Starting a business in Dubai offers unique opportunities thanks to favorable conditions and minimal taxation. This helpful information will help avoid unpleasant surprises and simplify
the process.
How to start a business in Dubai and what is required—read our material.
Is it worth starting your own business in Dubai?
Before starting a business in Dubai, it is important to understand whether it is justified in terms of costs and profits. Dubai is one of the largest international business hubs, offering:
- Minimal taxes (in some cases, up to 0% on profits)
- 5% VAT rate
- Easy company registration in Dubai’s free economic zones
- Convenient geographic location for working with European, Asian, and African markets
- Modern infrastructure and government support
Market research and business direction selection
Before opening a business in Dubai, it is important to thoroughly research the market. The right choice of niche determines future success and requirements.
Popular sectors for foreigners include:
- Tourism and hospitality
- Trade and goods export
- Tech startups
- Financial services
- Logistics
- Construction
- IT industry
Choosing the right jurisdiction: Free Zones vs Mainland
In the UAE, there are two main options for company registration: Free Zones and Mainland. These jurisdictions offer different business conditions, and your choice directly impacts the rights and obligations of the owner.
Free Zones
- 100% foreign ownership. No need for a local partner.
- Tax holidays for up to 50 years, no VAT for certain activities.
- Simple registration, the option to use a virtual office.
- Profits can be transferred abroad without restrictions.
However, according to UAE Ministry of Economy regulations, Free Zone companies cannot directly conduct commercial activities in the UAE domestic market without a local agent or distributor.
Mainland
- Requires a partnership with UAE nationals (51%), but this opens access to the UAE market. Since 2020, some sectors allow 100% foreign ownership.
- No restrictions on working with government or private clients.
- Offices can be opened anywhere in the UAE.
- Participation in public tenders is possible, relevant for construction, engineering, and IT companies.
Cost of starting a business in Dubai (UAE)
The cost of starting a business in Dubai varies depending on the chosen jurisdiction. Main expenses include:
- Business license: from $3,000 to $7,000
- Office rent: $2,000-3,000
- Government fees: $500-3,000
- Visa and permit fees: $2,000-3,000
Company name check and registration
The first step in opening a business in Dubai is checking the availability of the company name.
It must comply with the law and be approved by the relevant authorities. The trade name must be coordinated with the Department of Economic Development, and the trademark with the Ministry of Economy.
Preparation of documents for business registration
To register a company in Dubai, you will need the following documents:
- Registration application
- Passports and visas of the founders
- Founding agreement
- Office lease agreement
- Business plan
Free Zones may require additional licenses and permits. For Mainland jurisdictions, registration with the Chamber of Commerce and local licensing is required. Ensure that the documents are up-to-date and jurisdiction-compliant. Consult with professionals.
Obtaining a business license
After submitting documents, a business license must be obtained. Licenses come in various types: commercial, professional, and industrial.
The cost of the license varies depending on the type of activity.
Opening a bank account
To operate a business fully, it is important to open a bank account in Dubai. You will need company documents as well as recommendations from local residents.
Getting a resident visa
To obtain a resident visa in the UAE for up to 10 years, you must invest at least 500,000 AED ($136,000) in a business and submit an application through the ICP online portal.
You can also invest in real estate to obtain a resident visa:
- Investment of 750,000 AED ($204,000) – 2-year visa
- Investment of 2 million AED ($545,000) – 10-year visa
Office rental or virtual workspace
Office space is a mandatory requirement for most companies’ registration. In some Free Zones, you can use virtual office services.
Hiring employees and visa support
To run a business successfully, you need to hire employees. Employers in Dubai are required to issue visas for their foreign workers and provide support at all stages.
Important! The UAE Ministry of Human Resources and Emiratisation (MoHRE) requires companies with 20–49 employees to hire a UAE national in 2024 and 2025. Previously, this requirement applied only to businesses with more than 50 employees.
The requirement applies to 14 sectors, and fines for non-compliance amount to AED 96,000 ($26,100) in 2024 and AED 108,000 ($29,400) in 2025.
Financial reporting and tax obligations
Financial reporting in Dubai is relatively simple. However, it’s important to consider tax reporting requirements depending on the jurisdiction. Taxes are charged on net accounting profits.
Note that once you exceed the threshold of 375,000 AED, you will need to pay VAT at a 5% rate. Corporate tax on profits will also be charged at a 9% rate.
The importance of networking and participating in business events
Participation in business events and networking will help you establish useful connections and attract new clients. Attending such events also strengthens your business reputation and expands market horizons.
What to do and not do when starting a business in Dubai
Do:
- Research the local market and culture.
- Carefully choose your jurisdiction.
- Participate in exhibitions and forums.
Don’t:
- Ignore UAE etiquette rules.
- Neglect document submission requirements.
- Rush to withdraw investments.
Starting a business in Dubai is closely linked with choosing the right property. To ensure a successful launch, contact Livrichy. The specialists will help you find ideal properties for business and personal life tailored to your needs.
sources used
Dubai Statistics Center https://www.dsc.gov.ae
Dubai Chamber of Commerce https://www.dubaichamber.com
- Ministry of Economy of UAE https://www.moec.gov.ae
- UAE Government Portal https://u.ae
- Federal Tax Authority https://www.tax.gov.ae
- MoHRE mohre.gov.ae.
