Living and doing business in Dubai may seem challenging, but with new laws, it has become the go-to place for thousands of foreigners to start their businesses and live there successfully almost every year. Dubai welcomes global entrepreneurs with open arms.
Dubai is one of the world’s top business centers. The reason foreign investors prefer Dubai as an investment destination is that it does not impose a personal income tax, fosters a business-friendly environment, and is strategically located between the world’s major economies. This is a destination where businesses can easily access Asian, European, and African customers.
However, the business formation process is quite complicated and must be carried out with proper planning and expertise. Many new entrepreneurs are perplexed by various zones, types of licenses, paperwork requirements, and immigration regulations. Learning these fundamentals can prevent excessive errors.
This comprehensive article covers everything a foreign business owner needs to know to open a business in Dubai. We break down every step to help you move forward with confidence.
Can a Foreigner Really Own 100% of a Dubai Company?
Absolutely. Foreign business owners were previously required to hold at least 51% of the shares in mainland companies. The government changed this rule through Federal Decree-Law No. (26) of 2020. Now foreign investors can own their entire mainland business in most industries without local partners.
Different business activities have different rules. Check with legal experts or the DET before making final decisions about your ownership structure.
Role of Business Consultants in Business Setup For Foreigner in Dubai
Setting up alone is possible, but most successful entrepreneurs work with professional consultants like XYZ. This becomes especially important when:
- UAE business laws are new to you
- Your company needs several employee visas
- You plan complex operations or have multiple business partners
XYZ does it all; name registration, final licensing, bank establishment and government contact. Guidance by professionals eliminates typical pitfalls, resulting in fewer delays and lower additional expenses.
Why Dubai is an Ideal Place for Foreign Entrepreneurs
Dubai is one of the finest cities in the world to start a new business. The government encourages foreign investment and entrepreneurship. Important industries, such as technology, property, shipping, and travel, continue to expand rapidly. Major advantages include:
- Complete foreign ownership is allowed in free zones and many mainland sectors.
- Zero personal income tax and no capital gains tax.
- Simple visa processes for business owners, workers, and families.
- A strong legal framework and a reliable banking sector.
- Perfect location connecting three continents.
Step-by-Step Process to Start a Business in Dubai as a Foreigner
Success requires following Dubai’s official procedures exactly. Failure to plan at every stage can lead to issues later on. Your full roadmap here is:
1. Choose the Right Jurisdiction: Mainland, Free Zone, or Offshore
The first significant decision you will make is to select the ideal business location. Dubai provides three distinct options:
Mainland
The Dubai Department of Economy and Tourism (DET) also issues licenses to the mainland businesses. Such businesses have the ability to operate in the UAE and abroad. Most sectors now allow foreign ownership up to 100%.
Best for: Businesses that intend to sell their products to customers in the United Arab Emirates, obtain government contracts or keep their offices in the city centers.
Free Zone
Special economic zones offer complete foreign ownership, tax benefits, and quick setup processes.
Major Dubai Free Zones:
- Dubai Multi Commodities Centre (DMCC)
- Dubai Internet City (DIC)
- Dubai Silicon Oasis (DSO)
- Dubai International Financial Centre (DIFC)
Best suited for: technology firms, import/export organisations, or international companies that focus on countries other than the UAE.
Offshore
Offshore zones, such as JAFZA Offshore or RAK ICC, cater to investment holding companies, wealth protection, and global business operations.
Best for: Asset management companies and international operations with no local UAE business.
2. Decide on the Business Activity
Companies must select approved business activities from official government lists. Dubai permits thousands of different activities across major sectors including:
- Import and export trading
- Online retail and e-commerce
- Production and manufacturing
- Professional consulting services
- Hotels and restaurants
- Transportation and shipping
Important: Your chosen activity must match the license type you request from authorities.
3. Choose a Company Structure
Your legal structure affects liability, ownership rules, and compliance requirements.
