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Dubai is a global investment hub for expatriate investors. Its business efficiency, prime location, strong economy, and visionary business policies strengthen investors’ confidence. The D33 agenda has made Dubai one of the top destinations globally for future technologies, including AI, blockchain, and fintech. Dubai’s startup ecosystem is highly supportive creating an ideal environment for business set up. Its ranking at the top globally for greenfield FDI projects for three consecutive years, including 2023, is a clear indicator of ideal business conditions. This ranking is based on the FDI Performance Index, produced by fDi Intelligence, a division of the Financial Times Group.
Establishing a business in Dubai seems challenging, but in reality, it is a streamlined, efficient, and secure process. It facilitates both domestic and foreign investors. The government is digitizing most of the sectors through Dubai’s Digital Strategy, achieving a 99.5% digitization rate for government services as of 2023, with full compliance with the Dubai Data Law. Dubai has significantly contributed to the UAE’s 16th global ranking in the World Bank’s Ease of Doing Business Index 2020 through its efficient business processes.
The main requirements include registering a trade name, preparing legal documents and securing the necessary licenses based on the business activity. Additional steps involve securing local sponsorship for mainland businesses, providing passport and visa copies. However, the requirements change based on the jurisdiction, including mainland, free zone, and offshore setups.
Although doing business in Dubai offers many benefits, challenges such as high setup costs and the need for local sponsorship for mainland businesses may create hurdles for entrepreneurs. However, the Felix Happich team, with X years of experience, is here to help you establish a successful business.
What are the Advantages of a Business Set Up in Dubai?
The advantages of setting up a business in Dubai include its strategic location, world-class infrastructure, business-friendly policies, and 100% repatriation of profits. Along with this it offers tax exemptions in specific jurisdictions. The 10 main advantages are provided below.
- Strategic location
- Tax benefits
- Easy business setup
- Access to modern infrastructure and facilities
- Business opportunities in Dubai
- Visa advantages
- Repatriation of capital and profits
- Latest technology
- Political stability
- Supportive Import or export tax structure
The below image shows the key advantages of setting up a business in dubai.
Strategic Location: Dubai’s prime location is the main factor that makes it a global trade hub. Only Dubai International Airport connects to 256 destinations in 102 countries including India, Saudi Arabia, and the UK as the major ones.
Tax benefits: Dubai offers significant tax advantages, especially in its free economic zones. A federal corporate tax of 9% applies to business profits exceeding AED 375,000 in the mainland, while a 0% tax rate applies to profits below this threshold. Businesses operating in free zones are exempt from this tax on qualifying income, as per the UAE Ministry of Finance.
Easy business setup : Establishing a business in Dubai is easy, allowing investors to operate in a hurdle-free environment. It ranked 5th globally for its positive international image in fostering business development, according to the 2005 IMD World Competitiveness Yearbook.
Access to modern infrastructure and facilities : Dubai is known for the term “live in luxury” and has adopted some of the world’s most modern infrastructure. It ranked 14th globally in the Innovation Cities™ Index 2022-2023, published by 2thinknow, which evaluates 500 cities worldwide using 162 indicators.
Business opportunities in Dubai : Dubai is one of the leading countries driving global business. It provides a business-friendly environment that supports every investor. For instance, in the D33 initiative, the members endorse supporting investors to help double the economy by 2033. To provide extra business opportunities, the Dubai government organizes business events. For instance, Expo 2020 Dubai brought together 192 participating countries, providing significant opportunities for investors worldwide.
What are the Requirements for Business Setup in Dubai?
Setting up a business in Dubai requires adherence to specific legal and regulatory frameworks for unrestricted operations. Business operations are primarily regulated by the DED, free zone authorities, DIFC, and federal bodies like the FTA and the Ministry of Economy. The main requirements are mentioned in the image below
The following are the main requirements for you to follow for setting up a business in dubai.
- Trade Name approval
- Providing necessary documents
- Getting a Business License
- Initial Approval
- Office Space Contract
- Memorandum of Association (MoA)
- Payment and other government approvals
- Final Approval
Do I need a physical presence to start a business in Dubai?
