: bookkeeping and tax registration, which carries an AED 10,000 penalty if missed (see Step 9).

The UAE portal points free zone founders to Invest in Dubai's set-up cost information and the DMCC business set-up wizard for estimates. Treat any fixed "package price" from a set-up agent with caution, and ask which government fees, visas and annual renewals it includes. Timelines vary in the same way: the UAE portal says that after choosing a sector, zone, legal entity and trade name, a founder applying online to a free zone authority will get a licence within 14 working days, while a mainland licence for a regulated activity waits on its sector approval.

Step 8: immigration file, visas and the corporate bank account

A licence lets the company exist; it does not yet let it employ anyone. On the mainland, the employer must register with the Ministry of Human Resources and Emiratisation (MoHRE) by opening a file and obtaining an establishment card and number linked to the business licence. The employer then applies for an electronic signature card, which MoHRE issues after inspecting the premises, and only then can it apply for work permits.

The number of employees a company can hire depends on the quota MoHRE approves, which the ministry sets according to the company's legal status, the size of its facilities, its projects and its business needs. Work permit applications need the licence, the e-signature card, the worker's passport (valid for at least six months), a photograph and qualifications attested by the UAE Ministry of Foreign Affairs. MoHRE also requires a bank guarantee of AED 3,000 for each registered employee, which may be refunded when the employee leaves and the labour card is cancelled. Residence is handled at federal level by the Federal Authority for Identity, Citizenship, Customs and Port Security (ICP) and locally by the General Directorate of Residency and Foreigners Affairs. Free zone companies follow their free zone authority's own employment and visa process, so check the zone's rules before signing offer letters. For founders and senior hires with complex residence histories, immigration advisers can map the visa route alongside the company timetable.

Opening the corporate bank account

Banks will not open a corporate account until they can verify who owns and controls the company. Expect to provide the licence, the attested MoA, the shareholder register, beneficial owner details, passports and Emirates IDs of signatories, the lease and a description of expected transactions and counterparties. Banks worldwide have become stricter after heavy enforcement for anti-money laundering failures, as our report on the $1.21bn penalties against Bank of America shows, so a clear explanation of the business model and source of funds shortens the process considerably.

Step 9a: the beneficial owner register within 60 days

Every licensed company, including those in commercial free zones, must identify and record its ultimate beneficial owners under Cabinet Decision No. 109 of 2023. Under Article 5, a beneficial owner is anyone who owns or controls 25% or more of the capital or voting rights, directly or through a chain of ownership, or controls the company by other means such as the right to appoint or dismiss the majority of directors. If no one meets that test, the person who exercises control by other means is treated as the beneficial owner, and failing that, the senior manager.

The key deadlines are:

• 60 days from licensing to create the beneficial owner register and submit it, with the register of partners or shareholders, to the registrar.
• 15 days to record any change in beneficial ownership or in the shareholder register after becoming aware of it.
• 15 days for a nominee director to notify the company of that status.

The company must also give the registrar the name of a UAE-resident individual authorised to disclose the required information, and it may not issue bearer share warrants. Companies wholly owned by the federal or a local government are exempt, and the financial free zones apply their own regimes. Breaches are dealt with under Cabinet Decision No. 132 of 2023, which sets a written warning followed by administrative fines that rise for repeat violations.

Step 9b: corporate tax registration for new companies

All new UAE companies, whether mainland or free zone, must register for corporate tax, and the deadline is short. Under FTA Decision No. 3 of 2024, a resident juridical person incorporated on or after 1 March 2024, including a free zone person, must apply to register within three months of incorporation, establishment or recognition. Missing it is expensive: the Ministry of Finance announced that, from 1 March 2024, an administrative penalty of AED 10,000 applies for late corporate tax registration, under Cabinet Decision No. 10 of 2024.

Rates and reliefs

Corporate tax was introduced by Federal Decree-Law No. 47 of 2022 and applies to financial years beginning on or after 1 June 2023. The standard rates are 0% on taxable income up to AED 375,000 and 9% on taxable income above that. Very large multinational groups face a separate top-up regime, explained in our guide to the Gulf's domestic minimum top-up tax.

