To start a business in Dubai, choose a jurisdiction (mainland, free zone or offshore), pick your activities, reserve a trade name, get initial approval, sign the memorandum of association, secure an office or flexi-desk, and then collect your licence, establishment card and visas. Free zone setups often take one to three weeks and mainland setups three to six weeks, according to published consultancy estimates. Once you are trading, register for corporate tax and, if you pass the threshold, VAT.
Business setup Dubai is popular because the process is largely digital, ownership rules have relaxed, and the emirate offers several routes to a licence. The harder part is choosing the right route for what you actually plan to do. A consultancy that sells goods to Dubai shops needs a different structure from a remote software studio or a holding vehicle for investments.
This guide walks through the three structures, the licence types, the steps in order, rough timelines and the tax registrations that follow. It is a starting map rather than a full manual. For costs in AED, see our separate pricing guide, and for the licence itself see our trade licence guide on this site.
Mainland vs Free Zone vs Offshore
The mainland vs free zone decision shapes almost everything else: where you can trade, which licence you hold, which regulator you deal with and how much you pay. Offshore is a third and much narrower option. The table below summarises the main differences using official guidance and published consultancy material.
| Feature |
Mainland (DET) |
Free Zone |
Offshore |
| Regulator |
Dubai Department of Economy and Tourism (DET) |
The individual free zone authority |
JAFZA or RAK ICC (the two commonly cited) |
| Trade inside the UAE market |
Yes, across the UAE subject to the licence |
Generally restricted to the zone unless you add a mainland route |
No domestic commercial activity |
| Foreign ownership |
100% allowed for most activities |
Typically 100% |
100% (JAFZA, per one consultancy guide) |
| Physical premises |
Usually a leased office with a tenancy contract |
Flexi-desk, coworking or office, depending on the zone |
Registered address only |
| UAE residency visas |
Yes |
Yes, usually linked to the package |
Not through the offshore company alone |
| Typical use |
Retail, trading, services to local clients |
Consulting, e-commerce, export, tech |
Holding assets or shares |
Mainland
A mainland company is licensed by DET and can generally serve clients anywhere in the UAE, including government and retail customers. It normally needs a leased office registered through a tenancy contract, and some activities need approvals from other regulators. You can learn how the lease and licence fit together in our trade licence guide, which sits alongside this one.
Free Zone
Free zones are separate jurisdictions with their own authority, rules and packages. They are often chosen by consultants, online businesses and exporters. A company in a free zone is generally restricted from operating outside its zone. Under Dubai Executive Council Resolution No. 11 of 2025, as summarised by CMS, Dubai free zone entities can now apply to DET for an onshore branch licence or a temporary permit, which narrows the old divide.
Offshore
An offshore company is a holding structure. One consultancy guide published in June 2026 says it cannot carry out commercial activity in the UAE domestic market, hire staff who work physically in the UAE, or obtain a residency visa on its own. If you want a visa or local clients, you need a mainland or free zone company instead.
Foreign Ownership Rules On The Mainland
For years, mainland companies needed a UAE national as majority shareholder. That has changed. The UAE government portal explains that Federal Decree-Law No. 26 of 2020 raised the foreign ownership limit from 49% to 100% for onshore companies, and removed the Emirati major-shareholder or agent requirement for companies that non-Emiratis set up. See the official u.ae page on full foreign ownership.
The same page says Dubai Economy permits 100% foreign ownership for more than 1,000 activities, while strategic-impact activities in seven sectors are excluded from that allowance. Eligibility therefore depends on your activity, so check the activity list before you assume you can own the company outright. Some older articles still describe a 51% local partner rule; treat those as out of date for most activities.
Dubai Business Licence Types
A Dubai business license is tied to activities. You choose the activities when you apply, and the licence type follows from them. The categories below come from a May 2026 consultancy overview, so confirm the details for your activity with DET or your chosen free zone.
| Licence |
What it covers |
Notes |
| Commercial |
Trading goods, import and export, retail, wholesale |
Needs a registered office; one guide says a minimum of 200 sq ft |
| Professional |
Consulting, IT, marketing, engineering, training, healthcare |
Often no large premises needed; some arrangements use a local service agent |
| Industrial |
Manufacturing, production, processing |
Tiers by scale; heavier industry needs environmental and safety compliance |
| Tourism |
Travel agencies, tour operators, hospitality |
Needs joint approval from DET and the tourism authority |
| E-commerce, freelance, craft, agricultural |
Online retail, solo professionals, skilled trades, farming |
Smaller, specialised licences with their own conditions |
You can combine several activities on one licence in many cases, but they must be compatible. Regulated activities, such as financial services, healthcare and education, need extra approvals before the licence is issued.