Whether you need a physical presence to start a business in Dubai is determined by the business activity and jurisdiction. For instance, you don’t need a physical presence to set up a business in Dubai free zones or offshore that offer virtual offices as per and specific free zone and offshore authorities, such as the Jebel Ali Free Zone Authority (JAFZA) or RAK International Corporate Centre (RAK ICC). However, a physical presence is required to start a business in Dubai mainland, as per the regulations of the Department of Economy and Tourism.
Business Set Up Options in Dubai
Dubai offers countless options for setting up a business based on the specific jurisdiction and industry. The UAE government allowed about 2,000 business activities within the emirates. The main choices in Dubai include e-commerce, trade and logistics, consulting services, financial services, and tourism and hospitality. The choice of setup significantly impacts licensing, ownership, and operational processes. Below is the list of 10 most profitable business ideas in Dubai.
- Trade and Logistics
- Consulting Services
- Financial Services
- Tourism and Hospitality
- Media and Entertainment
- Healthcare
- Education
- Technology
- Events and Exhibitions
- Real Estate
- Retail Services
The list provided above is just a small section of the opportunities available. Undoubtedly, Dubai remains one of the best places in the world to set up a business because of its strategic location as per the report of Melodena Stephens a Professor of Innovation Management at the Mohammed Bin Rashid School of Government in Dubai. It offers countless opportunities for expatriate investors. To explore these opportunities in detail, do check our guide, “Dubai Business Opportunities for Different Industries.” The Felix Happich Consultancy team has thoroughly explored every possible opportunity, from small businesses to large enterprises.
Business Set Up Options in Dubai Free zone
Dubai free zones offer simplified procedures, tax benefits, and strategic locations. Free Zones have both limited and a wide range of business options based on their regulatory framework. For instance, Free Zones like DAFZA and JAFZA offer a wide range of business options including trade, finance, and professional services. However, some zones focus on specific sectors, such as Dubai Commerce City, which primarily supports the e-commerce industry.
Business Set Up Options in Dubai Main Land
Investors in Dubai’s mainland benefit from unrestricted operational freedom across the emirate, unlike businesses in free zones and offshore. Mainland businesses are not confined to specific areas operating throughout the emirate. With access to over 2,000 business activities, the main business setup options include trade and logistics, consulting and financial services, and tourism and hospitality.
Business Set Up Options in Dubai Off Shore
Offshore businesses in Dubai operate on an international level with tax free and 100% foreign ownership . They offer a wide range of sectors for investors to operate in. Some of the majors include Ecommerce, Real estate, Consultancy and Event management.
What are the steps to Set Up a Business in Dubai?
The following are the step to set up a business in Dubai
- Choose a Business Activity
- Select a Company Type
- Select and Register a Trade Name
- Get a Local Sponsor if required
- Apply for Initial Approval
- Draft MOA or LSA based on requirement
- Select Business Location
- Lease an Office Space
- Submit License Application
- Obtain Additional Government Approvals
- Pay Fees and Receive License
- Register your business with Dubai Chamber of Commerce
Establishing a business in Dubai involves a streamlined process. Regardless of the business jurisdiction, the main setup steps are interconnected. The main steps are explained below as well as provided in the image below.
- Choose a Business Activity
Selection of business activity needs to be aligned with the detailed list of about 2000 allowed business activities. The selection also depends on the type of jurisdiction as well. For example, in some free zones, you can only choose a specific business activity, like the Dubai Financial Centre, which only provides finance-based business activities. To get approval for a business activity, you have to meet the guidelines provided by The Dubai Economic Department (DED).
- Select a Company Type
Once you select a business activity, the next step is to identify the specific business entity. The main types of free zone entities include FZE, FZ LLC, and FZCO, while those in the mainland include Limited Liability Company, Civil Company, Representative Office, Sole Proprietorship, and others. While in Offshore jurisdiction, the options include Limited Liability Companies (LLCs), Private Limited Companies, Holding Companies, and Special Purpose Vehicles (SPVs).
- Select and Register a Trade Name
The Dubai Department of Economic Development gives approval for the trade name. To get approval, you need to align with the trade name selection rules. The 3 main rules include:
- It can’t start with a global brand name like NASA, etc.
- It can’t use government abbreviations like Middle East, etc.
