Complete Guide 2026
Company Formation in Dubai
Dubai, one of the leading business hubs in the world, offers entrepreneurs incredible opportunities to start and grow businesses. Whether you're interested in setting up a small startup or a large-scale enterprise, company formation in Dubai is a process that's simple, transparent, and highly rewarding. With the UAE's strategic location, world-class infrastructure, and business-friendly regulations, Dubai provides a fertile ground for business success.
In this guide, we will walk you through the entire process of company formation in Dubai, covering the steps, benefits, types of businesses you can set up, and associated costs.
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Why Dubai
Why Choose Dubai for Company Formation?
Before diving into the company formation process, let's take a moment to understand why Dubai is an attractive destination for setting up a business:
01
Business-Friendly Environment
Dubai is known for its ease of doing business, with low bureaucracy, rapid approval processes, and a supportive government that encourages entrepreneurship.
02
Strategic Location
Positioned as a gateway between Europe, Asia, and Africa, Dubai offers a strategic location for businesses to access both Eastern and Western markets.
03
Tax Benefits
Dubai offers tax exemptions and incentives, particularly for businesses set up in free zones. Some companies may even benefit from a zero percent corporate tax rate.
04
Modern Infrastructure
Dubai's world-class infrastructure, including advanced transportation networks, state-of-the-art technology, and modern office spaces, provides an excellent platform for business operations.
05
Access to Funding and Investment
Dubai is home to numerous venture capital firms, banks, and investors, providing businesses with access to funding opportunities.
Company Types
Types of Company Formation in Dubai
There are several ways you can establish your business in Dubai, depending on your goals, the nature of your business, and the legal framework you prefer. Below are the main options available:
Most Flexible
1. Mainland Company Formation
A mainland company in Dubai allows businesses to operate anywhere within the UAE, including dealing directly with the local market. This is the most flexible option for entrepreneurs who want to reach customers throughout the UAE.
Key Features:
- Local Sponsor Requirement: For most mainland businesses, a local sponsor (UAE national) must own 51% of the company shares. However, some activities allow 100% foreign ownership.
- No Restrictions on Market Access: Mainland businesses can operate freely within the UAE without restrictions on location or the market they serve.
- Business Activities: Mainland companies can engage in a wide range of activities, including trading, retail, manufacturing, and professional services.
100% Ownership
2. Free Zone Company Formation
Dubai has over 30 free zones, each catering to different types of businesses, such as technology, media, logistics, healthcare, and finance. Free zone companies offer 100% foreign ownership, making them highly attractive to international investors.
Key Features:
- 100% Foreign Ownership: In free zones, foreign entrepreneurs can retain full control of their business.
- Tax Exemptions: Many free zones offer tax exemptions, such as no VAT, no corporate tax, and no import/export duties for a set number of years.
- Limited Market Access: Businesses in free zones are typically limited to operating within the zone or abroad. To conduct business with the local UAE market, a local distributor or partner is required.
- Industry-Specific Facilities: Free zones offer specialized infrastructure for certain industries, such as warehouses, logistics, and offices.
International
3. Offshore Company Formation
An offshore company in Dubai is established in one of the UAE's offshore jurisdictions, such as the Jebel Ali Free Zone (JAFZA). Offshore companies are primarily used for asset protection, privacy, and tax optimization. They are not allowed to conduct business within the UAE but can operate internationally.
Key Features:
- Privacy and Asset Protection: Offshore companies offer a high level of privacy regarding ownership and operations.
- Minimal Presence in the UAE: Offshore companies do not require a physical office or staff in Dubai.
- Limited Local Activity: These companies cannot conduct business in the UAE market but are perfect for holding companies, international trade, or asset protection.
Professional
4. Professional Service Company Formation
A Professional Service Company is ideal for individuals or groups of professionals who wish to offer services like consultancy, legal, medical, or educational services. This type of company requires 100% foreign ownership, but a UAE national must be appointed as a local service agent.
Key Features:
- 100% Foreign Ownership: The business owner retains full control of the company.
- Local Service Agent: A UAE national must be appointed as the local service agent. They do not hold shares or interfere in business operations.
- Service-Based Business: The company can only provide professional services, such as consulting, legal, and IT services.