Step By Step: From Idea To Licence
The sequence below reflects DET’s published process for mainland licences, as reported by the Khaleej Times, and general free zone practice. Free zones follow their own forms, but the logic is similar.
- Define the activity and legal form. Decide what you will sell, to whom, and whether you are a sole establishment, a limited liability company or a branch of a foreign company.
- Choose mainland, free zone or offshore. Use the comparison above and the activity list for each jurisdiction.
- Request initial approval. This confirms your activities and any licence partners. The Khaleej Times reports a DET fee of AED 120 for it.
- Reserve a trade name. The name must follow DET naming rules. The same report gives a booking fee of AED 620, with an extra AED 2,000 for an English trade name.
- Prepare the memorandum of association (MOA). This sets out shareholders, capital and management. It can be signed electronically or in person.
- Arrange premises. On the mainland, this means a lease contract. In many free zones, a flexi-desk or coworking desk is bundled into the package.
- Collect external approvals. Needed only for regulated activities.
- Pay fees and receive the licence. Applications run through the Invest in Dubai portal or service centres for the mainland, and through the relevant portal for each free zone.
- Obtain the establishment card. This is required to process visas.
- Apply for visas, Emirates ID and medical clearance. See the visas section below.
- Open a bank account and register for tax. Both are covered later in this guide.
The Khaleej Times also describes an instant licence for activities that need no external approvals, which it says can be obtained within five minutes, and an eTrader licence for home-based sole businesses with limits on who can hold it. Check whether your activity qualifies before relying on either.
| Item |
Documents commonly requested |
| Initial approval |
Passport or ID copy, unified number, residence permit or visa (non-GCC nationals), sponsor NOC if employed by a mainland company |
| Normal licence |
MOA, tenancy or site lease contract, agency approvals where required |
| Branch of a foreign company |
Parent company board resolution, authorisation letter, commercial registration certificate, MOA and trade licence |
Typical Timelines
Timelines vary by activity and by how quickly your documents are ready. One consultancy cost guide dated July 2026 estimates free zone setup at one to three weeks and mainland setup at three to six weeks, depending on activity approvals and paperwork. Some free zones advertise much faster digital licences, so ask for the zone’s current service times in writing. Banking is often the slowest part, as the next section explains.
Visas, Establishment Card And Banking
Most owners want a residence visa. A company needs an establishment card first. After that, each investor, partner or employee typically goes through a visa application, a medical fitness test and an Emirates ID. Government costs are covered in our companion pricing guide.
Free zone packages usually include a set visa allocation, and the number you can sponsor often depends on the size of your office or desk. A mainland company’s visa quota usually depends on its office size and activity.
Bank accounts need patience. Banks will ask about your business purpose, your customers, your sources of income and your ownership. One consultancy guide says offshore account verification can take from a few weeks to several months, while its free zone benchmark is a few days for registration and a few more for bank verification. Prepare a business plan, contracts or invoices, and clear beneficial owner details before you apply.
Corporate Tax And VAT Basics
Two federal taxes matter for most new companies. Check the Federal Tax Authority (FTA) at tax.gov.ae for the latest rules, because details and deadlines change.
| Tax |
Key points |
| Corporate tax |
0% on taxable income up to AED 375,000 and 9% above that. Companies established on or after 1 March 2024 generally register within three months. Returns are generally due within nine months of the end of the tax period. A missed registration deadline can bring an AED 10,000 penalty. (Source: Gulf News summary of FTA rules.) |
| Free zone corporate tax |
A Qualifying Free Zone Person may get 0% on qualifying income, while non-qualifying income is generally taxed at 9%. Free zone companies generally still register and file. |
| Small Business Relief |
Available to eligible resident persons with revenue up to AED 3 million, for tax periods ending on or before 31 December 2029. A return is still required. |
| VAT |
Standard rate 5%. Mandatory registration when taxable supplies and imports exceed AED 375,000 in 12 months or are expected to in the next 30 days; voluntary registration from AED 187,500. Late registration can carry an AED 10,000 penalty (per a consultancy guide to FTA rules). |
The FTA’s own tax portal currently shows a deadline of 30 September 2026 for returns covering the year ended 31 December 2025. Returns and registrations run through EmaraTax, and the FTA says its services are available through UAE Pass.
