Business Setup in UAE
Business Setup in UAE
Starting a business? One question that always comes up is: where is the best place to set it up? Many smart entrepreneurs are now choosing the UAE—and it’s easy to see why. With its helpful government rules and fast registration process, starting a business in the UAE is smooth and rewarding.
In this article, we’ll guide you through key details like business zones, license types, company formats, and the exact steps to register your business the right way.
Top Jurisdictions to Start Your Business in the UAE
Before you begin your business setup in the UAE, it’s important to pick the right zone for it.
In the UAE, there are three main types of jurisdictions you can choose from.
Mainland
A mainland jurisdiction refers to a specific area within the UAE. Businesses set up in this area are called onshore companies, and they have the flexibility to operate anywhere in the world without restrictions.
Freezone
A Freezone jurisdiction refers to an economic area regulated by the Free Zone Authority. The rules of the authority apply only to businesses within the zone, and they offer benefits like corporate tax exemption, full foreign ownership, and easy business setup.
Offshore
Businesses based outside the UAE are known as offshore companies, falling under offshore jurisdiction.
Entrepreneurs benefit from perks like easy international expansion, low tax rates, and fewer government regulations when setting up an offshore company.
Business Structures You Can Choose in the UAE
The UAE allows the setup of different types of business entities to support all kinds of entrepreneurs. Let’s explore them one by one.
Sole Proprietorship
In a sole proprietorship, one individual owns and controls the entire business.
This individual has full control over the company and is completely responsible for both the profits and the losses.
Branch of a GCC Company
A GCC branch is a local extension of a company based in a Gulf Cooperation Council (GCC) country such as Saudi Arabia, Qatar, or the UAE. It shares the same name and is operated by the same management team as the parent company.
A GCC branch is a local extension of a company based in a Gulf Cooperation Council (GCC) country such as Saudi Arabia, Qatar, or the UAE. It shares the same name and is operated by the same management team as the parent company.
Branch of a GCC Company
A civil company is a service-based partnership between two or more professionals in Dubai.
This type of business is common among experts in areas like law, finance, healthcare, and consulting.
Limited Liability Company (LLC)
An LLC is a popular business setup where shareholders enjoy limited liability. It allows between 2 to 50 shareholders, and each person’s risk is limited to the value of their shares.
Branch of a Local Company
A branch office is simply a part of the main company opened in another location. It doesn’t have its own legal identity but can perform various operations distinct from the head office.
Holding Company
Holding companies exist to own and manage assets or shares of other companies, known as subsidiaries.
They don’t involve themselves in direct business tasks like production, sales, or services.
Public Joint Stock Company
In a public joint stock company, the business capital is divided into shares that are available for public trading on the stock market.
Representative Office of a Foreign Company
A representative office works as a branch of the parent company and mainly handles non-commercial tasks like marketing, brand awareness, and research. It is not allowed to carry out any revenue-generating activities in the UAE.
Private Joint Stock Company
In a private joint stock company, the company’s capital is divided into equal-value shares that are privately held and not offered for public sale.
Types of Business Licenses for Company Formation in UAE
Let’s explore the various types of licenses you can choose when starting a business in the UAE.
Commercial License
A commercial license allows companies to carry out trading, export, and import activities across the UAE.
Industrial License
An industrial license is required if your company carries out production or factory-related activities.
Professional License
If you're offering services using your professional knowledge or creative talent, you’ll need a professional license.
Tourism License
If your company offers tourism services, you must get a tourism license from the Department of Tourism and Commerce Marketing (DTCM).
Steps to Start a Business in the UAE
The business setup process in the UAE depends on the location you choose. Below are the key steps for launching your company in the mainland or a free zone.
UAE Mainland
Step 1 – Identify your business activity
Figure out what your company will sell or the services it will offer.
Step 2 – Choose the right company structure
Decide if you want to form an LLC, sole proprietorship, or branch office.
Step 3 – Register your business name
Pick a unique trade name and reserve it with the authorities.
Step 4 – Apply for initial approvals
Get the first set of approvals from the relevant UAE government departments.
Step 5 – Prepare legal documents
Draft important papers like the Memorandum of Association (MoA) and Articles of Association (AoA).
Step 6 – Decide your business location
Select a physical or virtual location within a free zone, mainland, or offshore area.
Step 7 – Secure extra approvals (if needed)
If your business is in a regulated industry, get approvals from concerned departments.
Step 8 – Submit your application and documents
File all the required forms and documents with the relevant authorities.
Step 9 – Apply for your business license from DED
Choose the correct license type and apply through the Department of Economic Development.
Step 10 – Pay fees and register with the Chamber of Commerce
Complete payments and officially register your company to start operations.
UAE Free Zone
Step 1 – Identify your business activity in the free zone
Decide what kind of work your company will do — trading, services, consulting, or manufacturing.
Step 2 – Select your legal business type
Choose from the legal entities available in the free zone:
Step 3 – Choose and register your business name
Pick a unique and appropriate name for your company that follows the free zone guidelines.
Step 4 – Pick your office space or facility
Decide the location and type of workspace that suits your business operations.
Step 5 – Submit the application with required documents
Provide all necessary documents to apply for initial approvals from the free zone authority.
Step 6 – Complete payment and finalize your setup
Pay the setup and licensing fees to officially register your business in the free zone.