Small start-ups may elect for Small Business Relief where revenue is equal to or less than AED 3,000,000 in both the current and all previous tax periods. The election is made for each tax period, and it is not available to a Qualifying Free Zone Person or to a member of a multinational group with consolidated revenue above AED 3.15 billion. A free zone company must therefore choose between the free zone regime and the relief; it cannot have both. Because the conditions for qualifying free zone treatment are technical and turn on the type of income earned, this is the point at which most founders should bring in tax advisers. Electing relief or qualifying for 0% does not remove the duty to register, keep records and file a return.

Step 9c: VAT registration thresholds

VAT has applied in the UAE since 1 January 2018 at a standard rate of 5%. Registration is mandatory once a UAE business's taxable supplies and imports exceed AED 375,000 a year, and optional above AED 187,500. Businesses register through the Federal Tax Authority's online services after creating an account.

The VAT threshold is the same number as the 0% corporate tax band, but the two tests measure different things: VAT looks at taxable supplies and imports, corporate tax at taxable income. A start-up with heavy early costs can be well under the corporate tax band yet above the VAT threshold. Voluntary registration can make sense for a business that incurs significant VAT on set-up costs, because registration is what allows input tax to be recovered. Accountants and auditors can set up the bookkeeping so that the first returns are right.

Your first-year compliance calendar

The table below collects the post-licence deadlines a new Dubai company faces, measured from the date of licensing or incorporation.

Obligation	Deadline	Authority	Consequence of missing it
Pay trade licence fee	Within 30 days of the payment voucher	DET or free zone authority	Application cancelled
Beneficial owner and shareholder registers	Within 60 days of licensing; changes within 15 days	Company registrar	Warning, then administrative fines
Corporate tax registration	Within 3 months of incorporation	Federal Tax Authority	AED 10,000 penalty
VAT registration	Once taxable supplies and imports exceed AED 375,000 a year	Federal Tax Authority	Penalties under FTA rules
MoHRE establishment file and e-signature card	Before applying for any work permit	MoHRE	Cannot lawfully employ staff
Trade name certificate and licence renewal	On each renewal date	DET or free zone authority	Licence lapses

Common mistakes when setting up a business in Dubai

The most expensive mistakes are rarely in the licence itself; they are in the choices made around it. The ones that recur most often are:

• Choosing a free zone for price alone and then signing onshore contracts that put the free zone tax position at risk.
• Picking the wrong activity or licence type, which limits what the company may lawfully do and forces an amendment later.
• Treating the trade name as a trade mark. Registration with DET protects the name on the register, not the brand.
• Missing the three-month corporate tax deadline because the company is not yet trading. Dormancy is not an exemption, and the penalty is AED 10,000.
• Forgetting the beneficial owner register, or failing to update it within 15 days after a share transfer or investment round.
• Undersized premises that cap the MoHRE work permit quota just as the company needs to hire.
• A thin MoA with no shareholders' agreement, leaving deadlock, exit and dispute resolution to default rules.
• Ignoring home-country tax. A UAE company does not change where its founders are tax resident; UK founders in particular should read our guide to becoming non-resident for UK tax before assuming profits are taxed only in the UAE.

When to instruct a local lawyer or corporate adviser

A simple single-shareholder free zone licence can be handled directly with the free zone authority, and the federal Basher platform is designed for quick online set-up. Outside those cases, local advice usually pays for itself. Instruct a UAE corporate lawyer or adviser when:

• the activity appears on the strategic impact list or needs a sector regulator's approval;
• there is more than one shareholder, outside investment is planned, or a parent group is involved;
• a free zone company intends to sell into the mainland and wants to protect its corporate tax position;
• the business is choosing between a branch and a subsidiary, or between emirates;
• visas are needed for founders and staff with differing nationalities and residence histories; or
• the group must decide how the UAE entity interacts with tax rules in the parent's home country.

Before the first meeting, gather the passports of all shareholders and proposed managers, the parent company's constitutional documents and group structure chart (with board resolutions if a corporate shareholder is involved), a description of the planned activities, expected revenue and headcount for the first two years, and any draft heads of terms with investors or partners.

Corporate INTL's Find an Expert directory lists lawyers and advisers in more than 150 jurisdictions. Readers can search for corporate and commercial specialists in the UAE, browse advisers in Dubai across practice areas, or use the Find an expert form under this article to submit a request and be matched with a member. For a simple case, the official portals and this guide show how to open a business in Dubai; for anything more complex, an hour of local advice before the licence application costs far less than amending a licence, restructuring a shareholding or paying a late registration penalty afterwards. More guides for deal teams and founders are collected in our corporate, commercial and M&A coverage.

