Business Setup in UAE: The Ultimate Guide for Foreigners

Q: What are the requirements for UAE company formation?

The requirements for UAE company formation are as follows:You must be the owner or a shareholder in a registered UAE business.You must obtain a valid trade license from the DED or relevant Free Zone Authority.You must have proof of your financial resources to support yourself, dependents, and the business.

Business setup in the UAE is becoming a popular and sought after option for entrepreneurs and investors. The UAE’s growing economy and various visa programs for business owners are only making the UAE more prevalent for investors.

In this guide you will learn about:

The benefits of starting a business in the UAE
Visa options for starting a business in the UAE
Types of businesses in the UAE
Requirements to start a business in the UAE
Document requirements for starting a business in the UAE
Business setup in the UAE: step by step
Cost of starting a business in the UAE
Corporate taxes in the UAE
Best places to start a business in the UAE

The Benefits of Starting a Business in the UAE

Strategic location

Situated at the crossroads of Asia, Africa, and Europe, the UAE offers access to major global markets. Its ports and logistics infrastructure make it a vital hub for international trade and commerce.

Tax-free environment

The UAE provides an attractive tax regime for businesses. Most businesses enjoy 0% corporate tax for profits under AED 375,000 or 9% on anything above the threshold, which is still significantly lower compared to other countries. The UAE remains one of the most tax-friendly countries globally.

Ease of doing business

The UAE is one of the easiest countries to do business in the world. The streamlined processes, government incentives and policies, and free zones make the UAE ideal for business setup.

Robust economy

The UAE has a growing and resilient economy, with a variety of thriving sectors, including real estate, energy, and technology. The UAE GDP has grown from $349 billion in 2020 to $545 billion in 2024. Starting a business in the UAE now is predicted to be a solid investment, with the GDP predicted to grow to a staggering $712 billion in 2029.

World-class infrastructure

The UAE predicted its own significant growth, ensuring world-class infrastructure is in place for all business types in the UAE. From state-of-the-art office spaces and modern technology to cutting edge transportation systems, the UAE is poised to invite all business initiatives looking to get started.

Residency benefits

There are a variety of residency options for business owners available in the UAE. These come with fantastic opportunities for families to join, as well as all the benefits that come with UAE residency. It may also be possible to obtain UAE citizenship through some of the programs if all requirements are met.

Visa Options for Starting a Business in the UAE

UAE Residency Through Company Formation

The UAE Residency by Company Formation program allows foreign investors and entrepreneurs to live and work in the UAE by starting a business. This program is popular because it offers significant benefits, such as 100% foreign ownership in Free Zones and attractive tax advantages.

In Free Zones, investors can fully own their businesses without needing a local partner, which is a unique advantage compared to many other countries. The UAE also has a tax-friendly environment, with no personal income tax and no corporate tax for eligible businesses.

The UAE Residency Through Company Formation program allows investors to obtain a residency visa valid for two years, with the option to renew. This visa allows investors to live and work in the UAE and sponsor their family members.

UAE Golden Visa

The UAE Golden Visa program offers long-term residency for talented individuals, investors, and skilled professionals from around the world. Introduced in 2019, this program allows eligible people to live, work, and study in the UAE without needing a local sponsor. The visa is available for 5 or 10 years and can be renewed.

The main goal of the Golden Visa is to make the UAE a global hub for business, innovation, and talent by attracting people who can drive growth in areas like technology, healthcare, education, and entrepreneurship.

Golden Visa holders enjoy longer residency periods, providing greater stability and reducing the hassle of frequent renewals. They can also sponsor their immediate family members, such as spouses and children, enabling families to live together in the UAE.

A key benefit of the Golden Visa is the option for self-sponsorship, which means holders don’t need a local sponsor or employer. This flexibility is especially appealing to entrepreneurs and investors who want to start or grow their businesses in the UAE.

Read our UAE Golden Visa Guide

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Types of Businesses in the UAE

Free Zone Companies

Free Zones in the UAE are set up to invite foreign investors to start a business in the UAE. Each zone offers a business-friendly environment, with unique advantages, including tax incentives and ease of startup.

Popular Free Zones in the UAE

Jebel Ali Free Zone (JAFZA)
Dubai Multi Commodities Centre (DMCC)
Dubai Internet City (DIC)
Dubai Silicon Oasis (DSO)
Khalifa Industrial Zone (KIZAD)
Masdar City Free Zone
Sharjah Media City (Shams)
Hamriyah Free Zone
Fujairah Free Zone
RAK Economic Zone (RAKEZ)

The Free Zones in the UAE are ideal for startup businesses that are focused on international markets and don’t require direct trade with the UAE mainland. The business is not required to have a physical office, and the company can be 100% owned by a foreign national.

