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Dubai isn’t just about skyscrapers and luxury anymore, it’s become one of the most exciting places in the world to start a business. Every year, more and more entrepreneurs are choosing Dubai and the UAE to turn their business dreams into reality. Why? Because the city offers a super supportive environment for startups and established companies alike.

From low taxes and world-class infrastructure to full foreign ownership and easy business setup options, Dubai is making it easier than ever to launch and grow a company. No matter if you’re just starting out or running a global brand, Dubai has space for your ambition.

But before you pack your bags or register your trade name, you probably have a few (or a dozen) questions regarding business setup in Dubai. So we’ve rounded up the most frequently asked questions about setting up a business in Dubai and the UAE, and answered them clearly, without the jargon.

Frequently Asked Questions about Dubai Business Setup

Starting a business in Dubai or the UAE comes with a lot of questions. To help you out, here are the top frequently asked questions we often get from new entrepreneurs and investors.

1. Can a foreigner own a business in Dubai?

Yes, foreign entrepreneurs can own 100% of their businesses in Dubai, especially when setting up in free zones or under specific mainland regulations that allow full foreign ownership without the need for a local sponsor.

2. What are the different types of business licenses available in Dubai?

Dubai offers several types of business licenses, including:

  1. Commercial License: For trading activities.
  2. Professional License: For service-oriented businesses.
  3. Industrial License: For manufacturing and industrial activities.
  4. Tourism License: For travel and tourism-related businesses.

3. What is the difference between Mainland, Free Zone, and Offshore companies in the UAE?

  1. Mainland: Allows businesses to operate anywhere in the UAE and internationally. Previously required a local sponsor, but many activities now permit 100% foreign ownership.
  2. Free Zone: Offers 100% foreign ownership, tax exemptions, and simplified setup processes, but restricts direct business with the UAE mainland unless a local distributor is appointed.
  3. Offshore: Primarily for businesses operating outside the UAE; offers benefits like asset protection and tax optimisation, but cannot conduct business within the UAE.

4. How much does it cost to set up a business in Dubai?

The cost varies based on the type of business, location, and other factors:

  • Mainland: Approximately AED 15,000 to AED 50,000.
  • Free Zone: Starting from AED 5,000, depending on the free zone and package chosen.
  • Offshore: Costs can range from AED 10,000 to AED 20,000.

5. What is the process of business setup in Dubai, UAE?

The general steps include:

  1. Determine the business activity.
  2. Choose the legal structure.
  3. Select a trade name.
  4. Apply for initial approval.
  5. Lease office space.
  6. Obtain necessary approvals.
  7. Submit documents and pay fees.
  8. Receive the business license.

6. Do I need a physical office to start a business in Dubai?

While mainland businesses generally require a physical office space, many free zones offer flexible options like virtual offices or shared workspaces, especially for startups and small businesses.

7. What are the visa options for business owners in Dubai?

Business owners can apply for investor or partner visas, which allow them to reside in the UAE. Additionally, the UAE offers long-term residency options like the 10-year Golden Visa for qualifying investors and entrepreneurs.

8. Is Dubai tax-free for businesses?

While Dubai offers a favourable tax environment, it’s not entirely tax-free. A 9% corporate tax applies to businesses with profits exceeding AED 375,000. However, many free zones provide tax exemptions, and there is no personal income tax.

9. Can I open a corporate bank account in Dubai as a foreigner?

Yes, foreign business owners can open corporate bank accounts in Dubai. Requirements vary by bank but generally include company documents, passport copies, and a business plan. Engaging with a business setup consultant can simplify this process.

10. Are there any specific requirements for certain business activities?

Yes, some business activities may require additional approvals from relevant authorities or ministries. For example, healthcare businesses need approval from the Dubai Health Authority, while educational institutions require approval from the Knowledge and Human Development Authority.

11. Can I obtain a trade license in Dubai without renting a physical office space?

Yes, Dubai offers virtual office services that allow you to register your business and obtain a trade license without the need for a physical office. This option is particularly beneficial for startups and entrepreneurs looking to minimise initial costs. 

12. Is it possible to manage my Dubai-based business remotely from outside the UAE?

Yes, many business structures in Dubai permit remote management. Entrepreneurs can operate their businesses from abroad, especially if the business model doesn’t require a physical presence in the UAE. However, certain activities may necessitate local presence or partnerships.

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

Setting up in a Dubai Free Zone offers several advantages, including:

  1. 100% foreign ownership
  2. Full repatriation of profits and capital
  3. Exemption from import and export duties
  4. No personal income tax
  5. Simplified setup processes and support services

14. Are there any specific naming conventions or restrictions when choosing a business name in Dubai?

Yes, Dubai has specific guidelines for business names:

  1. The name must not violate public morals or order
  2. It should not contain religious or political references
  3. If named after a person, that individual must be a partner or owner
  4. Certain words may require special approval or licensing

15. How many Free Zones are there in the UAE, and how do I choose the right one for my business?

The UAE boasts over 40 Free Zones, each catering to specific industries such as technology, media, healthcare, and logistics. When selecting a Free Zone, consider factors like your business activity, target market, required infrastructure, and proximity to clients or suppliers.

16. Do I need to notarise or attest documents for company registration in Dubai?

Yes, all documents required for company registration and visa issuance must be attested. This involves:

  • Attestation by the UAE Embassy or Consulate in the country where the documents were issued.
  • Attestation by the UAE Ministry of Foreign Affairs in Dubai.

