Every decision involved in starting a company in Dubai, in the order you actually have to make them, with the route that fits your situation at the end of each one
Setting up a business in Dubai is seven decisions taken in a fixed order. Get the order wrong and you pay twice: once for the license you bought, and again for the amendment that fixes it. The most common mistake is starting with the question everybody asks first, which is mainland or free zone. That is the third decision, not the first, and answering it before you have settled your activity is how people end up with a license that does not cover what they actually sell.
This hub sets out the whole path. Each stage explains one decision, tells you who decides it and what it costs, and hands you to the specific setup route that matches your answer. If you already know where you are, jump straight to that stage.
The Seven Decisions, in Order
The sequence matters because each decision constrains the next. Your activity determines which license types are open to you. The license type constrains the legal forms. The legal form and your customer base together decide mainland or free zone. Only then does anything get registered.
| Order | The decision | What it locks in |
|---|---|---|
| 1 | Do you need a company at all? | Company versus freelance permit, and your tax starting point |
| 2 | What is your business activity? | License type: commercial, professional, industrial, or another category |
| 3 | Mainland or free zone? | Whether you can sell to UAE customers directly, and your tax position |
| 4 | What legal form, and who owns it? | Liability, share capital, and whether an agent is involved |
| 5 | Where will the business sit? | Premises cost, and the ceiling on how many visas you can sponsor |
| 6 | Who needs a visa? | The immigration file, and your hiring timeline |
| 7 | How will you stay compliant? | Banking, corporate tax, VAT, renewals, and the exit route |
Work Through It Stage by Stage
Each stage below covers one decision in depth: what you decide, what you need, where you go, how long it takes, and what it costs. They run in order, and each one hands you to the next.
| Stage | The decision it settles |
|---|---|
| Where to start | Do you need a company at all, and in what order everything comes |
| Activity and license type | The selection that determines your license and legal form |
| Mainland or free zone | Where your customers are, and whether your activity qualifies for 0% |
| Legal form and ownership | LLC, sole establishment, civil company or branch, and who is liable |
| Register and license | Trade name, approvals, premises, notarization, payment |
| Visas and immigration | Establishment card, visa quota, and who actually needs sponsoring |
| Operating legally | Banking, corporate tax, VAT, and hiring |
| Renewals and exit | The annual calendar, amendments, and closing properly |
Decision One: Do You Need a Company at All?
Most people who ask how to open a company in Dubai are really asking how to invoice clients legally. Those are different questions with different answers.
If you are one person selling your own skill, with no employees and no stock, a freelance permit usually does the job for less money and less administration. The tax difference is significant and rarely explained. The Federal Tax Authority treats a freelancer as a natural person, and a natural person’s business is only subject to corporate tax once total turnover exceeds AED 1 million in a calendar year. A company is a taxable person from its first day.
Choose the company when you need to employ people, trade goods, take investment, or present a corporate counterparty to clients who will not contract with an individual.
Freelance permit instead of a company: the full route
Decision Two: What Is Your Activity?
Your activity is the foundation. The UAE government portal is explicit that identifying the business activity matters because it is the basis for selecting the legal form and the type of license, whether commercial, industrial or professional, and there are more than 2,000 activities to choose from. The legal form must match the activity.
The practical split is simple. A commercial license covers buying and selling. A professional license covers services delivered through personal skill and qualification, and it comes with credential checks that a commercial license does not. An industrial license covers manufacturing and processing. Businesses that mix advice with the sale of goods usually need two activities or a different structure entirely.
Decision Three: Mainland or Free Zone?
This is the decision everyone starts with and it should be third. The honest version is short: a free zone company cannot sell directly into the UAE mainland market. If your customers are UAE businesses and consumers, that points to the mainland. If you sell abroad, a free zone is usually cheaper and faster.
The tax side is where most advice goes wrong. A free zone address does not by itself deliver 0% corporate tax. The 0% rate applies to Qualifying Income, and Qualifying Activities are an exhaustive list set by Ministerial Decision No. 229 of 2025. Manufacturing, processing, logistics, fund management and distribution from a Designated Zone are on it. Consultancy, media and creative services are not. Any transaction with a natural person is an Excluded Activity.
| If your business is | Sell to UAE market? | Realistic tax expectation |
|---|---|---|
| Manufacturing or processing in a free zone | Via distributor | Qualifying Activity, so 0% is genuinely available |
| Logistics for other people’s goods | Via distributor | Qualifying, provided you never take title |
| Consultancy from a free zone | Via distributor | Not a Qualifying Activity, so standard rates |
| Selling online to UAE consumers | Mainland license needed | Consumer sales are an Excluded Activity |
| Any mainland company | Directly | Standard rates: nil to AED 375,000, then 9% |
Decision Four: Legal Form and Ownership
Foreign investors can own mainland companies outright. Federal Decree-Law No. 26 of 2020, consolidated by Federal Decree-Law No. 32 of 2021, abolished the majority-Emirati shareholder requirement and removed the obligation for branches of foreign companies to appoint a UAE national service agent.
Read that carefully, because it is narrower than the headlines. It amended the Commercial Companies Law. Professional forms such as sole establishments and civil companies sit outside that framework, which is why a local service agent agreement still appears in the official mainland setup path for non-GCC professionals. The agent is an administrative representative on a fixed fee, not a shareholder, and takes no share of profits.