Frequently asked questions

How to open a business in Dubai?

Choose the mainland or a free zone, select an activity and legal form, reserve a trade name and obtain initial approval. Then attest the memorandum of association, secure premises (registered with Ejari in Dubai), collect the licence, set up visas and a bank account, and complete the beneficial owner, corporate tax and VAT registrations.

Can a foreigner own 100% of a company in Dubai?

Yes, for most activities. Federal Decree-Law No. 26 of 2020, now consolidated in the Commercial Companies Law, Decree-Law No. 32 of 2021, permits full foreign ownership of mainland companies. Activities of strategic impact, such as defence, telecommunications, banking and insurance, can carry ownership restrictions set by the Cabinet.

What is the difference between a free zone and a mainland company in the UAE?

A mainland company is licensed by the emirate's economic department, in Dubai the Department of Economy and Tourism, and can trade across the UAE. A free zone company is licensed by its free zone authority. Free zone corporate tax incentives depend on meeting regulatory requirements and not conducting business with the UAE mainland.

How much does it cost to establish a company in Dubai?

There is no single official price. Costs depend on the emirate or free zone, activity, legal form, premises and number of visas. Budget for government licence fees, rent and Ejari, MoA drafting and attestation, a refundable AED 3,000 MoHRE guarantee per mainland employee, and accounting for tax registration.

How long does it take to set up a company in Dubai?

Official guidance says eligible businesses can be set up online through the Basher platform in about 15 minutes, and a free zone licence is issued within 14 working days of an online application. Regulated activities take longer because they wait for sector approvals, and visas and banking add further time.

Do all businesses in the UAE need to register for corporate tax?

Yes. A resident company incorporated on or after 1 March 2024, including a free zone company, must apply to register within three months of incorporation, even if it is not yet trading or expects to pay 0%. Late registration attracts an AED 10,000 administrative penalty.

What is the corporate tax rate for a Dubai company?

The rate is 0% on taxable income up to AED 375,000 and 9% above that, for financial years beginning on or after 1 June 2023. Small Business Relief is available where revenue is AED 3 million or less in the current and all previous periods, but not to qualifying free zone persons.

When does a new UAE company have to register for VAT?

Registration is mandatory once taxable supplies and imports exceed AED 375,000 a year, and voluntary above AED 187,500. The standard rate is 5%. Businesses register online with the Federal Tax Authority, and voluntary registration can help a start-up recover VAT incurred on set-up costs.

What is the UBO register in the UAE?

It is the beneficial owner register required by Cabinet Decision No. 109 of 2023. Companies must record anyone owning or controlling 25% or more, or controlling by other means, file it with the registrar within 60 days of licensing and record changes within 15 days.

Sources

1. UAE Government portal (u.ae): Steps to start a business on the mainland
2. UAE Government portal (u.ae): Full foreign ownership of commercial companies
3. UAE Government portal (u.ae): Starting a business in a free zone
4. UAE Government portal (u.ae): Recruiting on the mainland
5. UAE Government portal (u.ae): Corporate tax
6. Federal Tax Authority: Decision No. 3 of 2024 on the specified timeframes for Corporate Tax registration
7. UAE Ministry of Finance: AED 10,000 penalty for late Corporate Tax registration (27 February 2024)
8. Federal Tax Authority: Small Business Relief
9. UAE Government portal (u.ae): Register for VAT
10. Ministry of Economy and Tourism: Cabinet Decision No. 109 of 2023 on Regulating the Beneficial Owner Procedures (English version)

About this article

This guide was researched and written by The Corporate INTL Newsroom, which covers cross-border legal, regulatory and business developments for lawyers, professional advisers and financiers in over 150 jurisdictions. It has been checked against the UAE Government portal, the Ministry of Economy and Tourism, the Ministry of Finance, the Federal Tax Authority and the text of Cabinet Decision No. 109 of 2023. Government fees vary by emirate, free zone and activity and change regularly, so confirm current fees and document lists with the Department of Economy and Tourism or the relevant free zone authority before applying. This article is general information, not legal or tax advice; for advice on a specific set-up, consult a qualified adviser. Last reviewed 21 October 2026. For more analysis like this, visit the Corporate INTL newsroom or subscribe to Corporate INTL.