Dubai is a booming economy boasting world-class infrastructure at the crossroads of East and West. Its thriving business culture offers lucrative opportunities and a conducive environment for growth. If you are looking for business setup in Dubai, it is important to know the type of company you want to set up and the process involved.

Types of Business License for Dubai Business Setup

1. Mainland Company Formation

A mainland company in Dubai is a company licensed to operate without any geographical restriction. This gives them more freedom to trade and participate in government contracts. They are permitted to hold 100% of their company and are free to engage in a greater variety of economic ventures. A mainland company formation in Dubai requires you to get a license from the Department of Economic Development.

  • Ownership for Mainland Company

In the past, foreign investors could only own a maximum of 49% of the company. New rules implemented in June 2021 mean foreign investors can fully own most businesses in Dubai mainland. However, there are still some sectors in which Emirati ownership is required.  

  • Access for Mainland Company

Mainland companies can conduct business freely within the entire UAE and internationally including freezones. 

  • Set up Cost for Mainland Company

Necessities like licenses, permits, visas, etc. contribute to the higher cost of setting up a mainland company in Dubai. You can use a cost calculator to get an estimate for your company. 

  • Office Requirement for Mainland Company

Having a physical office space of a minimum of 200  sq ft. is mandatory for mainland companies. Once the office space is secured, you need to register a tenancy contract, known as “Ejari,” with Dubai’s Land Department.

  • Visa for Mainland Company

While there isn’t a strict limit on visas for mainland companies, the number you can sponsor depends on your office space. Typically, you can sponsor one visa for every 80 square feet of office space you lease.

  • Audit Requirements for Mainland Company

Mainland companies are audited at the end of every financial year.

2. Free Zone Company License

A free zone in Dubai is a designated area that acts like a special economic zone. It offers several advantages like 100% foreign ownership, tax exemptions on import/export duties and corporate income. A company with Dubai Free zone license can operate within the free zone and internationally but can’t access the local UAE market. Free zones typically charge annual fees for maintaining your company registration and license

  • Ownership for Free Zone Company

A business setup in Dubai free zone enjoys 100% ownership of its companies. There is no need for a local sponsor. 

  • Access for Free Zone Company

Free zone companies can’t access the mainland but can operate within the free zone and internationally. With Dubai’s strategic location, these companies are ideal for international trade.

  • Set up Cost for Free Zone Company

Different free zones charge different fees to set up a company. Apart from this, license, registration, office fees, etc make the set-up cost fairly high but lesser than mainland companies. 

  • Office Requirement for Free Zone Company

It is not mandatory to have a physical office. Free zones offer a variety of office options that you can choose according to your company’s requirements.

  • Visa for Free Zone Company

The exact number of visas for a free zone company depends on the specific free zone, but generally, they allow anywhere from 3 to 6 visas per company.

  • Audit Requirements for Free Zone Company

 An audit for a free zone company in Dubai isn’t mandatory in every case but some types of companies are required to be audited periodically. 

3. Offshore Company Formation

Offshore businesses are set up outside the jurisdiction of the UAE. Its tax benefits, increased privacy and flexibility make it particularly advantageous for international business. Even though the companies are set up in an international location, they are still required to be shareholders in a mainland or free zone company.

  • Ownership for Offshore Company

Similar to free zone companies an offshore company formation in Dubai allows foreign individuals or companies to hold 100% ownership with minimal restrictions on nationality.

  • Access for Offshore Company

Despite not having a physical presence in the UAE, offshore companies can do business in the mainland and any free zone. 

  • Set up Cost for Offshore Company

Since offshore companies exist outside the UAE, there is no need for visas or office space. Also, there is no minimum capital requirement which makes it the cheapest option. 

  • Office and Visa Requirements for Offshore Company

Offshore companies are not allowed to have an office in the UAE or issue a resident visa

  • Audit Requirements for Offshore Company

There is no mandatory audit for this type of company and it is entirely up to the company to choose if they want to be audited.

Steps to Set up Your Company in Dubai

  • Determine the Business Environment

Depending on the requirements of your business decide on a business environment. There are various options like mainland, free zone and offshore. Use the information given above to make an informed decision.

  • Choose a Legal Structure

Proceed by researching the legal forms available for your business structure. Popular ones include Limited Liability Companies (LLCs), branch offices, partnerships and sole proprietorships’.

  • Register your Trade Name

Choose a unique name for your business entity that aligns with the naming guidelines of Dubai.

  • Approvals and Licenses

Based on the business activity that you choose, obtain the necessary approvals and licenses to permit.

  • Register with the Department of Economy and Tourism of Dubai

Once you have the initial approvals, apply for the relevant business license through the Dubai Department of Economic and Tourism (DET).

  • Register with the Municipality

Depending on your business nature, you may need to register with the Dubai Municipality.

  • Open a Corporate Bank Account

Once you are done with the registrations open a bank account to manage the finances of your business.

  • Obtain Visas

If your business involves living and working in Dubai, apply for appropriate visas for yourself and your employees.

Consider business setup consultants in Dubai to help you through this process with their expertise operating in the UAE market.

Why Choose Cleritbiz for your Business Setup in Dubai

Starting your dream venture in Dubai has never been easier. Cleritbiz is a leading business consultant that offers business setup services in Dubai along with tax consultancy, corporate legal services and more. With decades of experience in launching successful business empires, Cleritbiz offers customised solutions crafted to kick-start your entrepreneurial journey in Dubai. Book a free consultation with us!

Frequently Asked Questions on Business Setup in Dubai

1. What are the different types of business structures available in Dubai?

Mainland Company: Allows business operations throughout the UAE.
Free Zone Company: Offers benefits like full ownership, tax exemptions, and no customs duties but limits business activities to within the specific free zone.
Offshore Company: Ideal for international business and asset protection, but cannot conduct business within the UAE.

2. What are the key benefits of setting up a business in a Dubai Free Zone?

100% foreign ownership
No personal or corporate income tax
Full repatriation of profits and capital
No import or export duties
Simplified company setup and licensing procedures

3. What is the process of setting up a Mainland Company in Dubai?

Choose a business activity and legal structure.
Reserve a trade name.
Apply for initial approval from the Department of Economic Development (DED).
Draft and notarize the Memorandum of Association (MOA) and Local Service Agent Agreement (if required).
Rent an office and get a tenancy contract.
Submit all documents and pay fees to get the trade license.