Dubai Business Setup What Are The Steps, Licenses and Tax
Dubai business setup means choosing mainland or a free zone, getting initial approval for your activity, reserving a trade name and issuing a trade license. The Dubai Department of Economy and Tourism licenses mainland companies; free zone authorities license free zone companies. Registration with the Federal Tax Authority for corporate tax follows.
You have a business idea and a budget, and the first decision is whether to license it on the mainland or in a free zone. That choice shapes your market, your office and your paperwork. This guide covers Dubai business setup under the Dubai Department of Economy and Tourism (DET, formerly DED, the government body that licenses mainland companies in Dubai), and shows where a free zone changes the route. Setting up a company in Dubai follows a fixed order, and you can plan each stage from here.
Company Setup in Dubai at a Glance
| Item | Details |
|---|---|
| Who handles it | DET (mainland); the free zone authority (free zones) |
| Where to apply | DET online services or the free zone’s platform |
| Typical cost | Set by the authority; varies by activity |
| Foreign ownership | Up to 100% for most mainland activities |
Dubai Business Setup: Mainland or Free Zone?
This choice decides which authority licenses you and where you can trade.
| Point | Mainland | Free zone |
|---|---|---|
| Licensed by | DET | Free zone authority |
| Foreign ownership | Up to 100% for most activities | Up to 100% |
| Office | Usually a physical office | Set by the zone |
| Corporate tax | 9% above AED 375,000 | 0% on qualifying income only |
For business setup Dubai investors plan, the first split is always the licensing body.
A mainland company in Dubai does not need a local sponsor for most activities. According to the UAE Government Portal, Federal Decree-Law No. 26 of 2020 removed the 51 per cent Emirati ownership and local agent requirement for most activities. See the official page on full foreign ownership of commercial companies.
Security and defence, telecommunications, banking and insurance, and commercial agencies cannot be fully foreign-owned.
Our business setup guides cover individual free zone routes.
How to Set Up a Company in Dubai: Step by Step
DET sets three stages for mainland licensing: initial approval, trade name booking and license issue. The steps below add the choices around them.
Step 1: Choose Your Business Activity and Legal Form
Pick the activity first. It decides the business license type and whether foreign ownership is allowed.
Step 2: Request Initial Approval
DET gives initial approval for your activities, partners and legal form.
Step 3: Book the Trade Name
Your trade name must match your business activity. Mainland names are reserved through DET.
Step 4: Arrange the Office and Sign the Company Documents
Mainland companies usually need an office backed by a tenancy contract / Ejari (Dubai’s tenancy registration). LLC shareholders sign the Memorandum of Association (MOA).
Step 5: Issue the Trade License
DET issues the trade license once the earlier stages are complete. Free zone companies receive theirs from the zone authority. The fee is set by the authority and varies by activity, so read the current amount before you pay.
Files often stall because shareholder details on the initial approval differ from the documents signed later. Match names and ownership percentages before you submit.
- An activity on the restricted list, discovered after planning for 100% ownership
- A trade name that does not match the approved activity
- Skipping corporate tax registration because you expect no profit
Documents You Need for the Business License
The final list depends on your activity, legal form and jurisdiction, so DET or the zone authority confirms it.
- Initial approval from DET
- Trade name certificate
- Memorandum of Association (MOA) for an LLC
- Tenancy contract / Ejari for a mainland office
- Identity documents for shareholders and managers
Choosing the Right Business Structure
The legal form decides liability, ownership and who can invest.
| Structure | Suits | Key point |
|---|---|---|
| Limited Liability Company (LLC) | Most investors | Liability limited to invested capital |
| Sole proprietorship | One owner | Sole control of operations |
| General partnership | Two or more partners | Shared ownership and profits |
| Branch office | Foreign companies | No new incorporation needed |
| Joint stock company | Large enterprises | Capital raised through shares |
A branch of a foreign company no longer needs a UAE national service agent, according to the UAE Government Portal.
Corporate Tax and What Comes After the License
Licensing is not the end of setup. Tax, banking and visas follow.
As of 2026, the UAE applies corporate tax of 9% on taxable income above AED 375,000, and 0% on income up to that amount.
Every business must register with the Federal Tax Authority (FTA), even if it expects to owe no tax.
A free zone company pays 0% only on qualifying income, and other income is taxed at 9%. Rates and conditions change, so read the current position on the FTA website.
- Corporate bank account: A licensed company can apply once its license is issued. Each bank sets its own requirements and decides each application.
- Residence visas: Owners and staff need UAE residence visas, which are a separate process.
- Government paperwork: A PRO (public relations officer) files company transactions with authorities. See PRO services.
If Your Case Is Different: A local partner, a restricted activity or shareholders in several countries need advice for your exact facts. A consultation can map the route.
Common Questions
Is a local sponsor required to set up a company in Dubai?
For most mainland activities, no. Federal Decree-Law No. 26 of 2020 removed the 51 per cent Emirati ownership and local agent requirement, so foreign investors can hold up to 100%. Restricted activities such as telecommunications and banking still limit foreign ownership. DET confirms the position for your activity.
What types of business licenses are available in Dubai?
Mainland licenses are grouped by activity, commonly trading, professional, industrial and tourism. The type follows the activity you choose at initial approval, not the legal form. Free zone licenses come from the zone authority under its own categories. DET lists current options on its business licensing page.
Do free zone companies in Dubai pay corporate tax?
They must register with the Federal Tax Authority like every other business. A free zone company that qualifies pays 0% on qualifying income, while non-qualifying income is taxed at 9%. The company must meet the conditions, and the authority decides how they apply.
Is a Dubai trade license issued by the same authority as in Abu Dhabi?
No. Each emirate licenses mainland companies through its own economic department. In Dubai that body is DET, while Abu Dhabi uses its own Department of Economic Development. Check the requirements of the emirate where you plan to operate.
Dubai business setup comes down to three early decisions: the jurisdiction, the activity and the legal form. Settle those first, and the license, tax registration and banking follow in order.
Last verified: October 2026 · Sources checked: Dubai Department of Economy and Tourism; The Official Platform of the UAE Government.