How to start a business in Dubai: the steps in order

Starting a business in Dubai follows a sequence: decide what you will do and who you will sell to, choose between the mainland and a free zone, set up the right legal form, obtain a licence, open a bank account and register for the taxes that apply. Foreign nationals can set up and own a company, and for most activities the ownership can be 100% foreign. The order matters, because several early choices are expensive to reverse.

The steps

1. Define the activity. Every licence is tied to a specific activity. Write down what you will sell, to whom and where. Some activities need an additional regulatory approval.
2. Choose mainland or free zone. The answer depends on where your customers are. See mainland vs free zone.
3. Choose the legal form. LLC, sole establishment, branch and others each have different liability and audit effects. See types of companies in the UAE.
4. Reserve the trade name. The name must follow the authority's naming rules and be available.
5. Obtain initial approval and prepare the incorporation documents. This confirms the activity is permitted. Documents are signed and the company is registered.
6. Secure premises. Mainland licences generally need a tenancy contract. Free zones offer desks and offices within the zone.
7. Issue the licence. Fees are paid and the licence is issued. Establishment and visa processes follow with the authority; AONE advises on the sequence but does not process visas.
8. Open the bank account. Banks apply their own due diligence. See corporate bank account approval.
9. Register for tax and set up accounting. Corporate tax and, if you pass the threshold, VAT. See below.

Mainland or free zone

For setup routes, see mainland company formation, free zone company formation and the zone comparison.

What it costs

Costs vary by activity, authority, premises and the number of visas. We do not quote a single figure because none would be accurate. Use the set-up cost calculator for an estimate and read the cost guide for what drives it.

The registrations owners forget

• Corporate tax. Every juridical person must register, even if its income is below the 9% threshold. See corporate tax registration.
• VAT. Mandatory above AED 375,000 of taxable supplies, voluntary above AED 187,500. See the registration threshold.
• UBO declaration. Filed with the licensing authority. See UBO declarations by authority.

Set up accounting from day one

Registrations bring filing duties, and filing needs records. Choose accounting software, a chart of accounts and a monthly routine before the first invoice. See bookkeeping services and bookkeeping for small business.

Mistakes to avoid

• Choosing a free zone and then selling mainly on the mainland.
• Choosing the cheapest licence activity and discovering later that it excludes what you sell.
• Skipping the tax registrations because there is no income yet.
• Leaving the bank account until after the licence is stuck.

AONE advises on structure and on the accounting and tax setup. See business setup in Dubai and choosing business setup consultants for how to choose an adviser.

Sequencing matters more than speed

Authorities publish their own processing times, and they change. Rather than quote a timeline, here is the order in which delays usually occur:

1. Activity approvals. A regulated activity needs an extra approval that can take longer than the licence itself.
2. Premises. A mainland licence needs a tenancy contract first.
3. Bank account. Banks review the ownership, the activity and the source of funds, which takes time even with a licence in hand.
4. Tax registrations. Registering for corporate tax and, if relevant, VAT after the licence is issued.

Documents you should expect to provide

• Passport copies of the owners and managers.
• Proof of address.
• A business plan or activity description for the bank.
• Ownership details for the UBO declaration.
• For a corporate shareholder, its constitutional documents, attested where required.

The first ninety days

After the licence, set up the operating basics: a bank account, accounting software, an invoice template that meets VAT requirements if you are registered, and a calendar with tax and licence renewal dates. A business that puts these in place early avoids the penalties that catch new companies in the first year. See the UAE compliance calendar.

Choosing the licence activity

The activity on the licence controls what you may invoice. A business that sells goods needs a trading activity, and one that provides consulting needs a professional or service activity. Choosing a broader licence than you need costs more, and choosing a narrower one limits you. List what you will actually invoice in the first two years, and choose the licence to match. Some activities need approval from a regulator before the licence is issued, so check this before you commit to premises.

If you have partners

Agree the shareholding, the decision rules and what happens if a partner leaves before signing the incorporation documents. A shareholders' agreement drafted at the start is far cheaper than a dispute later. Record each partner's percentage correctly, because it feeds the UBO declaration and the bank's due diligence.

Budgeting beyond the licence

The licence is the visible cost. Budget also for premises, visas for staff, professional fees, accounting, the annual audit if required, tax registrations and the licence renewal each year. Use the set-up cost calculator for an estimate that includes these.

Frequently asked questions