- It can’t have the name of God.
- Get a Local Sponsor if required
A local sponsor is a local service agent (LSA) with a family membership card (Gincia) in Dubai, acting as a guide for foreigners looking to set up a business. A local sponsor helps with fees, essential document submissions, and setting up bank accounts. They also own a minimum 51% of the shares in mainland businesses mainly. However, you do not require a local sponsor in free zone and offshore jurisdictions, and there are about 1,000 commercial companies in the mainland that do not require a local sponsor.
- Apply for Initial Approval
Once you have gathered the required documents and fulfilled the registration criteria, you have to apply for initial approval from The Department of Economic Development (DED) in Dubai. Generally, the initial approval offshore takes a few days, while in free zones it takes a week, and in mainland, it exceeds a week.
- Draft MOA based on requirement
MOA is a legal document that ensures the protection of the rights of each party involved as a shareholder in a company. It identifies the structure of the business and the responsibilities of the stakeholders. This is important for legal business operations in Dubai. Without it, registering a business becomes difficult.
- Select Business Location
Business location matters a lot when it comes to cost, infrastructure, and the purpose of the business. For example, if you have an import and export business, you need to be near the sea and airport for cost-effective operations.
- Lease an Office Space
Office space is required for businesses operating in the mainland. The main types include flexi desks, dedicated workspaces, and personalized offices. The need for office space depends on the nature of the business and the number of employees. However, you do not need office space for free zones and offshore businesses.
- Submit License Application
Submission of the license application is an important step, without which you cannot run any business in Dubai. For legal operation of the business, you have to apply for a license at the Dubai Department of Economic Development (DED) for mainland businesses, the specific free zone authority for free zone businesses, and the offshore authority (RAK ICC and JAFZA) for offshore businesses. The type of license depends on the type of business activity and the jurisdiction you choose.
- Obtain Additional Government Approvals
Some business activities require additional government approvals in Dubai. For instance, businesses in the health and food sectors need approvals from the Municipality, Dubai Health Authority, Dubai Tourism, and others. These approvals ensure compliance with regulatory standards and industry requirements.
- Pay Fees and Receive License
After completing the documentation process, you have to pay the fee. The payment of fees and the receipt of business licenses in Dubai vary depending on the jurisdiction. Below is a breakdown of where to pay the fees based on the specific jurisdiction.
| Business Type | Where to Pay Fees | Authority |
| Mainland Business | Dubai Department of Economic Development (DED) | DED (online portal or service centers) |
| Free Zone Business | Respective Free Zone Authority | Each free zone authority (e.g., DMCC, DIFC, etc.) |
| Offshore Business | Respective Offshore Authority (e.g., RAK ICC, JAFZA) | Offshore authority (e.g., RAK ICC, JAFZA, etc.) |
- Register your business with Dubai Chamber of Commerce
Why it needs
What is the purpose
What if not registered
Cost and Time Considerations
The time and cost required for business setup in Dubai vary depending on the specific business activity and chosen jurisdiction. Generally, a free zone setup takes less time and less cost than mainland and offshore. However this may not always be true. The below table shows an in depth overview of the cost and time required for each.
| Business Setup Type | Cost (AED) | Time Required |
| Free Zone | AED 10,000–50,000+ | 5–15 days |
| Mainland | AED 15,000–30,000+ | 10–25 days |
| Offshore | AED 15,000–25,000+ | 12–30 days |
How much Time is required to set up a business in Dubai?
The time required for business setup in Dubai varies based on the specific business activity, the jurisdiction selected, and the agency involved in the process. Typically, setting up in a free zone takes approximately 1-2 weeks, a mainland setup requires 2-3 weeks, and offshore setups generally take 2-5 weeks.
What is the cost of Company Set up in the Dubai free zone?
The cost of setting up a business in Dubai is approximately AED 1,000 for a free zone, AED 3,000 for the mainland, and AED 900 for offshore. However, the cost may vary depending on the specific business activity, the jurisdiction selected, the number of visas availed, and the type of license obtained.
Do I need to have a business plan before setting up a business in dubai?
