Topic Summary
Choose Between Mainland and Free Zone
Mainland licenses (issued by DET) let you sell to all UAE customers and bid for government contracts, while free zone licenses suit international trade and remote services. Your customer base and where you plan to operate should drive this decision.
100% Foreign Ownership Is Now Standard
Following the 2021 Commercial Companies Law amendment, foreign founders can own 100% of a mainland company in most sectors. Free zones have always permitted full foreign ownership across all activity types.
Understand the Corporate Tax Landscape
The UAE applies a 9% corporate tax on taxable income above AED 375,000 for mainland companies. Qualifying free zone companies can retain a 0% rate, making the free zone route attractive for internationally focused businesses.
Free Zone Setups Can Close in Days
Most free zone applications complete in just 3 to 5 working days, compared to 1 to 3 weeks for a typical mainland license. The entire process can be completed remotely, with no requirement to travel to Dubai.
Your Trade License Defines Your Legal Activity
The activity listed on your trade license, such as General Trading, is the only one your company can legally carry out without additional approval. Reviewing the full activity list on the relevant authority's portal before applying helps avoid costly amendments later.
Know the Key Documents Before You Start
Core requirements include a trade license, a Memorandum of Association outlining ownership and structure, and an establishment card as your company's official ID. Most free zones set no minimum share capital, lowering the barrier for new founders.
Dubai Issues Over 30,000 Licenses Annually
Dubai alone grants more than 30,000 new business licenses each year, supported by over 40 active free zones across the UAE. This scale means founders have a wide range of zone options, each with its own activity list and fee structure.
In 2026, the UAE hosts more than 40 active free zones, and Dubai alone issues over 30,000 new business licenses each year (Dubai Chamber, 2024). Foreign founders can now own 100% of a mainland company in most sectors, following the 2021 Commercial Companies Law amendment (u.ae, 2024). Corporate tax sits at 9% for taxable income above AED 375,000, but qualifying free zone companies can pay 0% (Federal Tax Authority, 2024). Most free zone setups complete in 3 to 5 working days. The whole process, from choosing your activity to holding a trade license, can happen without you setting foot in Dubai.
This guide walks you through every stage you need to know to set up a new business in Dubai: picking the right structure, getting your license, opening a bank account, and staying on the right side of the rules. Whether you are based in New York or Los Angeles, you will leave this page knowing exactly what to do next.
What It Means to Set Up a New Business in Dubai
Setting up a new business in Dubai means registering a legal company with a UAE trade license, choosing between a mainland or free zone structure, and getting approval from the right authority. The process covers your business activity, company name, ownership structure, office space, and visa entitlement. Get these right at the start and the rest moves quickly.
The Two Main Setup Paths
There are 2 routes when you set up a new business in Dubai.
Mainland: licensed by the Dubai Department of Economy and Tourism (DET). You can sell to anyone in the UAE, including government bodies.
Free zone: licensed by a specific free zone authority. Best for international trade, remote services, and businesses that do not need a UAE shopfront.
Both paths now allow 100% foreign ownership in most sectors. The UAE amended its Commercial Companies Law in 2021 to make this possible on the mainland (u.ae, 2024). Over 40 free zones operate across the UAE as of 2024, each with its own activity list and fee structure.
A US-based consultant setting up a remote advisory firm will typically find a free zone license faster and cheaper. A retailer wanting a Dubai shopfront needs a mainland license from DET. Your choice of path affects where you can trade, what office you need, and how much you pay.
Key Terms You Will See
Trade license: the permit that lets your company carry out a named activity legally
Memorandum of Association (MOA): the founding document that sets out ownership and structure
Share capital: the amount you declare as starting funds, most free zones have no minimum
Establishment card: your company's official ID, issued after setup
Worth flagging: when Dubai South Business Hub (DSBH) issues your trade license, the activity listed on it, for example, "General Trading", is the only activity your company is legally allowed to carry out without extra approval. You can browse the full list of business activities in Dubai on the DSBH portal before you apply.
Mainland vs Free Zone: Which Structure Fits You
A mainland license lets you trade anywhere in the UAE and bid for government contracts. A free zone license is faster to get, often cheaper, and suits companies serving international clients. The right choice depends on who your customers are and where you plan to do most of your work.
