How do I set up my small business in Dubai?

To set up a small business in Dubai, you must first choose the correct jurisdiction (Mainland or Free Zone), define the exact licensed activity, secure the trade licence from the relevant authority, open a compliant corporate bank account, and register for VAT and Corporate Tax where applicable. The real success factor is not speed or cost—it is getting the structure bank-ready, tax-ready, and regulator-proof from day one.

This guide is different — and intentionally so

Most pages about business setup in Dubai read like brochures. They focus on “cheap packages,” hide regulatory risks, and skip what banks, auditors, and regulators actually look for.

This guide is written the way we advise founders, CFOs, and investors inside boardrooms.

It reflects how business setup really works in Dubai in 2026, not how consultants market it.

This content is authored exclusively for Business & Beyond, a premium UAE business setup consultancy specialising in long-term compliance, not short-term formations.

Step 1: Define what you are actually setting up (not what you think)

Before choosing Mainland or Free Zone, you must lock three things:

1. Business activity (non-negotiable)

Your licence activity determines:

• Which authority approves you
• Whether VAT registration applies
• Whether audits are required
• Whether banks will onboard you

Common mistake:
Founders choose a “broad” activity to stay flexible. Banks and regulators see this as risk, not flexibility.

2. Ownership & residency profile

• UAE resident vs non-resident
• Individual vs holding company
• Single founder vs partners

This impacts:

• Shareholding structure
• Visa eligibility
• Substance and ESR exposure

3. Revenue model

Banks and tax authorities now assess:

• Where income is earned
• Who controls contracts
• Where value is created

If this is unclear at setup stage, bank account delays are almost guaranteed.

Step 2: Choose the right jurisdiction — Mainland vs Free Zone

Dubai Mainland (onshore)

Regulator: Department of Economy and Tourism (formerly DED)

Best suited if you:

• Serve UAE customers directly
• Need government or semi-government contracts
• Require unrestricted UAE operations

Reality check (2026):

• Mainland companies are fully subject to UAE Corporate Tax
• Banks expect stronger substance and documentation
• Audits are increasingly requested by banks, not just regulators

Cost range (realistic):

• Licence & registration: AED 15,000 – 25,000
• Office / Ejari (minimum): AED 10,000 – 20,000
• Visa (per partner): AED 4,000 – 6,000

Free Zone company

Regulator: Respective Free Zone Authority
Oversight: Ministry of Economy (for ESR, UBO, AML coordination)

Best suited if you:

• Operate internationally
• Run consulting, trading, or holding structures
• Want faster setup and predictable costs

What blogs won’t tell you:

• Free Zone ≠ tax-free by default anymore
• “Qualifying Free Zone Person” status requires strict conditions
• Banks apply the same KYC scrutiny as Mainland companies

Cost range:

• Licence packages: AED 12,000 – 20,000
• Visas: Often bundled (1–3 visas)
• No Ejari required in many zones

Step 3: Licensing & legal registrations (what actually matters)

Regardless of jurisdiction, the following are mandatory:

Trade licence issuance

• Activity-specific approval
• Shareholder documentation
• Constitutional documents aligned with AML standards

Ultimate Beneficial Owner (UBO) filing

• Mandatory across Mainland & Free Zones
• Required under UAE AML framework
• Incorrect filings can block bank onboarding

Economic Substance Regulations (ESR)

Applies if you conduct:

• Distribution
• Service centre
• HQ, IP, shipping, etc.

Ignoring ESR is one of the fastest ways to get flagged by banks.

Step 4: Banking — the real bottleneck in Dubai business setup

This is where most “cheap” setups fail.

What banks actually assess:

• Clarity of business model
• Contract flow and counterparties
• Founder background & residency
• Expected turnover vs licence activity

Timeline reality (2026):

• Standard onboarding: 3–6 weeks
• Higher-risk profiles: 6–10 weeks

What works in real life:

• Activity-aligned licence wording
• Clean shareholder documentation
• Early tax and VAT positioning

This is why serious founders engage a business setup consultant in Dubai who understands banking—not just licensing.

Step 5: Tax & compliance — no longer optional

Corporate Tax (CT)

Regulator: Federal Tax Authority

• Registration mandatory for all companies
• 9% applies above AED 375,000 taxable profits
• Free Zones must meet qualifying conditions to retain 0%

VAT

• Mandatory if turnover exceeds AED 375,000
• Voluntary registration from AED 187,500
• Incorrect VAT positioning triggers audits

Audit expectations

Even where audits are not legally mandated:

• Banks increasingly demand audited financials
• Investors and counterparties expect them

Smart founders design audit-ready structures from day one.

Step 6: Visas & substance planning

A licence without real substance is now a red flag.

Consider:

• How many visas you truly need
• Whether staff or directors are resident
• Office vs flexi-desk acceptability

Banks and regulators cross-check:

• Visa issuance
• Office presence
• Revenue declarations

What most consultants say vs what actually works

What blogs say	What works in reality
“Set up in 3 days”	Licensing may be fast; banking is not
“No tax in Free Zones”	Only if conditions are met
“No audit required”	Banks often require it anyway
“Any activity works”	Banks reject vague activities

Realistic timeline (end-to-end)

• Licence issuance: 3–10 working days
• Visa processing: 7–14 days
• Bank account: 3–8 weeks
• Tax registrations: Parallel, within 30 days

Plan for 4–8 weeks for a clean, bank-ready setup.

Why founders choose Business & Beyond

We do not sell “packages.”
We design structures that survive audits, banks, and tax scrutiny.

Our approach integrates:

• Licensing
• Banking logic
• Corporate Tax & VAT positioning
• Audit and compliance readiness

That is the difference between forming a company and building a business.

Final guidance

If you are asking “How do I set up my small business?”, the real question is:

Do you want a licence — or a company that banks, regulators, and investors trust?

Dubai rewards founders who plan correctly from day one.
It penalises shortcuts.