There’s a lot of advantages in starting a company in Dubai. The corporate tax is only 9% and there are multiple business incentives introduced by the government to support growth. The Emirate is also home to a diverse consumer population that is highly digitally engaged. These are the steps involved in how to start a business in Dubai.
Steps to Start a Business in Dubai as a Foreigner
These are the steps involved in how to start a business in Dubai.
1. Business Activity
Before you start a business setup in Dubai, you must choose a business activity. There are multiple business activities permitted in the country, currently more than 2,000. Some business activity group examples include:
- Foodstuff trading
- Tourism activities
- Insurance
- Legal services
- Sports club
- Advertising
- Consultancy services
Consider doing some market research into different industry segments, identifying competitors, and looking at how you can stand out.
2. Jurisdiction
There are three business jurisdictions in Dubai: free zone, mainland, and offshore. Each jurisdiction has its own regulatory body and list of permitted business activities. A business setup consultant in Dubai will be able to guide your decision based on your needs.
Some popular free zones in Dubai are:
- Jebel Ali Free Zone (JAFZA)
- Meydan Free Zone
- Dubai International Finance Center (DIFC)
- Dubai Internet City
- Expo City Dubai
| Factor | Free zone | Mainland | Offshore |
| Regulatory body | Depends on the free zone | Dubai Department of Economy and Tourism (DET) | Depends on the offshore zone |
| Ownership | 100% foreign ownership | 100% foreign ownership (for most activities) | 100% foreign ownership |
| Taxes | 0% corporate tax (if eligible) | 9% corporate tax, 5% VAT | No tax obligations |
| Customs | No import duties | Have to pay duties | No customs duties |
| Trading jurisdiction | Within established free zone and international market* | Within UAE and international market | Only international market |
| Ease of setup | 3-5 days | 5-14 days | 2-5 days |
| Cost | AED 10,000 – 30,000 | AED 15,000 – 35,000 | AED 10,000 – 20,000 |
*Dubai free zone companies can now trade with the mainland if they have approval from the Department of Economy and Tourism (DET).
3. Legal Structure
The type of company structure you choose will depend on your choice between company formation in Dubai mainland, business setup in Dubai free zone, or setting up an offshore company in Dubai.
Free zone businesses have the following options:
- Free Zone Establishment (FZE)
- Free Zone Company (FZCO)
- Branch company
Mainland companies can choose between:
- Sole establishment
- LLC
- Civil company
- Private Joint Stock Company (PJSC)
- Branch company
For offshore businesses, the company structure options are:
- Single shareholder entity
- Multi-shareholder entity
- Corporate shareholding
4. Trade Name
The business name you choose has to be unique, and follow the rules of the regulatory authority. You can look through the Department of Economy and Tourism’s business name database to make sure your name is unique. For free zones, you will need to consult the directory from the relevant free zone authority.
5. Trade License
The three main types of trade licenses in Dubai are industrial, commercial, and professional. Each license has sub-license categories (e-commerce, tourism) with the number of activities permitted under each category being determined by the business location.
Momentum’s expert business setup consultants can help you get a trade license in UAE by simplifying the process and providing complete support, from preparing paperwork, getting documents attested, and liaising with the government officials.
Here are some important documents you’ll need for business registration in Dubai:
- Memorandum and Articles of Association
- Personal ID documents of owners, managers, shareholders, directors, authorized signatories
- Business plan (for free zones)
- Certificate of Incorporation
- Business name reservation
- Bank statements
- Initial approval confirmation
- Ejari
6. Visa
Once you receive your visa you can apply for a residence permit. You can also apply for a visa for your dependents and your employees, if you have any. In certain cases, entrepreneurs may be eligible for a UAE Golden Visa that grants them a 10-year residency in the country. If you work with a Momentum consultant, we can handle the entire process for you.
7. Bank Account
One of the last steps to start a business in Dubai is to open a bank account. There are multiple options for bank account options including Wio Bank, Emirates NBD, RAKBANK, Dubai Islamic Bank, Mashreq, and Dubai Islamic Bank.
Our consultants have good relationships with banking service providers and can help direct you to a bank that suits your business along with handling the application process.
Start a Company in Dubai as a Foreigner With Momentum
Momentum houses consultants that are experts in business setup and can handle the entire company formation process, from choosing a jurisdiction to opening a bank account. We handle clients with businesses of all sizes, across locations. Get in touch and book a free consultation today!
