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Dubai is a global hub for business. As the leading representative of the business world, the government scaled up its efforts in 2024 to upgrade the infrastructure and improve the ease of doing business. Even in the three-year budget cycle approved on 29 October 2024 (for 2025-2027) with a total expenditure of AED 272 billion, the government has allocated 46% of the budget to infrastructure projects. Such initiatives help gain investors’ confidence in the country’s future, attracting them to establish their businesses. Reflecting these policies, there has been a 164.3% increase in the number of trained entrepreneurs from Dubai SMEs, according to reports from the Government of Dubai.
Dubai offers countless business options. From sole proprietorships and limited liability companies (LLCs) to offshore and private shareholding companies, Dubai offers flexible business structures to fulfill the business requirements of both local and foreign investors. At the same time, sectors such as finance, real estate, e-commerce, and technology contribute a substantial part to Dubai’s GDP. The government is taking new initiatives to provide a risk-free and investment-friendly environment for all business sectors, which makes Dubai an attractive destination for every entrepreneur. For instance, in 2023, the Dubai Chamber of Digital Economy successfully attracted nine multinational companies to Dubai and 549 technology startups, representing approximately a 916% increase compared to 2022.
However, starting a business in Dubai requires a strategic approach. You must first determine the appropriate business jurisdiction, the suitable business license, the visa type, and whether an office is required. Additionally, you need to consider the employees you require, as hiring costs are higher in most areas. Because In Q2 2024, business owners and entrepreneurs were primarily seeking government support in reducing government fees and rental and fuel costs, according to reports from the Dubai Economic Report.
There are several benefits of business in Dubai, such as the minimal taxation policy. The UAE government has a 9% corporate tax only on businesses with profits above AED 375,000, and there is no personal income tax as per Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. Furthermore, its strategic geographical location opens a gateway connecting Europe, Asia, and Africa, that facilitates trading and logistics businesses. The world-class infrastructure, top-tier airports, roads, and digital services of Dubai help businesses speed up operations and global connectivity.
Along with this, the type of company you want to establish requires extra attention, specifically regarding the business entity (free zone, mainland, or offshore). For instance, establishing a Civil Company for specialized services, such as lawyers, doctors, and consultants, requires alignment with specific regulations by the DED, which mandates a 51% local sponsor. Even though Dubai has one of the most favorable business environments, consulting agencies are necessary for smooth navigation in the regulatory landscape. Firms like Bain & Company, Rothschild & Co, and Morgan Stanley provide market analysis, legal guidance, and financial planning, ensuring businesses comply with local laws and optimize their investment strategies.
What are the Types of Businesses in Dubai?
The types of businesses in Dubai include sole proprietorships, limited liability companies (LLCs), partnerships, and private shareholding companies based on their structure, whereas finance, construction, e-commerce, and IT businesses are categorized based on their services. Reflecting this dynamic business environment, the Composite Business Confidence Index (BCI) of Dubai rose to 141.5 in Q1 2024, according to the Dubai Business Survey Overall Report, Q1 2024.
Types of Businesses Based on Structure or Entity
Dubai’s Department of Economy and Tourism (DET) offers several types of business frameworks structures, or entities for entrepreneurs and investors both natives and foreigners.
Sole Proprietorship
A sole proprietorship is a legal business entity, owned by a single natural person. The residents of the UAE and Gulf Corporation Council (GCC) can have a sole proprietorship framework for any of the businesses. However, foreigners can start sole proprietorship businesses in Dubai only for professional services with the help of a Local Service Agent (LSA).
Here are some requirements to start a sole proprietorship business in Dubai:
- A sole proprietorship is only for service-based or professional activities, such as consultancy, IT, medical, financial services, etc.
- The name of the sole proprietorship business must match the guidelines of the Department of Economy and Tourism (DET).
- A business license from the respective authority is required to start the business.
- Expatriates require the help of a local service agent (LSA) to get the license of a sole proprietorship.
Limited Liability Company (LLC)
A Limited Liability Company (LLC) is a business entity with 2 to 50 shareholders with liability depending on the number of shares. The shareholders can have profit and loss according to the number of their shares. Both local and foreign investors can start an LLC business in Dubai. Foreign investors can have 100% ownership of LLC business in Dubai according to Federal Law No. 2 of 2015 on Commercial Companies.
However, investors need to fulfill the following requirements to start the LLC business:
- Passport copies of all the shareholders.
- Non-Objection Certificate (NOC) of all the expatriate shareholders.
- Memorandum of Association (MoA) which is notarized by the public notary.
- Tenancy Contract for the physical presence.
- Approval letter or certificate from the Department of Economy and Tourism.