Decision Five: Premises, and the Visa Ceiling Nobody Mentions
The space you take is not just a cost line. It sets how many residence visas your company can sponsor. A flexi-desk satisfies a free zone license and caps you in the low single digits. An office raises the ceiling roughly with floor area. A mainland license requires a registered Ejari tenancy regardless of whether a customer ever visits.
Size this against your year-two headcount, not your first month. Upgrading a facility mid-year costs more than taking the right one at the start.
Decision Six and Seven: Visas, Then Staying Compliant
Your company cannot sponsor anyone until it holds an active license and an establishment card, which is the electronic record connecting the business to the immigration system. Only then does each person go through an entry permit, a medical fitness test, Emirates ID biometrics, and the residence visa itself.
After that the recurring obligations begin: a corporate bank account, corporate tax registration, VAT once you cross the threshold, annual license renewal, and eventually either an amendment or an exit.
Six questions, about a minute. This points you at the route that matches your situation. Every answer it can give is also listed in the table below, so nothing here is required to find your path.
This tool needs JavaScript. The full list of routes is in the table below, which covers every answer the tool can give.
Find the Route That Matches Your Situation
Each route below is a complete step-by-step path for one specific kind of business, with the authorities, documents, fees, and pitfalls that apply to it.
| If this is you | Your route |
|---|---|
| Selling to UAE businesses and consumers, mainland | Business setup on the Dubai mainland |
| A qualified professional opening a practice | Mainland professional services company |
| Selling online to UAE customers | Mainland e-commerce business |
| A solo consultant with international clients | Solo consultancy in a free zone |
| Importing, exporting, or re-exporting goods | Free zone trading company |
| Holding stock and shipping orders | Free zone e-commerce and fulfilment |
| Media, production, or creative work | Media or creative company in a free zone |
| Manufacturing, processing, or warehousing | Industrial or warehousing business |
| Regulated financial services | Authorization in DIFC or ADGM |
| An overseas company opening a UAE arm | Branch of a foreign company |
| One person, selling your own skill | Freelance permit instead of a company |
What It Costs, Honestly
We do not publish a single headline setup figure, because there is no such thing. Free zone package pricing is promotional, sits behind lead-capture calculators, and changes with the season. Where we could not read a fee from an authority’s own published material, we say so rather than repeat a number from a setup agent.
What we can give you is the shape of the budget. The license is rarely the largest line. Premises and immigration usually are, and the recurring annual cost matters more than the one-time setup cost.
| Cost line | One-time or recurring | What drives it |
|---|---|---|
| Trade license | Annual | Activity, authority, and license type |
| Premises | Annual | Desk, office, or warehouse. Also sets your visa ceiling |
| Establishment card | Annual | Required before you can sponsor anyone |
| Residence visas | Per person, multi-year | Headcount. Usually the biggest surprise |
| Customs registration | Annual | Only if you move physical goods |
Frequently Asked Questions
What is the first thing I should decide when setting up in Dubai?
Whether you need a company at all, then what your activity is. Most people start with mainland versus free zone, which is the third decision. Choosing a jurisdiction before you have settled your activity is the most common and most expensive sequencing error, because the activity determines which license types and legal forms are even available to you.
Can a free zone company sell to customers in the UAE?
Not directly. A free zone license does not grant access to the UAE mainland market. To reach local customers you need a mainland distributor, a commercial agent, or your own mainland branch, and goods crossing from a free zone into the mainland are treated as an import.
Is corporate tax really 0% in a free zone?
Only for Qualifying Income. Qualifying Activities are an exhaustive list, and consultancy, media and creative services are not on it. Transactions with natural persons are separately an Excluded Activity. Manufacturing, processing, logistics and distribution from a Designated Zone do qualify. The rate attaches to what you do, not to your address.
Do I need an office to get a trade license?
Yes, in some form. A mainland license requires a registered Ejari tenancy. A free zone license requires at least a flexi-desk. There is no route that involves no registered space at all, and the space you take determines how many residence visas you can sponsor.
How long does it take to set up a business in Dubai?
A free zone company with a desk can be licensed in one to three weeks. A mainland company typically runs three to six weeks. Anything involving attestation of foreign documents, a regulated activity, or a built facility runs substantially longer, and attestation is usually the bottleneck rather than the licensing itself.
Can I own 100% of my company as a foreigner?
For most mainland commercial activities, yes, since Federal Decree-Law No. 26 of 2020 took effect in early 2021. Free zone companies have always allowed full foreign ownership. The exceptions are activities of strategic impact, which the Cabinet may restrict, and professional forms, where an administrative local service agent can still be required.
What happens if I pick the wrong license?
Adding or changing an activity is a paid license amendment, not an internal decision, and in some cases the license type itself has to change, which means restructuring. This is why the activity decision comes before the jurisdiction decision.
Official Sources
- The UAE Government Portal, Steps to start a business on the mainland
- The UAE Government Portal, Full foreign ownership of commercial companies
- Ministerial Decision No. 229 of 2025 on Qualifying Activities and Excluded Activities
- Federal Tax Authority, Corporate Tax Guide: Taxation of natural persons
- Federal Tax Authority, corporate tax registration
Information current as of July 2026. Setup costs are commercial and change frequently, so no single headline figure is given here. This hub is general information, not legal, tax, or immigration advice. Verify current requirements with the relevant authority before committing.