Free Zone business nature

There are a variety of business options available in the UAE Free Zones, some include:

eCommerce
Industrial
Consultancy Services
Media
Manufacturing
Warehousing
Educational
Innovation
Commercial Trade

Mainland Companies

Mainland companies in the UAE are businesses licensed to operate across the entire UAE market, including Free Zones and the mainland. These companies are regulated by the Department of Economic Development (DED) in the respective Emirate where the business is established.

A new benefit here is that many mainland companies are now permitted to have 100% ownership from foreign nationals. This was not possible previously, but it should be noted that this is only in specific sectors, so it’s important to do your research. Reaching out to a local corporate lawyer can come in handy here to see what the options are for your prospective business.

There are no geographical limitations for mainland companies, however, companies are required to have a physical company in the UAE.

Some popular business types under the mainland company option include:

Limited Liability Company (LLC): Suitable for most commercial activities.
Sole establishment: For individual professionals or service providers.
Branch of a foreign company: Allows foreign companies to expand into the UAE mainland.

Types of economic licenses for mainland companies in the UAE

There are six main types of economic licenses for mainland companies in the UAE, including:

Professional
Industrial
Agricultural
Tourism
Commercial
Occupational

Offshore Companies

Offshore companies are primarily for international trading and asset protection. They cannot operate within the UAE but benefit from tax exemptions and privacy. There are no physical office requirements and confidentiality is a top priority. Some popular offshore areas in the UAE include:

Jebel Ali Free Zone Offshore (Dubai)
Ras Al Khaimah International Corporate Centre (RAKICC)

Requirements to Start a Business in the UAE

To start a business in the UAE, foreign investors must meet the following requirements:

Obtain a local sponsor: Businesses in certain sectors outside Free Zones require a local sponsor or partner who holds 51% ownership. In contrast, Free Zones allow 100% foreign ownership.
Legal structure: Choose a business structure that suits your goals, such as an LLC, branch office, or Free Zone company.
Trade license: Obtain the appropriate trade license for your activity, such as commercial, industrial, or professional.
Office space: Secure a physical office or flexi-desk in the chosen jurisdiction (essential for mainland companies).
Minimum capital: Capital requirements vary depending on the business type and jurisdiction. Ensure you have the required funds available to start a business in the UAE.

Document Requirements for Starting a Business in the UAE

Foreign investors must submit the following documents before starting a business in the UAE:

Passport copies: Owners and shareholders’ passports required
UAE visa copies: For all shareholders
Proof of address: Bill or tenancy contract with the correct address
Business plan: A detailed plan outlining the business’s purpose and financial projections.
Memorandum of Association (MOA): Outlining the company’s ownership structure and operations.
Trade name approval: Confirmation of the business name from the Department of Economic Development (DED) or Free Zone authority.

Business Set Up in the UAE: Step by Step

Here is the step-by-step process for registering a business in the UAE:

Step one: Select a business activity: Select the type of business that best suits your needs and objectives.
Step two: Choose a jurisdiction: Depending on the type of business you want to start in the UAE you may wish to operate in a Free Zone or the mainland.
Step three: Reserve a trade name: It is essential to register a trade name for a business with the Ministry of Economy and pay the AED 750 fee.
Step four: Obtain initial approval: Obtain the preliminary approval for the business activity.
Step five: Prepare legal documents: It’s best to obtain a local corporate lawyer to draft and notarize the Memorandum of Association (MOA) or local service agent agreement.
Step six: Obtain office space: If you are applying for a mainland business you will need to secure an office space.
Step seven: Apply for the trade license: All businesses in the UAE are required to obtain a trade license through the Free Zone authority or Department of Economic Development.
Step eight: Open a UAE corporate bank account: Once you have approval and obtain your trade license you are free to open a corporate bank account in the UAE.

Cost of Starting a Business in the UAE

The cost of starting a business in Dubai as a foreigner varies dramatically based on the type of company, location, legal requirements, and types of government involvement.

For example, a Free Zone company generally requires anywhere between AED 15,000- AED 50,000, while a mainland company ranges between AED 20,000- AED 60,000. However, this varies on a case-by-case basis as there is no set minimum amount needed to start a business in the UAE.

Corporate Taxes in the UAE

The UAE’s tax regime is highly favorable. The corporate tax rate is 9% on profits exceeding AED 375,000 and 0% below this threshold.