Popular Options:
- Sole Proprietorship
- Limited Liability Company (LLC) – the preferred choice for mainland operations.
- Free Zone Company (FZCO or FZE)
- Branch Office – for existing foreign companies expanding into Dubai.
Different structures require different minimum investments, paperwork, and ownership arrangements.
4. Reserve Your Trade Name
Companies need unique names that clearly describe their business purpose. Dubai enforces strict naming guidelines. Key rules include:
- No inappropriate or religious references
- Cannot be similar to existing company names
- Must match your planned business activities
Reserve your preferred name through DET’s online system or your chosen free zone authority.
5. Apply for Initial Approval
This step provides official permission to continue with your business registration. Authorities issue a no-objection certificate (NOC) at this stage.
Here are the essential documents required:
- Passport photocopies
- Planned business activities
- Reserved trade name certificate
- Completed application forms
6. Draft the Memorandum of Association (MoA) or Local Service Agent (LSA) Agreement
Mainland LLCs require an MoA document that outlines ownership percentages, capital contributions, and company rules. Sole proprietorships and professional licenses need Local Service Agent Agreements instead.
Recent law changes eliminate the old requirement for UAE nationals to own 51% of most businesses.
7. Select Your Business Location
Most businesses need physical office space. Mainland companies and some free zones require tenancy contracts or Ejari certificates for final licensing.
Available options:
- Shared coworking facilities
- Flexible desk arrangements
- Storage and warehouse space
- Complete private office suites
Several free zones also provide virtual office solutions.
8. Obtain Necessary Approvals from Relevant Departments
Some business activities require additional permissions from specialized government departments:
- Dubai Municipality
- Ministry of Health
- Telecommunications Regulatory Authority (TRA)
- Food Safety Department (for restaurants and cafes)
Professional consultants help navigate these requirements efficiently.
9. Submit Final Documents and Pay Fees
Standard Documentation:
- Passport copies
- Detailed business plan
- Current visa copy (if residing in UAE)
- MoA or LSA agreement
- Ejari certificate (mainland companies)
- Initial approval and name reservation certificates
10. Obtain Your Trade License
Authorities issue your official business license after reviewing the documents and confirming payment of the fee.
Processing time: Between 2 weeks and 3 days, depending on business complexity and structure.
11. Apply for a Visa and Emirates ID
- Investor visa status
- Employee visa applications
- Family dependent visas
Medical examinations and Emirates ID registration are mandatory.
12. Open a Corporate Bank Account
Required Documentation:
- Official trade license
- MoA document
- Passport and visa copies for all partners
- Business plan or sample invoices
- Emirates ID cards
Costs of Starting a Business in Dubai
Total expenses depend on your business category, visa requirements, location choice, and selected jurisdiction.
| Expense Category | Estimated Cost (AED) |
| Trade Name & Initial Approval | 1,000 – 2,500 |
| License Fees (Mainland) | 12,000 – 18,000 |
| License Fees (Free Zone) | 10,000 – 25,000 |
| MoA Drafting/Notarization | 1,500 – 2,500 |
| Office Rental (Ejari) | 10,000+ |
| Visa (Investor/Employee) | 3,500 – 7,500 |
| Medical, Emirates ID | 1,500+ |
| Total Estimate | 35,000 – 60,000+ |
The prices of actual costs vary depending on the size of the company and the chosen zone.
Conclusion
The business environment in Dubai presents unparalleled opportunities for foreign entrepreneurs.
Frequently Asked Questions (FAQs)
Can a foreigner own 100% of a company in Dubai?
Absolutely. Recent legal changes permit 100% company ownership of most mainland business sectors and all free zones.
How long does it take to start a business in Dubai?
The timeline ranges from 3 days to 3 weeks depending on the business type.
What type of license do I need?
License type depends on your planned business activities.
Can I run a business in Dubai without being in the UAE?
Yes, particularly in free zones.
Do I need a physical office to set up a business?
Mainland companies require physical office space, while many free zones offer flexible options.