Step by Step
Step-by-Step Process for Company Formation
Now that you understand the types of companies you can form in Dubai, let's look at the general steps involved in the company formation process:
1
Decide on the Type of Business and Activity
The first step in forming a company in Dubai is to decide on your business activity. Dubai allows a variety of commercial, industrial, and professional activities, so it's important to choose one that fits your expertise and business goals. Once you decide on your business activity, you can choose the appropriate company structure (mainland, free zone, offshore, or professional service).
2
Choose a Business Name
Selecting the right name for your business is an important part of the process. The name should reflect your business activities and adhere to Dubai's naming conventions. It should not be offensive, contain any religious references, or use the name of existing companies. After choosing a name, you will need to reserve it with the Department of Economic Development (DED) or the relevant free zone authority.
3
Find a Local Sponsor or Service Agent (if applicable)
For mainland companies, you must appoint a local sponsor who will own 51% of the shares in the business, unless your business activity allows for 100% foreign ownership. If you're setting up a professional services company, a UAE national must be appointed as the local service agent. The service agent does not hold shares or control the business operations but helps with the legal process.
4
Prepare and Submit Documents
Once your business activity and name are chosen, you will need to submit the following documents for approval:
- Passport copies of all shareholders and managers.
- Trade name reservation certificate.
- Business plan outlining the nature of the business, market, and financial projections.
- Lease agreement for your office space.
- Local sponsor agreement (for mainland businesses).
- Professional qualifications (for professional services companies).
5
Apply for the Business License
After gathering all necessary documents, you can submit your application for a business license to the Department of Economic Development (DED) for mainland companies or the relevant free zone authority. This application will include your business name, activity, and legal structure. The application process may take a few days, depending on the type of business.
6
Sign the Lease Agreement
If you are setting up a mainland company or a free zone company with an office requirement, you will need to sign a lease agreement for your office space. The lease agreement must be registered with the relevant authorities.
7
Pay the Fees and Receive Your License
Once your application is approved, you will need to pay the required fees for your company's formation. The fee varies based on the type of company and its size. Upon payment, you will receive your business license, granting you the legal authority to operate in Dubai.
Investment
Costs of Company Formation in Dubai
The company formation cost in Dubai typically ranges from AED 15,000 to AED 50,000, depending on various factors such as the company type, location, and business activity. Below is an approximate cost breakdown for different types of businesses:
Estimated Total Investment
AED 15,000 - 50,000
Depending on company type, location, and business activity
| License Type | Mainland | Free Zone | Offshore |
|---|---|---|---|
| Initial Fee | AED 10,000 - 50,000 | AED 5,000 - 20,000 | AED 8,000 - 15,000 |
| Renewal Fee | AED 10,000 - 50,000 | AED 5,000 - 15,000 | AED 7,000 - 12,000 |
| Included | Local sponsor, office space, registration fees | Tax exemptions, 100% ownership, facilities | Privacy, asset protection, minimal documentation |
Note: Additional costs may include office rent, visa fees, and legal fees. Free zones typically have additional costs for facilities and services.
Dubai Free Zone
AED 12,500*
- Business Consultation
- 0 Visa
- 100% Foreign Ownership
- Business License
- MOA and AOA
- VAT consultation
- Dedicated relationship manager
Best Value
Dubai Offshore
AED 11,500*
- Business Consultation
- 1 Visa (Lifetime)
- 100% Foreign Ownership
- Business License
- MOA and AOA
- Flexi desk
- Dedicated relationship manager
Dubai Mainland
AED 19,999*
- Business Consultation
- 1 Visa
- 100% Foreign Ownership
- Business License
- MOA and AOA
- Flexi desk
- Dedicated relationship manager
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Start Your Company in Dubai With Bizinvestfirm
Dubai offers incredible opportunities for entrepreneurs through its robust infrastructure, tax incentives, and strategic location. Whether you're interested in a mainland company, a free zone business, or an offshore company, Dubai provides diverse options to suit your business goals. By understanding the types of companies, legal requirements, and the company formation process, you can successfully establish your business in one of the world's most dynamic cities.
With a streamlined company formation process and government support, Dubai is undoubtedly one of the best places to start a business in the Middle East.
Contact BizinvestfirmTop Free Zones In Dubai, UAE
UAE Free Zones offers comprehensive business setup services in the UAE
Frequently Asked Questions About Company Formation in Dubai
Company formation in Dubai refers to the legal process of establishing a business entity in the emirate. It involves registering with the relevant authorities, obtaining a trade license, and meeting regulatory requirements. Options include mainland, free zone, or offshore setups, each with unique benefits.