The standard VAT rate is 5% and applies to most goods and services. Additionally, there is no personal income tax, meaning employees and business owners are exempt from personal income ta

Best Places to Start a Business in the UAE

Dubai

Dubai is one of the best places to start a business in the UAE for industries like tourism, trade, and finance. Dubai is also home to over 30 Free Zones, making it inviting for startups.

Dubai is the most popular city in the UAE, offering world-class infrastructure and a strategic location for business dealings.

There are also business setup consultants in Dubai. These consultants can help guide you through every step of the process, offering tailored advice for business owners. Many companies also offer business setup services in UAE Free Zones, allowing foreign investors to fully own their business without the need for a local partner. Additionally, these consultants can help investors look for low-cost business setup in Dubai.

Abu Dhabi

Abu Dhabi is a prime location for those in the energy, education, and finance sectors. There are a range of business-friendly Free Zones, making it appealing for foreign nationals.

The city is highly focused on innovation and sustainability. This combined with the modern infrastructure sets any new company in the UAE up for success from the get-go.

Ras Al Khaimah

Ras Al Khaimah is an ideal location for businesses seeking cost-effective options in the UAE. The RAK Economic Zone (RAKEZ) offers flexible licensing solutions for sectors like manufacturing, tourism, and trade.

This, along with the natural beauty and business-friendly environment, RAK combines affordability with a highly business-oriented focus.

Fujairah

If you’re wanting to get into shipping and logistics, Fujairah is one of the best business locations in the UAE. Located on the east coast of the UAE, it offers investors direct access to the Indian Ocean, acting as the gateway between the UAE and lucrative global markets.

Frequently Asked Questions About Business Setup in UAE

How much does it cost to set up a business in the UAE?

The cost to set up a business in the UAE depends on a range of factors. Starting a small company in a Free Zone can cost significantly less than a big mainland corporation. For example, a Free Zone company requires anywhere between AED 15,000- AED 50,000, while a mainland company ranges between AED 20,000- AED 60,000.

How do I set up a business in the UAE?

To set up a business in the UAE, choose a business activity, select a jurisdiction (mainland, free zone, or offshore), and obtain the necessary trade license. You’ll also need to reserve a trade name, secure office space, and prepare legal documents like the Memorandum of Association (MOA). Once approved, you can register your company, apply for visas, and open a corporate bank account.

Can a foreigner set up a company in the UAE?

Absolutely, foreign nationals are welcome to set up a company in the UAE. In fact, recent regulation changes have now made it possible for foreigners to start a business in certain mainland areas without the need for a local sponsor.

What are the requirements for UAE company formation?

The requirements for UAE company formation are as follows:

You must be the owner or a shareholder in a registered UAE business.
You must obtain a valid trade license from the DED or relevant Free Zone Authority.
You must have proof of your financial resources to support yourself, dependents, and the business.

Can a foreigner start a business in the UAE?

Yes, a foreigner can start a business in the UAE. The UAE Government has made things significantly easier for potential business owners and entrepreneurs, starting the UAE Residency Through Company Formation program, whereby foreign nationals can apply quickly and without hassle.

What are the legal structures available for company formation in the UAE?

There are various legal structures available for company formation in the UAE, including Free Zone companies, LLCs, Mainland companies, offshore companies, a branch office, a sole establishment, a private joint stock company, and a public joint stock company.

How to start a business in UAE as a foreigner?

Here are the basic steps for starting a business in the UAE:

Choose a business activity: Decide on the type of business you want to set up.
Select a jurisdiction: Pick between mainland, free zone, or offshore, depending on your business needs.
Register a trade name: Reserve a unique trade name with the relevant authorities.
Obtain a trade license: Apply for the appropriate license based on your business activity.
Secure office space: Get a physical office or flexi-desk, depending on the jurisdiction.
Prepare legal documents: Draft and notarize the memorandum of association (MOA) and other required documents.
Open a bank account: Set up a corporate account to handle business finances.

What is the minimum investment required to start a business in Dubai?

There is no specific minimum investment amount, it depends on the type of business and the jurisdiction. It’s important to make sure you have the minimum investment amount for your specific circumstances before registering your company in the UAE. The jurisdiction authorities will have detailed information on the minimum investment amounts.

What are the benefits of Dubai company setup packages?

Dubai business setup services make starting a business easier and more affordable. They bundle everything you need, like licensing, registration, visa processing, and office space. The business consultants also assist with legal paperwork, such as preparing documents and registering your trade name.

How can I register a company online in the UAE?

For online company registration in UAE, you can visit the relevant government portal or the website of the Free Zone where you wish to set up your business. Depending on the jurisdiction (mainland, free zone, or offshore), you’ll need to apply for initial approval, choose a business name, and pay the necessary fees.