Yes, you need to have a proper business plan before setting up a business in Dubai. This is not only required for compliance with local laws but also helps in a successful business journey. The success rate of people with a proper business plan was 64% compared to 43% for those with an incomplete plan among 2,877 people (995 with a proper plan and 1,556 with an improper plan) according to a report from Tim Berry, the founder and chairman of Palo Alto Software.
This requirement of having a business plan is set by the licensing authorities in free zones, offshore jurisdictions, and the UAE Central Bank. For instance, the DMCC requires a proper business plan before registering your business there. Additionally, Central Bank policies mandate banks to verify business legitimacy and financial plans.
Tips for scaling a Business in Dubai
No doubt, to scale a business, expert opinions are valuable, but what truly matters is your own experience. Expert advice can help minimize losses and maximize profits. Here are 7 most helpful business tips from our expert team.
- Create a proper business plan
- Build a strong team and hire strategically to find the right talent
- Invest in technology and automate every possible process
- Research your competitors and focus on their customer engagement strategies
- Market your business to enhance its value
- Improve operational processes while maintaining quality and consistency
- Define rules for your staff and stick to your business plan
What is the best location for business set up in Dubai?
The best location to set up a business in Dubai depends on several factors such as business activity, target market, jurisdiction, objectives, and budget. For businesses with a low budget and those focused on local operations, free zones and mainland options are valuable. For international trade and asset protection, offshore is an ideal choice.
What are the Consulting Agencies for Investment in Dubai?
The consulting agencies in Dubai are a specialized group of experts that offer consultation services to businesses that want to enter or grow within the Dubai market. They assist with project financing, capital restructuring, business strategy and growth, mergers and acquisitions, and the implementation of new business models. For instance, Felix Happich Consultancy provides consultation services that help in establishing and scaling a business from scratch in Dubai.
The 3 main consulting agencies in dubai includes
- Deloitte: A global firm offering a wide range of services, including company audits and tax consulting.
- Felix Happich: A professional business consulting firm in dubai providing business strategy, audit, tax, and advisory services.
- Ernst & Young (EY): This firm specialized in audit, tax, and transaction services.
How can I get a Business consultant in Dubai?
You can get a Business consultant in Dubai by the below provided 6 methods. Every method will help you to get in touch with a business consultant . However identifying the best one is crucial which you can analyze from the clients feedback.
- Research Online
- Visit Free Zone Authorities
- Use Business Directories
- Seek Recommendations
- Search Firms on Google Map
- Attend Networking Events
What are the differences between setting up business in different business Jurisdictions?
The main differences between Setting up a business in Different jurisdictions include ownership structures, permitted business activities, office space requirements, and taxation policies. are involved. The jurisdictions include Mainland, Free Zone, and Offshore. The detailed comparison is provided in the below table.
| Aspect | Mainland | Free Zone | Offshore |
| Ownership | Allow 100% ownership under Federal Decree-Law No. 26 of 2020, approximately 1,000 commercial activities are permitted, except for economic activities with strategic impact as defined by UAE regulations. | Allow 100% foreign ownership in UAE free zones is Federal Law No. 2 of 2015 on Commercial Companies | Allow 100% foreign ownership under Federal Law No. 8 of 1984 amended by Federal Law No. 2 of 2015, and supported by specific regulations in JAFZA and RAK ICC. |
| Business Activities | Can directly trade in free zones and the mainland across Dubai without restriction. Approximately 2,000 business activities are allowed, with certain activities (e.g., healthcare, education) requiring additional approvals from UAE authorities such as the Dubai Health Authority (DHA) or the Central Bank. | Cannot directly trade in Dubai mainland without a distributor according to UAE Commercial Companies Law (Federal Law No. 2 of 2015) and specific regulations set by free zone authorities | Cannot trade within the UAE under JAFZA Offshore Companies Regulations and RAK ICC Business Companies Regulations 2016. These companies are designed to focus on international trade |
| Taxation | 9% corporate tax on profits above AED 375,000 (Federal Decree-Law No. 47 of 2023, UAE Commercial Companies Law) | 0% corporate tax for up to 50 years on qualified income (Federal Law No. 2 of 2015, Free Zone Regulations) | 0% corporate tax (on qualified income) and no VAT, governed by RAK ICC Regulations and JAFZA Offshore Regulations |