Factor | Mainland (DET) | Free Zone (DSBH) |
|---|---|---|
Who you can sell to | All UAE customers, government bodies, and federal contracts | Mainly international clients and other free zone companies |
Office requirement | Physical office or retail space required | Flexi-desk accepted for most activity types |
Foreign ownership | 100% in most sectors since 2021 amendment | 100% in all free zone activities |
Corporate tax eligibility | 9% on taxable income above AED 375,000 | 0% if Qualifying Free Zone Person conditions are met |
Typical setup speed | 1 to 3 weeks, depending on activity and approvals | 3 to 5 working days for most online applications |
When Mainland Makes Sense
Choose a mainland license when any of these apply.
You want to open a retail shop, restaurant, or physical service outlet in Dubai
Your clients are UAE government bodies or local firms that require a mainland supplier
You need to hire staff directly into the UAE labour market under MOHRE
You plan to grow into multiple emirates quickly
A US-owned cleaning company winning a contract to service Dubai government offices must hold a mainland DET license. A free zone license alone will not satisfy the procurement rules. Mainland companies can trade across all 7 emirates and bid for federal contracts (u.ae, 2024).
When a Free Zone Works Better
A free zone is usually the faster, lower-cost route for international founders. Here is when it fits best.
Your revenue comes mainly from clients outside the UAE or from other free zone companies
You want to set up fast with less paperwork and lower upfront cost
You need a UAE address and visa but not a full office from day one, a flexi-desk works
You want 100% of your profits with no local partner involved
DSBH sits next to Al Maktoum International Airport and Jebel Ali Port, cutting logistics time for trading companies
A New York-based e-commerce brand setting up a regional hub can use a DSBH free zone license to manage stock, hire staff, and invoice international clients, all without a costly office lease.
One important condition: qualifying free zone companies can pay 0% corporate tax, but only if they meet the Qualifying Free Zone Person conditions the FTA sets (Federal Tax Authority, 2024). Confirm these with a tax adviser before you assume the 0% rate applies to you.
Is a free zone company allowed to sell inside the UAE?
A free zone company can sell to UAE customers, but it must do so through a registered mainland distributor or pay the applicable customs duty on goods entering the UAE market. Direct retail to UAE consumers from a free zone license is not permitted without a mainland arrangement in place.
7 Steps to Set Up a New Business in Dubai
To set up a new business in Dubai, you choose your activity, pick a structure, book a trade name, submit your documents, pay your license fee, get your establishment card, and apply for visas. Most free zone setups finish in 3 to 5 working days when all papers are ready.
Steps 1 to 4: Plan and Apply
Step 1, pick your activity: Choose what your company will do, General Trading, IT Consulting, or Media Production are common choices. Confirm the activity is approved in your chosen zone.
Step 2, choose your structure: Decide between mainland (DET) and free zone (such as DSBH). Base it on your clients and your budget.
Step 3, book your trade name: Use the DSBH portal for a free zone company. The name must not copy an existing brand or use words that need extra approval. You can check trade name availability online before you apply.
Step 4, send your papers: Submit your passport copy, a recent photo, and your signed MOA. DSBH accepts these online.
A US entrepreneur setting up a trading company at DSBH can complete steps 1 to 4 fully online, with no need to fly to Dubai first.
Steps 5 to 7: Pay, Receive, and Grow
Step 5, pay your license fee: Costs vary by activity and package. Use the DSBH cost calculator to get a firm number before you commit.
Step 6, get your establishment card: This is your company's official ID. You need it to open a bank account and apply for visas.
Step 7, apply for residency visas: Tie your investor or employee visas to your trade license. DSBH offers residency visa packages as part of its setup bundles (UAE residency visa services).
Once the establishment card is in hand, most UAE banks will open a business account within 5 to 10 working days, provided your documents are clean and your activity is low-risk. Higher-risk activities may take longer or need extra due diligence.
Documents You Need to Set Up a New Business in Dubai
To set up a new business in Dubai you typically need a valid passport copy, a recent passport photo, proof of address, and a signed MOA. Free zone setups like DSBH accept these digitally. Additional approvals may be needed for regulated activities such as healthcare, education, or financial services.
Standard Documents for Most Setups
Passport copy valid for at least 6 months, all shareholders and directors
Recent passport photo on a plain white background
Proof of address, utility bill or bank statement, no older than 3 months
Signed MOA, DSBH provides a template for single-owner companies
No-objection letter if you hold a UAE residence visa under another sponsor
A solo founder from the US setting up a one-person consulting company at DSBH needs only a passport copy, a photo, and a signed MOA to get started.