Civil Company
A civil company is a legal business structure for two or more shareholders or partners. This framework is mainly for professional businesses, such as legal consultancy firms, engineering practices, architectural services, etc. The residents of the UAE and GCC can have 100% ownership of the civil company. However, the expatriates need to hire a Local Service Agent (LSA) for licensing purposes.
The partners or shareholders of Civil Company have unlimited liability on the company assets and debts according to the Federal Decree-Law No. 32 of 2021 on Commercial Companies. Here are the key requirements to start a civil company:
- Trade name according to the rules of the Department of Economy and Tourism.
- Documents, such as passport copies, visas, tenancy, partnership agreements, etc.
- Memorandum of Association (MoA) which is notarized from the local authority.
Private Shareholding Company
A private shareholding company is a legal business entity with a minimum of two and a maximum of 200 shareholders, offering limited liability to the shareholders. In this business framework, the shares are not public, only the private partners can own the shares. The investors need a minimum of AED 5 million to start a private shareholding company as per regulations of the Securities and Commodities Authority (SCA) and the Department of Economic Development (DED).
The foreign investors can own most of the businesses under private shareholding companies. However, there are some sectors, such as oil, gas, and banking which require local partnership as mentioned in Federal Decree-Law No. 32 of 2021 on Commercial Companies. The key requirements to start a private shareholding company are the following:
- Approved business plan from the Department of Economy and Tourism.
- Registered trade name.
- Notarized Memorandum of Association.
- Approval from UAE Securities and Commodities Authority (SCA).
Partnership Company
A partnership company is a legal business entity with two or more partners, sharing profits, losses, and liabilities. This type of business framework comes in the form of general partnership and limited partnership. The general partnership is only for the UAE residents. However, foreigners can start limited partnership businesses by having one general partner in the business.
The requirements for the general and limited are different. However, the following requirements are common in both types of partnership companies:
- Registration of trade name from the Department of Economy and Tourism (DET).
- Memorandum of Association (MoA) which is notarized by a local notary.
- Documents, such as passport copies, UAE IDs, Non-Objection Certificates (NOC) from relevant authorities, etc.
- Tenancy agreement for physical presence.
Offshore Company
The offshore company is a legal business entity to get the registration of UAE jurisdiction while operating internationally. The offshore companies help investors with global trading, asset protection, and tax protection. The regulations of offshore companies are handled by the Jebel Ali Free Zone Authority (JAFZA) Offshore, Ras Al Khaimah International Corporate Centre (RAK ICC), and Ajman Free Zone Offshore. Every partner of an offshore company has limited liability according to the number of owned shares.
The investors can establish the offshore companies by fulfilling the requirements given below:
- Selection of an offshore jurisdiction in Dubai from the JAFZA, RAK ICC, or Ajman Free Zone.
- Requires a UAE-registered agent for licensing and registration.
- Submit documents, such as passport copies and shareholders’ visas, proof of address, reference letter from a bank, Memorandum of Association (MoA), complete business plan, etc.
- Pay registration and licensing fees.
- Approve the certificate of incorporation.
Types of Businesses Based on Manufacturing and Services in Dubai
Dubai is the hub of several types of manufacturing and service-based businesses in multiple sectors, such as real estate and tourism service-based whereas automotive, pharmaceutical, food, and textile production-based businesses. The manufacturing industry in Dubai makes up 8.3% of the GDP of 2023 with a contribution of AED 24.7 billion as per reports of the government portal.
At the same time, the contribution of service-based businesses to Dubai’s GDP shows an increase from 46.71% to 58.21% as reported by the Embassy of United Arab Emirates. The transport and storage activities showed a growth rate of 8.4% and became the highest contributor to Dubai’s GDP. Some of the most important businesses in Dubai are the following:
- Automotive Industry
- Food and Beverage Production
- Pharmaceutical Industry
- Real Estate
- Tourism and Hospitality
- Financial Services
- Technology and Digital Services
- Healthcare Services
- Sustainable Energy Services
- Trading
- Manufacturing
- Education
- Construction
- Logistics
- Consulting
However, the type of business you choose also depends on where and in which jurisdiction you are establishing your business. The three jurisdictions, including free zone, mainland, and offshore, have different operational regulations. For instance, in Dubai Media Center, you can only establish a media-related services business.
What are the areas for Business operations in Dubai?
There are multiple areas where businesses operate legally in Dubai. The main ones are the free zones and the mainland. Each jurisdiction operates under local laws and guidelines set by the specific business authorities. For instance, the mainland operates under the DED, while free zones operate under free zone authorities. To get an in-depth analysis, we have a complete guide about the different types of business jurisdictions in Dubai. The following are the geographic areas where businesses can operate legally in Dubai without any legal hurdles:
- Free zone, known for tax exemptions
- Mainland, known for business freedom
- Offshore, known for international business
This classification is set by government bodies, including the Dubai Department of Economic Development (DED), various free zone authorities, and offshore regulators like JAFZA and RAK ICC.