Common Mistakes
- Choosing by price alone. A cheap free zone licence is no use if your customers are in Dubai mainland and you cannot invoice them directly.
- Picking the wrong activity. A mismatch between activity and licence can block bank accounts and contracts.
- Relying on old ownership rules. The 51% local partner rule no longer applies to most mainland activities.
- Ignoring tax registration. Corporate tax applies to free zone companies too, and penalties are fixed amounts.
- Underestimating banking. Start the bank conversation early and keep your documents consistent.
- Forgetting renewals. One consultancy guide says licences expire after a year and quotes a late penalty of AED 250 per day, so verify with your authority and diarise the date.
Getting Professional Help
Many founders use a local specialist to handle forms, translations and approvals. If you do, compare scope, not just price. Our guide to business setup consultants in Dubai lists providers worth shortlisting. Ask each one:
- Which jurisdiction do you recommend for my activity, and why not the alternatives?
- Which costs are government fees and which are yours?
- What is excluded: visas, Emirates ID, medical tests, bank introductions, renewals?
- Who holds the licence documents, and can I access the portal myself?
Once you are licensed, you will want customers. Our guide to digital marketing agencies in Dubai can help you find a partner for the launch. For more local guides, browse the Dubai services hub.
Frequently Asked Questions
How do I start a business in Dubai as a foreigner?
Foreigners can set up a mainland company with up to 100% ownership for many activities, a free zone company, or an offshore holding company. You choose activities, reserve a trade name, get initial approval, sign the MOA, arrange premises and pay the licence fees. Residence visas then follow through the establishment card. Confirm that your activity is open to full foreign ownership before you apply.
What is the difference between mainland vs free zone in Dubai?
A mainland company is licensed by DET and can generally trade across the UAE. A free zone company is licensed by its zone authority and is generally restricted to operating within the zone, though Dubai now has an onshore branch and temporary permit route for free zone entities. Free zones often bundle desks and visas into packages.
How long does company formation in Dubai take?
One July 2026 consultancy guide estimates one to three weeks for free zones and three to six weeks for the mainland, depending on approvals and paperwork. Some free zones offer faster digital licences. Bank account opening can take longer than the licence itself, so plan for it separately.
Can I start a business in Dubai without an office?
It depends on the route. Many free zones allow a flexi-desk or virtual arrangement as part of the package, and some professional licences do not need large premises. Mainland commercial activities normally need a leased office with a tenancy contract. Always confirm the premises requirement for your exact activity.
Do I have to pay corporate tax in Dubai?
Yes, UAE corporate tax applies to most businesses, including free zone companies, although rates and relief differ. The headline rate is 0% on taxable income up to AED 375,000 and 9% above it. Qualifying free zone income may be taxed at 0%. Check the FTA for the latest rules.
When do I need to register for VAT in the UAE?
Registration is mandatory when your taxable supplies and imports exceed AED 375,000 over the previous 12 months or are expected to in the next 30 days. Voluntary registration is possible from AED 187,500. You apply through EmaraTax, and the FTA publishes the current rules and penalties.
Can a free zone company work in mainland Dubai?
Under Executive Council Resolution No. 11 of 2025, Dubai free zone entities may apply to DET for an onshore branch licence or a temporary permit for certain activities. Approvals from DET and other regulators apply, and onshore income may be taxed at 9%. Details were still developing when the resolution was summarised, so check with DET.
Do I need a UAE partner to open a company in Dubai?
For most activities, no. The UAE government says onshore companies set up by non-Emiratis can be 100% foreign owned and no longer need an Emirati major shareholder or agent. A small group of strategic-impact activities is excluded, so check your activity against the current list.
The Short Version
- Choose between mainland, free zone and offshore based on where your customers are and whether you need a visa.
- Most mainland activities now allow 100% foreign ownership, but strategic-impact sectors are excluded.
- The core steps are initial approval, trade name, MOA, premises, licence, establishment card and visas.
- Expect roughly one to three weeks for a free zone and three to six weeks for the mainland, with banking often the slowest step.
- Corporate tax is 0% up to AED 375,000 and 9% above, and VAT registration starts at AED 375,000 of taxable supplies.
- Information only: confirm current figures and rules with DET, your free zone and the Federal Tax Authority before you commit.