Extra Approvals for Regulated Activities
Healthcare: Dubai Health Authority (DHA) approval before the license is issued
Education: Knowledge and Human Development Authority (KHDA) sign-off required
ICT and tech: pre-approval may be needed from the Telecommunications and Digital Government Regulatory Authority (TDRA)
Always confirm the approval list for your specific activity code before you pay any fees
An online tutoring company based in the US wanting a Dubai free zone license must get KHDA approval first. Skipping this step means the license cannot be issued, and you will not get a refund on any fees already paid. The business activities list on the DSBH portal shows which activities carry extra steps.
Costs to Set Up a New Business in Dubai
The cost to set up a new business in Dubai depends on your activity, structure, and office type. Free zone licenses at DSBH start lower than most mainland options. You pay for the trade license, establishment card, visa fees, and office or flexi-desk. Use a cost calculator to get an exact figure before you commit.
What Drives the Price Up or Down
Activity type: regulated activities cost more because of the extra approvals they need
Number of visas: each residency visa adds to your total bill
Office type: a flexi-desk costs far less than a private office or warehouse
Declared share capital: some activities require a minimum stated capital in the MOA
Annual renewal: budget for a renewal fee from year two onwards
A one-person consulting firm taking a flexi-desk and one visa at DSBH will pay significantly less than a trading company that needs warehouse space and five employee visas. Model your actual needs before you pick a package.
How to Get an Accurate Number
Use the DSBH cost calculator to see a real price for your activity and visa count
Ask your setup adviser to confirm whether your activity needs a pre-approval fee on top of the license fee
Factor in bank account opening costs, some banks charge a setup fee or require a minimum balance
Cost Item | What Affects It | Notes |
|---|---|---|
Trade license fee | Activity type and zone | Paid annually; varies by activity code |
Establishment card | Fixed per company | Needed before bank account or visa applications |
Residency visa | Number of visas applied for | Each visa adds a separate government fee |
Office or flexi-desk | Space type and size | Flexi-desk is the lowest-cost option for most startups |
Pre-approval fees | Regulated activities only | DHA, KHDA, or TDRA fees apply before license issue |
What You Must Comply With After Setup
After you set up a new business in Dubai you must register for corporate tax with the FTA, keep financial records for at least 7 years, renew your trade license each year, and keep your staff visas current. Free zone companies must also meet the conditions that qualify them for the 0% tax rate.
Tax and Record-Keeping Rules
Corporate tax
Every UAE company must register with the FTA once it is formed. Your turnover level does not change this rule. The UAE corporate tax rate is 9% for taxable income above AED 375,000 (Federal Tax Authority, 2024).
Free zone tax rate
Free zone companies can pay 0% corporate tax, but only if they meet the Qualifying Free Zone Person conditions the FTA sets. Confirm these with a tax adviser, do not assume the 0% rate applies automatically.
VAT
VAT registration is needed once your taxable turnover hits AED 375,000 in a 12-month period (Federal Tax Authority, 2024). Register before you hit the threshold, not after.
Records
Keep all financial records for at least 7 years. The FTA can ask to see them at any time.
License Renewal and Visa Upkeep
Renew your trade license before it expires, a lapsed license triggers fines and blocks visa renewals
Employee and investor visas must be renewed before expiry, the grace period after expiry is short
Update your establishment card if your activity, address, or ownership changes
DSBH's business support services can handle renewals and government transactions on your behalf
A US owner living outside the UAE who lets their DSBH trade license lapse will find their investor visa renewal blocked until the license is restored and any fines are cleared. Set a calendar reminder 60 days before your renewal date.
Do I need to file a tax return even if I have no income?
Yes. Every UAE-registered company must file a corporate tax return with the FTA for each financial year, regardless of whether it earned any income. Failure to file on time attracts penalties. The FTA portal at tax.gov.ae handles registration and filing for all UAE entities.
Why Dubai South Business Hub Is a Strong Starting Point
Dubai South Business Hub is a free zone license authority inside the Dubai South development, next to Al Maktoum International Airport and Jebel Ali Port. It offers online company registration, flexi-desk options, and residency visa packages, making it a practical first stop for international founders who want to set up a new business in Dubai fast.
Location and What It Opens Up
Dubai South sits inside the world's largest urban aviation-led development
Al Maktoum International Airport is on the doorstep, cuts air freight time and cost
Jebel Ali Port is nearby, sea freight access to Asia, Africa, and Europe
The zone suits logistics, trading, services, and tech companies that need a UAE base with global reach
A US company importing goods from Asia and re-exporting to Africa can use a DSBH trading license in Dubai to manage that flow through Jebel Ali Port, with a warehouse inside
Frequently Asked Questions