How to Start a Business in Dubai?
To start a business in Dubai, you need to understand the process of business registration. Alternatively, you can use the Flex Happich platform to complete the registration process in less than a week. The first step in starting a business is to decide whether you want to operate in a Free Zone, Mainland, or Offshore.
Once you Identify the jurisdiction then the next option is selecting the specific business activity as per the Department of Economy and Tourism (DET) and the Specific Zone Authorities. Below are some common steps across almost all jurisdictions.
Determine the Business Activity or Industry
The business activities in Dubai come under six categories, such as tourism, occupational, industrial, commercial, professional, and agricultural. In these categories, the UAE offers more than 200 activities for business. You have to select an activity or industry appropriate for your start-up.
Select the Appropriate Legal Structure
Dubai offers several legal entities or structures for the business, such as sole proprietorship, liability limited company (LLC), partnership, private shareholding company, etc. These frameworks define the rules and regulations for your business which should be according to the needs of your business.
Register the Business or Trade Name
First, give your business a name that satisfies all the terms and conditions mentioned in the United Arab Emirates’ Ministry of Economy. Then, register this name through the website or application of the Department of Economy and Tourism of the respective zone.
Get the Initial Approval
You have to get the approval of the business activity, legal structure, and trade name from the respective legal authorities, such as Dubai Municipality for construction and real estate business, Ministry of Health and Prevention (MOHP) for medicine and health-related businesses, Central Bank of UAE for financial businesses, etc.
Complete the Memorandum of Association (MoA) or Local Service Agent (LSA) Draft
Complete the Memorandum of Association (MoA) or Local Service Agent (LSA) agreement and notarize it from the respective local notary. The sole proprietorship businesses require a Local Service Agent (LSA) while the rest of the entities require a MoA.
Choose and Register the Appropriate Business Location
The physical location is necessary for every business in the UAE as per Federal Law No. 2 of 2015 of UAE Commercial Companies Law. The location of the business must be appropriate for business activities. In Dubai, businesses require tenancy contracts to register on the Dubai Land Department’s Ejari portal.
Approve the Business from Government
Some businesses need extra approvals from government departments, such as the Ministry of Interior, Ministry of Justice, Local Municipal Department, Executive Council, Telecommunications and Digital Government Regulatory Authority (TDGRA), etc.
Submit the Required Documents
You have to submit the required documents to start the business in Dubai are the following:
- Receipt of Initial Approvals
- Copies of Passport and Visa IDs
- Tenancy or Lease Contract
- Draft of Memorandum of Association
- Approvals of Government Authorities
Pay the License Fees
Now, you have to pay the fees for business licenses on the physical centers of DET or through their websites. The DET can get 2 to 28 days, depending on the zone, to deliver the business after paying the license fees.
Register with the Chamber of Commerce and Industry
There are chambers of commerce and industry in every emirate of the UAE. In this case, you need to register your company in Dubai’s Chamber of Commerce and Industry.
For the complete step-by-step process, you can check our Business Set Up Guide where our expert team has covered every aspect in detail.
Requirements for Establishing a Business in Dubai
The requirements for establishing a business in Dubai differ for each jurisdiction. For instance, you need to fulfill a Local Service Agent (LSA) agreement in the mainland as per the UAE Commercial Companies Law (Federal Law No. 2 of 2015), but this is not required in free zones and offshore.
Additionally, every business sector has separate requirements based on local laws and government instructions. For example, an MOA is required for free zone companies like Free Zone Establishments (FZE) and Free Zone Companies (FZC), but not for branch offices and some civil companies, as per specific free zone authorities.
However, the common requirements are mentioned below:
- Choosing a legal business activity
- Registering an untaken trade name
- Obtaining the specific business licenses
- Leasing office space, if required
- Ownership confirmation
How Much Does It Cost to Start a Business in Dubai?
The cost to start a business in Dubai varies depending on the business jurisdiction and the business activity, but here are some estimates. Here’s the cost breakdown in all business jurisdictions. However, this is not a fixed rate; you may get the same setup at a slightly lower or higher price.
| Category | Mainland | Free Zone | Offshore |
| Business License Fees | $3,000 – $13,000 | $2,160 – $8,100 | $1900 – $5,400 |
| Office Space Costs | $4,000 – $18,000 | $1,300 – $10,000 | Not required |
| Visa Fees | $800 – $1,890 | $1000 – $2,000 | $800 – $2000 |
| Trade Name Registration | $810 – $1,890 | $810 – $1,890 | $810 – $1,890 |
| Legal Fees | $1,300 – $2,000 | $1,300 – $2,700 | $1,300 – $2,700 |
| Bank Account Setup | $300 – $1000 | $300 – $1000 | $300 – $1000 |
Benefits of Establishing a Business in Dubai
Dubai offers a wide range of opportunities when it comes to investment in the Emirates. The government is consistently working on providing an ideal environment for the business community. For the better interests of the business communities, 76 new sector-specific Business Groups in 2023 were established by the Dubai Chamber of Commerce, bringing the total to 105.
