If you’re itching to turn an idea into a real company, Dubai makes the start line feel…close. The city blends quick digital government services, a wild mix of customers from every corner of the world and straightforward immigration and banking once you’ve got your paperwork in order. Add in founder-friendly licensing options and you’ve got a genuinely workable runway for first-time entrepreneurs and seasoned builders alike.
Mainland vs free zone vs offshore in Dubai
Before you click any “Apply” buttons, decide where your company should live: mainland (onshore under Dubai’s Department of Economy & Tourism, a.k.a. DET), a free zone (e.g., DMCC, IFZA, Meydan FZ, RAKEZ, etc.) or offshore (holding/asset structures, not for trading in the UAE). Mainland shines if you want to sell across the UAE without a distributor; free zones shine for simplified setup, lower overhead (think flexi-desks) and sector hubs. Official UAE guidance outlines the steps for both mainland and free zones so you can compare with confidence. Get details about Business Setup in Dubai.
Choose your business activity (this affects everything)
Search the official activity lists and pick the one(s) you’ll actually do—consulting, e-commerce, software, F&B, media and so on. Your activity controls your license type, possible extra approvals and even whether you need physical space. The UAE’s own portal starts with this step for a reason.
Pick the right legal structure in Dubai
For startups, the go-to is usually a Limited Liability Company (LLC) on the mainland or a Free Zone LLC (FZ-LLC) inside a free zone. Sole establishment and civil company options exist for certain professions and branches can work if you’re expanding from abroad. Again, the government’s sequence of steps—activity → legal form → name—keeps you on the rails.
Understand 100% foreign ownership (and the exception)
Since 2021 most mainland activity permit 100% foreign ownership—no local partner required—thanks to changes in the Commercial Company Law. That said a short list of strategic activities still has specific national participation requirements so double-check if you’re in a sensitive niche. Looking for a
Reserve your trade name in Dubai (fast and online)
Next, lock your company name. Dubai’s official Invest in Dubai portal lets you reserve a trade name online, with guidelines on what’s allowed and what’s not (no confusing lookalikes, restricted terms, etc.). It’s quick and typically the same day.
Get initial approval (the “green light” to proceed)
Initial Approval is basically the government saying, “We don’t object to your plan.” You confirm activities, legal form and partners; then you’re cleared to draft your corporate documents and collect any extra approvals. You can start this on the same Invest in Dubai portal.
Draft your MOA (and any service agent agreements)
Your Memorandum of Association (MOA) spells out shareholders, capital and governance. Some professional licenses may still use a Local Service Agent (LSA) arrangement, depending on the activity and structure. This bit sounds formal because… it is. Follow the UAE’s official sequence here and get the MOA notarised when prompted.
Choose an office solution (or a flexi-desk)
Licensing authorities will ask where you “sit.” For lean startups, a flexi-desk or shared office in many free zones checks the box. On the mainland, you’ll typically provide a lease (Ejari). If you’re fully remote today, start minimal; you can always upgrade space when hiring ramps.
Issue your trade license (the moment it’s real)
This is the part you’ll want to screenshot. Once documents are in and fees are paid, Dubai often issues a license the same day—and some services say minutes, not days, for straightforward applications completed online. The DET and Invest in Dubai walk you through it end-to-end.
Know the Dubai Unified License (DUL) ID
Dubai is rolling out Dubai Unified License (DUL)—a single commercial identifier used across agencies & service providers. You’ll still get your normal license, but the DUL number simplifies interactions with banks, utilities and partners over time.
File your UBO (Ultimate Beneficial Owner) details
After licensing, companies must keep a Real Beneficiary/UBO register and file details with the registrar/licensing authority—this is part of the UAE’s AML push and applies to most mainland and free-zone entities. Put this on your compliance checklist from Day 1.
Open a corporate bank account (prepare for KYC)
Banks will ask for your trade license, shareholders’ IDs, proof of address, business plan and explanations of expected flows (source of funds, counterparties, geographies). Dubai is actively linking government and banks to make this smoother, but it’s still a diligence-heavy step—budget time for it. Get details about Bank Account Opening Service in Dubai.
Register for tax: Corporate Tax (CT) and VAT
Two quick must-know:
- Corporate Tax applies to financial year starting on/ after 1 June 2023 (standard rate 9% for most company with special rule for qualifying free-zone entity as well as large multinational).
- VAT registration is mandatory at AED 375,000 in taxable supply; however voluntary registration kick in at AED 187,500. Check the official guidance before you cross threshold.
Sort visas and labour cards (when you start hiring)
With the license in hand, you’ll open immigration and labour files, then sponsor residence visas for founders and staff. Free zones typically include visa quotas; mainland firms set quotas with MOHRE. Pro tip: start founder visas early so you’re ready for bank meetings and travel.
Snapshot: setting up inside a free zone
If you choose a free zone, the workflow mirrors mainland—pick activity, choose legal entity, name reservation, approvals and license—often bundled into neat packages with co-working or flexi-desk options. Each zone has its twist (tech, media, crypto, trade), so compare benefits and sector fit.
Special permits worth knowing (e-commerce & home-based)
For micro online sellers, Dubai has niche options like the eTrader (home-based social selling), but note that eligibility is limited to UAE/GCC nationals residing in Dubai—it’s not a universal founder license for foreign non-residents. Always verify rules with the official portal.
Typical timeline and costs (the honest version)
If your activity is standard, your documents are clean and you’re using a free zone or Invest in Dubai, you can get the license extremely fast—fees vary by activity & zone and the bank account can be the longest pole due to compliance checks. Plan a lean first year budget that covers licensing, workspace, visas and a buffer for banking/attestation surprises.
Common mistakes first-time founders make in Dubai
Rushing the activity selection (and needing amendments later), skipping UBO filing, underestimating bank KYC time, ignoring lease requirements and forgetting that some activities require extra approvals (media, health, education). Slow down a beat on those parts and you’ll move faster overall.
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Quick startup checklist for Dubai (save this!)
Pick activity → choose mainland/free zone → confirm 100% ownership eligibility → name reservation → initial approval → MOA/attestations → lease/flexi-desk → license issuance → UBO filing → bank account → tax registrations → visas → launch. Keep all receipt and approval in one shared folder—future-you will thank you.
Dubai rewards clarity and momentum
Dubai is systems-driven. If you follow the official sequence and stay tidy with documents, the city responds—fast. Start with the smallest viable license and workspace, get your first revenue and then layer on visas, bigger offices & secondary activities. It’s a great place to build, especially if you like speed.
FAQs
Costs vary by activity, mainland vs free zone and workspace (flexi-desk vs office). Budget for government fees, name reservation, initial approval, license issuance and later visas/banking. Many straightforward licenses can be issued very quickly via Invest in Dubai/DET.
For most activities, no—100% foreign ownership is allowed on the mainland. Some tactical activities still have national participation rules so confirm your exact activity before filing.
Mandatory VAT registration kick in at AED 375,000 in taxable supplies whereas voluntary registration is available from AED 187,500. Check FTA guidance for edge cases.
The UAE’s Corporate Tax rule apply for financial year starting on/ after 1 June 2023 with 9% standard rate (special rule for free-zone qualifiers and large multinationals). Review MOF resources before your first fiscal year end.
If you’ll sell across the UAE and want no geographic limits, mainland is flexible. If you want bundled setup, sector communities and lighter overhead, a free zone can be ideal—compare zone perks against your go-to-market.