You’ve decided to start a business in Dubai. Great choice. But what happens next?
Most people think business setup means filling out a form and getting a license. The reality involves more steps, but nothing complicated if you know what to expect.
Here’s what actually happens when you set up a company in Dubai.
Deciding Between Free Zone, Mainland, or Offshore Company Setup
This is step one, and it matters more than most people realize.
Free zone companies give you 100% ownership and operate from designated areas like DMCC, IFZA, or Ajman Free Zone. You can trade internationally without restrictions.
Mainland companies let you work directly with UAE customers and operate anywhere in the country. You can set up in Dubai or Abu Dhabi mainland.
Offshore companies work for holding assets or international business without a UAE office. Options include RAK ICC or JAFZA Offshore.
Your choice depends on what you’re selling, who your customers are, and your budget. As we covered in our guide on why business setup isn’t one-size-fits-all, each option serves different business needs.
Choosing Your Business Activities and Trade Name
Every Dubai business license lists specific activities you’re allowed to do.
Want to sell products? You need trading activities. Offering consulting services? That requires professional activities. Running a restaurant? Tourism and hospitality activities apply.
You can’t just do anything. If an activity isn’t on your license, you can’t legally operate in that area. Experienced business owners add extra related activities from the start to avoid amendments later.
Your trade name also needs approval. It can’t match existing companies, use certain restricted words, or violate trademark rules. The approval process checks against thousands of registered names.
Getting Initial Approval and Reserving Your Company Name
Once you’ve picked your setup type and activities, the actual registration starts.
For free zones, you apply directly to the zone authority. For mainland, you go through the Department of Economic Development. Each authority reviews your application and business plan.
They check if your proposed activities match the location rules. Some activities need special approvals from government ministries. For example, anything related to education needs approval from KHDA or the Ministry of Education.
After initial approval, your company name gets reserved. This reservation lasts for a limited time, so you need to complete the next steps quickly.
Finding Office Space or Getting a Virtual Office
Every company in Dubai needs a registered address. But that doesn’t always mean renting a full office.
Some businesses get a virtual office, which provides a business address and occasionally a meeting room. This works great for online businesses or consultants who don’t need daily office space.
Others need physical offices. Free zones often have their own office buildings where you must rent space. Mainland companies can lease anywhere that’s properly zoned for business.
Office space solutions affect your costs significantly. A virtual office might cost AED 5,000 yearly, while a physical space runs much higher depending on location and size.
Submitting Documents and Getting Your Trade License
Now comes the paperwork phase.
You’ll need passport copies, photos, proof of address, business plans, and more. Documents from outside the UAE need attestation and legalization from your home country and UAE authorities.
The authority reviews everything, processes your application, and issues your trade license. This license is your legal permission to operate.
Processing times vary. Free zone licenses often come through in one to two weeks. Mainland licenses might take three to four weeks because of additional government approvals.
Opening a Corporate Bank Account in Dubai
Getting your license doesn’t mean you can start taking payments yet. You need a business bank account.
Bank account opening in Dubai requires meeting with bankers, showing your business plan, and proving legitimate business operations. Banks ask detailed questions about your customers, transactions, and business model.
Different banks work better with different business types. Some prefer trading companies, others like service businesses. Having the right introduction and proper documentation speeds up approval.
Many businesses also need payment gateway services to accept online payments. This is separate from banking and requires additional setup.
Setting Up Accounting, VAT, and Corporate Tax Compliance
The final setup step involves getting your finances organized.
If your revenue exceeds AED 375,000, you need VAT registration. Even if you’re below that threshold, proper accounting and bookkeeping from day one saves problems later.
The UAE now has corporate tax on business profits. Setting up proper tax compliance early prevents issues when filing time comes.
Get Your Business Setup Done Right
Business setup in Dubai involves multiple steps, but each one is straightforward when you know what to expect.
Smart Zone handles the entire process for entrepreneurs. We’ve completed over 35,000 company formations and know exactly what each step requires.
Ready to start your company without the confusion?
Contact our team and let’s get your Dubai business set up properly from day one.