These 5 main advantages that attract foreign investors, small businesses, and freelancers include.
Advantages:
Strategic Location
Dubai has the crossroads of Europe, Asia, and Africa which makes transportation and traveling easy. At the same time, Dubai’s airports offer 8-hour flights to two-thirds of the world’s population.
Minimal Taxation
Dubai has taxation policies to help businesses retain their maximum policies. There is only a 9% federal corporate tax on those businesses with a profit exceeding AED 375,000. Moreover, there is no personal tax in Dubai as per the Federal Tax Authority’s guidelines.
World-class Infrastructure
Dubai is ranked 4th number in terms of quality of infrastructure in the World Economic Forum’s 2023 Global Competitiveness Report. It helps in efficient transportation and sustainability. At the same time, it supports the advanced technologies for digital transformation.
Business Friendly Policies
Another benefit of business in Dubai is business-friendly policies, such as 100% foreign ownership, easy and streamlined registration of business setup, and a safe environment for physical and intellectual properties.
For a detailed exploration of the extensive benefits of setting up a business in Dubai, check out this guide on Dubai’s business advantages and disadvantages. Our experts highlighted how Dubai’s economy, tax incentives, and strategic policies empower entrepreneurs.
Business Licenses in Dubai
The types of business licenses in Dubai include E-commerce Licenses, Industrial Licenses, Import-Export Licenses, Construction Licenses, Education Licenses, and Healthcare Licenses. These are legal permits that allow businesses to operate within Dubai.
These licenses are categorized based on business activities, including Commercial, Industrial, and Professional types. However, for the approval you have aligned with the regulation of the specific free zone authorities like DAFZA and the Dubai Economic Department. The following are some common business licenses in Dubai
- Commercial license for trading activities, such as import and export.
- Industrial license for manufacturing, production activities, and packaging.
- Professional license for services, such as IT and consultation.
- Tourism licenses include businesses like travel agencies, hotels, and tour operators.
- Agricultural license for farming and fisheries.
- Craftsmanship license for skill-based activities, such as carpentry, blacksmithing, plumbing, etc.
Types of Companies in Dubai
There are several types of companies in Dubai that entrepreneurs from UAE and foreign countries have established, including LLCs, Partnership Companies, and FZE. Ownership in these companies ranges from sole proprietorships to partnerships with multiple owners. There is a unique structure for every type of company, and they need to be legalized to avoid fraud. That’s why Dubai has developed a Department of Economic Development (DED). This department defines the type of companies that can be established in Dubai. Moreover, they have designed policies for each type of company.
The following company types can be established in Dubai, according to the Federal Decree-Law No. 32 of 2021.
- Sole Proprietorship
- Partnership Company
- Limited Liability Company
- Private Shareholder Company
- Public Shareholding Company
- Civil Company
To establish any of these companies in Dubai, it will take only 3-6 working days. The best thing about establishing a company in Dubai is that you don’t need to be there. You can be anywhere in the world and establish a business in Dubai. However, there are some places in Dubai where it is compulsory for entrepreneurs to be present in order to start their businesses, such as commercial businesses on the mainland.
Is it possible to obtain Dubai citizenship through business investment?
No, it is not possible to obtain Dubai citizenship through business investment. However, significant investments can lead to a long-term residency visa, known as the Golden Visa. As of now, Dubai offers a Golden Visa for about 5-10 years, allowing long-term residency for expat investors, entrepreneurs, and skilled professionals. This visa grants residency but does not grant citizenship.
What are the consulting agencies for investment in Dubai?
Several consulting agencies in Dubai offer specialized services for business investment and setup. Some notable agencies include:
- PRO Partner Group
- Dubai Business Advisors
- Flex Happich Consultancy
- Adam Consulting
- SFM Corporate Services
These agencies provide comprehensive services, including legal, tax, and company formation advice, helping foreign investors navigate the regulatory landscape.
What are the top business consultants in Dubai?
There is no analysis tool that can definitively determine the best, but based on customer experience, we recommend the top three for you. These three consultants are known for their expertise and reputation in the market, including:
- PwC (PricewaterhouseCoopers)
- Felix Happich Consultancy
- Ernst & Young (EY)
These firms offer a range of services, including market entry strategies, financial advisory, legal consulting, and taxation.
