Business Setup Dubai
How Do You Set Up a Business in Dubai — and Should You Choose Mainland or Free Zone?
Dubai offers two primary business setup jurisdictions: mainland (licensed by the Department of Economy and Tourism) and free zones (each governed by their own authority) — and the right choice depends entirely on your business activity, target market, and operational needs. Both routes allow 100% foreign ownership across most activities following UAE Companies Law reforms. Understanding the structural differences before you apply will save time, money, and legal complications down the line.
This guide walks through the mainland vs free zone comparison, the step-by-step setup process, key documents, visa eligibility, and answers to the most common questions from investors setting up in Dubai. You can also explore our full range of business setup services.
Mainland vs Free Zone — Which Is Right for Your Business?
| Factor | Mainland (DET-Licensed) | Free Zone |
|---|---|---|
| Foreign ownership | Up to 100% for most activities (subject to activity list) | 100% foreign ownership |
| Trade within UAE market | Unrestricted — can trade directly with any UAE customer or government | Trade with mainland requires a local distributor or mainland branch for most activities |
| Physical office requirement | Physical office space required (flexi-desk or full office depending on activity) | Flexi-desk or virtual office often permitted for certain licence types |
| Government contracts | Eligible | Generally not eligible without a mainland presence |
| Regulatory body | Department of Economy and Tourism (DET), Dubai | Individual free zone authority (DMCC, JAFZA, DIFC, IFZA, etc.) |
| Corporate Tax | Standard 9% CT above AED 375,000 taxable income | Qualifying Free Zone Persons may benefit from 0% on qualifying income |
| Import/export | Import duty applies on goods entering UAE | Many free zones offer duty deferral or exemption for goods re-exported |
| Typical setup timeline | 3–7 working days for most standard activities | 1–5 working days for many free zones |
The right jurisdiction is activity-specific. A consultancy targeting UAE government clients needs a mainland licence. A trading company focused on re-export may benefit from a free zone with customs advantages. A financial services business may require a DIFC or ADGM licence given sector-specific regulation.
What Business Activities Are Permitted in Dubai?
Dubai’s DET maintains a comprehensive list of permitted commercial, professional, industrial, and tourism-related activities. Each licence is issued for one or more defined activities, and trading outside your licensed activities is a regulatory violation. Some activities — including banking, insurance, healthcare, education, and legal services — require additional approvals from sector regulators before or alongside the trade licence application.
What Are the Steps to Set Up a Business in Dubai?
- Choose your legal structure — the most common for foreign investors are the Limited Liability Company (LLC) for mainland setups, or a Free Zone Company (FZC/FZE) or Branch for free zone setups.
- Select and reserve your trade name — the name must comply with DET or the relevant free zone authority’s naming conventions. Offensive terms, religious references without approval, and existing registered names are not permitted.
- Define your business activity — select the activity or activities that match your intended operations from the authority’s approved list.
- Choose a business address — mainland businesses require a valid tenancy contract (Ejari registered for Dubai). Free zones often offer flexi-desks, co-working spaces, or warehouse units depending on the activity.
- Submit initial approval application — for mainland, this is submitted to DET; for free zones, to the relevant authority. Some activities require pre-approval from external regulators at this stage.
- Draft and notarise the Memorandum of Association (MOA) — required for LLCs and other multi-shareholder structures. For free zone entities, equivalent constitutional documents are executed through the free zone authority.
- Pay licence fees and receive the trade licence — fees vary by activity, legal structure, and authority. Your trade licence is the primary document authorising you to operate legally in Dubai.
- Open a corporate bank account — required for business operations. UAE banks conduct thorough KYC due diligence; having a clear business plan and proper documentation significantly speeds up approval.
- Register for Corporate Tax and VAT (where applicable) — CT registration is mandatory for all entities; VAT registration is mandatory once taxable supplies exceed AED 375,000.
What Documents Are Required to Set Up a Business in Dubai?
- Passport copies of all shareholders and directors
- Emirates ID (if shareholders are UAE residents)
- Proposed trade name options (at least two or three)
- Description of intended business activity
- Tenancy contract or Ejari (mainland) or signed free zone office agreement
- Memorandum and Articles of Association (drafted and notarised for LLCs)
- No Objection Certificate from current UAE employer (if shareholder is on an employment visa)
- Bank reference letter (required by some authorities)
How Many Visas Can a Dubai Business Sponsor?
The number of employee and investor visas a Dubai business can sponsor depends on the size of the physical office space and the nature of the licence. Mainland businesses with larger office space can typically sponsor more visas. Free zones set their own visa quotas per package, with some entry-level packages permitting one or two visas and larger office packages allowing significantly more. Investors and shareholders can typically obtain investor or partner visas. Employees are sponsored under employment visas linked to the company’s establishment card.
UAE residency visas are generally valid for two or three years (depending on the visa type) and are renewable. Family members can be sponsored once the primary visa holder meets the minimum salary or investment criteria set by immigration authorities. Learn more on our insights page.
What Is the Difference Between an Investor Visa and an Employment Visa in Dubai?
An investor or partner visa is issued to company shareholders or partners and does not require a minimum salary. An employment visa is issued to employees, requires an employment contract, and must comply with Ministry of Human Resources and Emiratisation (MOHRE) requirements for mainland businesses. Employment of staff in free zones is governed by the respective free zone authority.
Frequently Asked Questions — Business Setup Dubai
Can a foreigner own 100% of a business in Dubai?
Yes, for most business activities. The UAE amended its Companies Law in 2021 to allow 100% foreign ownership in many onshore/mainland activities. Some strategic sectors retain specific ownership requirements. Free zones have always permitted 100% foreign ownership.
How long does it take to set up a company in Dubai?
A standard mainland LLC with a straightforward activity can be incorporated in as little as three to seven working days once all documents are in order. Free zone setups can sometimes be completed in one to three working days. Activities requiring external regulatory approvals take longer.
What is the difference between a mainland and a free zone company in Dubai?
A mainland company is licensed by the DET and can trade anywhere in the UAE without restrictions. A free zone company operates within a specific free zone and may face restrictions on direct sales to the UAE mainland market without a local distributor or separate mainland presence.
Do I need to be physically present in Dubai to set up a company?
Many free zones allow remote company formation with notarised and attested documents. Mainland LLC formation typically requires in-person notarisation of the MOA in Dubai, though some steps can be handled by a licensed business setup agent with a power of attorney.
What is the minimum capital requirement for a Dubai LLC?
There is no statutory minimum share capital requirement for most standard LLC activities in Dubai under current regulations, though some regulated activities (banking, insurance, etc.) specify minimum capital requirements. The MOA must state a capital amount, and the capital must be held in the company’s bank account.
Can my Dubai company sponsor my family’s visas?
Yes. Once you hold an investor or employment visa linked to your Dubai company, you can typically sponsor a spouse and children’s residence visas, subject to meeting the minimum salary or investment thresholds set by the General Directorate of Residency and Foreigners Affairs (GDRFA).
Do free zone companies pay Corporate Tax in the UAE?
Yes, free zone companies must register for Corporate Tax and file returns. However, Qualifying Free Zone Persons may benefit from a 0% rate on their Qualifying Income, provided they meet specific conditions including adequate substance, compliance with transfer pricing rules, and not having elected to be subject to the standard CT regime.
Contact Qaspro Global for a free consultation on WhatsApp +971 55 153 9679. Our business setup specialists manage the entire process — from trade name reservation and document preparation to bank account opening, tax registration, and visa applications — so you can focus on your business from day one.