Dubai’s strategic location bridges Europe, Asia, and Africa, making it a global trade hub. It offers tax advantages, including no personal income tax and a low 9% corporate tax for profits above AED 375,000. Its world-class infrastructure and diverse talent pool further enhance its appeal.
You can choose from several business structures based on your goals:
Mainland Company: Operates across the UAE with flexibility for government contracts.
Free Zone Company: Offers 100% foreign ownership and tax exemptions but limited mainland trading.
Offshore Company: Ideal for international operations, with full tax exemptions but no UAE mainland activity.
Yes, foreigners can fully own businesses in Dubai’s free zones or select mainland sectors. In some mainland setups, a local sponsor holding 51% ownership may be required, though recent reforms allow 100% foreign ownership in many cases. Consult Bizinvestfirm for specific industry requirements.
The timeline varies by business type and documentation. Mainland setups typically take 5–10 working days, while free zone registrations can be completed in as little as 2–5 days with proper paperwork. Delays may occur if documents are incomplete or additional approvals are needed.
Required documents depend on the business structure but typically include:
Passport copies of shareholders and directors
Proof of residence (e.g., utility bill)
Memorandum and Articles of Association (MOA/AOA)
Business plan (for some free zones) Bizinvestfirm can assist in preparing and attesting documents.
Yes, a physical office is mandatory for mainland businesses, with options like leased spaces or business centers. Free zones offer flexible solutions, including virtual offices or shared workstations. The office must comply with local regulations, such as Dubai’s Ejari portal for tenancy contracts.
A trade license is mandatory to operate legally in Dubai. Types include commercial, professional, and industrial licenses, depending on your business activity. Bizinvestfirm can guide you through the licensing process with the Department of Economic Development (DED) or free zone authorities.
Your company name must:
Avoid offensive or religious references
Include the legal structure as a suffix (e.g., LLC)
Be unique and not resemble existing registered names Bizinvestfirm can help verify name availability with the DED or free zone authority.
A local sponsor is required for some mainland companies, typically holding 51% ownership. Free zone and offshore companies don’t require sponsors, offering 100% foreign ownership. Recent policy changes have relaxed sponsor requirements for many mainland sectors.
The company formation cost in Dubai varies by structure and location. Mainland setups start at around AED 15,000 to AED 50,000, covering license and registration fees, while free zone costs depend on the zone and activity. Additional expenses include office rent, visa fees, and legal services.
Dubai has no personal income tax, and a 9% corporate tax applies only to profits exceeding AED 375,000 (introduced June 2023). Free zone companies may be exempt if they don’t operate in the mainland. Small businesses with revenue below AED 3 million may also qualify for tax exemptions.
Mainland limited liability companies (LLCs) have no minimum share capital. Public joint stock companies require at least AED 10 million, and private joint stock companies need AED 2 million. Free zone requirements vary by authority, so consult Bizinvestfirm for specifics.
Yes, a corporate bank account is essential for business operations. Required documents include the MOA/AOA, trade license, passport copies, and proof of residence. Bizinvestfirm can recommend reputable banks and streamline the account opening process.
Many mainland and free zone businesses must conduct annual audits to comply with UAE regulations. Offshore companies may have lighter requirements. Bizinvestfirm can connect you with trusted auditors to ensure compliance.
Free zone companies enjoy:
100% foreign ownership
Full tax exemptions (if not trading in the mainland)
Streamlined import/export processes
Access to specialized infrastructure However, they cannot trade directly in the UAE mainland without a local distributor.
Mainland companies can operate across the UAE, including free zones, and bid for government contracts. They may require a local sponsor and face stricter regulations. Free zone companies offer tax benefits and full ownership but are limited to international or zone-specific trade.
Dubai has over 40 free zones, each catering to specific industries like technology, media, or manufacturing. For example, Ras Al Khaimah (RAK) offers low costs and diverse facilities. Bizinvestfirm can help select the best free zone based on your business goals.
No, residency is not required to establish a company in Dubai or its free zones. However, a residence visa may be needed for the company manager post-formation, depending on the authority’s requirements. Bizinvestfirm can assist with visa processing.
Yes, you can apply for residency visas for yourself and employees after company formation. The process involves entry permits, medical tests, and Emirates ID registration. Bizinvestfirm offers end-to-end visa support to simplify this step.