This process ensures the authenticity of documents like passports, educational certificates, and other legal papers.

17. What is the lifestyle and culture like in Dubai for expatriates?

Dubai offers a cosmopolitan lifestyle with a blend of modern amenities and traditional culture. It’s known for its safety, low crime rate, and architectural marvels. Expatriates enjoy a high standard of living, diverse culinary scenes, and numerous recreational activities. The city is also recognised as one of the fastest-growing in the world.

18. What is the legal framework for setting up a business in Dubai?

Dubai has a well-defined legal structure for business setup:

  • Mainland Companies: Regulated by the Department of Economic Development (DED), allowing operations throughout Dubai and the UAE.
  • Free Zone Companies: Governed by respective free zone authorities, offering benefits like 100% foreign ownership and tax exemptions.
  • Offshore Companies: Primarily for international business, with restrictions on operating within the UAE.

19. What are the ongoing compliance requirements after setting up a business in Dubai?

After establishing your business, you must adhere to several compliance requirements, including:

  • Renewing your trade license annually.
  • Maintaining proper accounting records.
  • Filing VAT returns if your business is VAT-registered.
  • Ensuring timely visa renewals for employees and dependents.

20. Is it mandatory to have a local sponsor for setting up a business in Dubai?

With the recent changes in UAE laws, many business activities no longer require a local sponsor, allowing for 100% foreign ownership. However, certain activities, especially those of strategic importance, may still necessitate a local sponsor or service agent. It’s crucial to verify the requirements based on your chosen business activity.

21. How can I open a corporate bank account in Dubai?

To open a corporate bank account in Dubai, you’ll typically need:

  1. A valid trade license.
  2. Shareholder and director identification documents.
  3. Company incorporation documents.
  4. A business plan or company profile.

Bank requirements may vary, and some banks may request additional documentation or impose minimum balance requirements. Engaging with a business setup consultant like AE Setup can facilitate this process.

22. Can a non-resident open a bank account in Dubai?

Yes, non-residents can open bank accounts in Dubai, though the process may be more stringent compared to residents. Requirements typically include:

  • A valid passport
  • Proof of address in your home country
  • A letter explaining the purpose of the account
  • Bank statements from your home country

23. How can I get a Golden Visa through business investment or company formation in the UAE?

The UAE Golden Visa is a long-term (typically 10 years) residency visa granted to investors, entrepreneurs, and specialised talents. Entrepreneurs can qualify by:

  • Investing AED 10 million or more in public investments or company shares.
  • Setting up a company with a minimum capital of AED 10 million.
  • Owning a successful startup approved by an accredited business incubator.
  • Having a project that is of a technical or future nature, as approved by the relevant authorities.

The Golden Visa grants long-term residency (5 or 10 years) and is subject to meeting eligibility criteria.

24. Can Golden Visa holders start a business in Dubai?

Yes, Golden Visa holders are permitted to start and operate businesses in Dubai and across the UAE. The visa provides long-term residency, allowing entrepreneurs to focus on their business ventures without the need for a local sponsor.

25. What are the benefits of the UAE Golden Visa for entrepreneurs?

The Golden Visa offers several advantages:

  1. Long-term residency (5 or 10 years)
  2. No need for a local sponsor
  3. Ability to sponsor family members
  4. Full ownership of businesses
  5. Access to world-class healthcare and education

26. Can I apply for a UAE Golden Visa if I have an existing business outside the UAE?

While the Golden Visa primarily targets investments and businesses within the UAE, entrepreneurs with successful ventures abroad may qualify if they:

  • Expand their business to the UAE
  • Invest in a UAE-based company
  • Collaborate with an accredited business incubator in the UAE

27. Can I convert my free zone company to a mainland company in the UAE?

Yes, it’s possible to convert a free zone company to a mainland company. The process involves:

  1. Deregistering the free zone company.
  2. Establishing a new mainland entity under the Department of Economic Development (DED).
  3. Transferring assets and operations to the new entity.

28. Can free zone companies operate in the UAE mainland?

Free zone companies are primarily restricted to operating within their respective zones or internationally. To conduct business in the UAE mainland, they must appoint a local distributor or establish a branch office, complying with mainland regulations.

29. What are some popular free zones in Dubai and the UAE for business setup?

The UAE offers numerous free zones catering to various industries. Some notable ones include:

  • International Free Zone Authority (IFZA)
  • Ajman Free Zone (AFZ)
  • Ras Al Khaimah Economic Zone (RAKEZ)
  • Dubai Airport Freezone Authority (DAFZA)
  • Dubai Multi Commodities Centre (DMCC)
  • Dubai Internet City (DIC)
  • Dubai Media City (DMC)
  • Dubai Silicon Oasis (DSO)
  • Abu Dhabi Global Market (ADGM)
  • Dubai International Financial Centre (DIFC)
  • Sharjah Media City (SHAMS)

30. Can I sponsor family members (spouse, children) after setting up a business in Dubai?

Yes, business owners can sponsor their spouse, children, and sometimes parents, subject to meeting minimum salary requirements (usually AED 4,000–5,000 per month) and fulfilling residency visa application procedures.

Still Have Questions?

Starting a business in Dubai or the UAE is an exciting journey, but it can also feel overwhelming with so many rules and options. If you still have questions or need personalised guidance, the experts at AE Setup are here to help. From choosing the right business structure and license to handling paperwork, visas, and bank accounts, we make the entire process smooth and hassle-free. Just get in touch, and let’s make your business idea happen.