How to set up a business in Dubai: a step-by-step guide

Step 1: choose a free zone or the mainland

Your first decision is where your company will be licensed. Both routes let you run a business in Dubai, but they suit different plans.

Free zones have always allowed 100% foreign ownership. Since 2021, many mainland activities allow it too, so ownership is no longer the main difference for most founders. The bigger questions are where your customers are and what kind of office you need.

If most of your clients are outside the UAE, or you mainly trade internationally, a free zone is often the simpler fit. If you plan to sell goods directly to customers on the UAE mainland, or offer services to mainland clients, ask an adviser how that would work for your activity. Our guide to free zone vs mainland companies in Dubai covers the differences in more detail.

Step 2: choose your business activities

Your business activities are the specific things your license allows you to do, such as general trading, management consultancy or software development. They matter for three reasons:

• Approvals: some activities need a regulator's approval.
• Cost: the number of activity groups you choose affects your license fee.
• Banking: banks look at your activities when they review your account application.

At DHCC Free Zone, you can choose from 2,000+ business activities, and a standard license includes up to 3 activity groups. Pick the activities that describe what you will really do in your first year or two. You can usually add more later through an amendment.

Activities that need a regulator's approval include, for example:

• healthcare, approved by the Dubai Health Authority (DHA)
• education and training, approved by the Knowledge and Human Development Authority (KHDA)
• media, approved by the UAE Media Council
• some financial activities, approved by the Central Bank of the UAE
• some real estate activities, approved by the Dubai Real Estate Regulatory Agency (RERA)

Use the Ask DHCC search on our business activities page to find your activity and see which authority, if any, approves it.

Step 3: pick a company name and legal form

Your company will be a free zone limited liability company, shown as FZ-LLC at the end of its name, for example "Your Company FZ-LLC". If you already own a company elsewhere, a branch may be possible instead. Talk to one of our advisers about which structure suits you.

Under general UAE practice, a company name must not contain:

• offensive or obscene words
• religious terms or references to God
• the names of governments, ruling families or international organizations, unless approved
• a name identical or confusingly similar to an existing company, or a trademark you do not own

If you want to use a person's name, that person usually needs to be a shareholder, and the full name is used rather than initials. Abbreviations and acronyms are often restricted. Shortlist two or three options and test them with our company name check before you apply.

Step 4: work out your setup budget

Your budget has three parts: the license, any residence visas, and optional services. These are indicative DHCC Free Zone figures at the time of writing:

A 2 or 3 year license saves 15% on the license fee. Activities from more than 3 groups cost extra, so use our cost calculator to see the total for your exact selection of activities, visas and extras.

Remember to budget for yearly costs as well as setup costs. The license, the establishment card and each visa allocation repeat every year.

Step 5: apply, sign and pay

With your activities, name and budget settled, the application itself follows four steps at DHCC Free Zone:

1. Choose your activities and confirm your company details.
2. See your setup cost before you commit.
3. Upload your documents. A passport copy, a photo and proof of address for each shareholder are a typical starting point, and our advisers confirm the full list for your structure.
4. Sign and pay online to complete your application.

You can apply online, including from outside the UAE. Our remote license lets you set up and manage your company from abroad. Some later steps, such as the visa medical test and Emirates ID biometrics, happen in person in the UAE, so plan a trip if you will hold a residence visa.

We are based in Dubai Healthcare City, in the heart of Dubai, near Dubai Healthcare City Metro Station on the Green Line. Your license includes a flexi-desk, and you can move to a fixed desk or an office as your team grows.

Step 6: apply for residence visas

Once your license is issued, you can apply for residence visas for yourself as an investor, for employees and for family members. Your company also needs an establishment (immigration) card, which is required once you hold any visa.

The residence visa process usually follows these steps:

1. Entry permit
2. Change of status, if you are already in the UAE
3. Medical fitness test
4. Emirates ID biometrics
5. Residence visa issuance

The medical test and biometrics happen in person in the UAE. The visa is now recorded electronically against your Emirates ID rather than as a sticker in your passport.

If you plan to sponsor family members, you will need to meet a minimum salary or income requirement set by the authorities. You will usually also need documents such as attested marriage or birth certificates and a tenancy contract. Our visa services page explains how we support each step.

Step 7: open a bank account and register for tax

A corporate bank account lets you invoice clients, pay suppliers and run payroll. Banks run their own KYC and compliance checks. They usually ask for your license and company documents, passports for signatories and shareholders, a business plan, and details of your source of funds and expected transactions. Timelines vary, often a few weeks, and signatories may need to attend in person.

Tax registration is the other early task:

• Corporate tax: every company must register with the Federal Tax Authority through EmaraTax and file an annual return, and late registration carries a penalty. Under the standard regime, taxable income up to AED 375,000 is taxed at 0% and income above it at 9%. A Qualifying Free Zone Person can pay 0% on qualifying income if it meets the conditions.
• VAT: the rate is 5%. Registration is mandatory once taxable supplies and imports exceed AED 375,000 over 12 months, or are expected to within the next 30 days. You can register voluntarily from AED 187,500.

Tax rules change, so check your own position with a registered tax agent or adviser. Our banking and tax support covers bank account assistance and tax registrations.

Common mistakes to avoid

Most delays in a Dubai company setup come from a few avoidable mistakes:

• Choosing more activities than you need. Activities from more than 3 groups cost extra, and regulated activities add approval steps.
• Leaving regulator approvals late. If an activity needs DHA, KHDA or another regulator's approval, find out before you apply.
• Skipping the name check. A name that clashes with an existing company or trademark will be rejected.
• Budgeting for the license only. Visas, the establishment card and yearly visa allocations add to your first-year cost.
• Forgetting tax registration. Corporate tax registration applies even if you expect to pay 0%.
• Missing your renewal date. Late renewal can bring penalties and may block visa renewals.

Setting up a business in Dubai is a series of clear decisions, and most of the work sits in the first three: where to license, which activities to choose and what to call your company. Settle those, check your total in the calculator, and when you are ready, start your application or talk to one of our advisers.