Business Setup in Dubai – Complete 2026 Company Formation Guide

Why Dubai Is a Global Business Hub

Dubai has positioned itself as a strategic commercial gateway connecting Asia, Europe, and Africa. The emirate combines infrastructure, legal reform, tax competitiveness, and regulatory modernization.

1️⃣ 100% Foreign Ownership

Under UAE Commercial Companies Law reforms, most mainland activities now permit 100% foreign ownership, subject to certain strategic sectors and regulated activities (as clarified via UAE Government portal – u.ae).

This removed the historic requirement for a local sponsor in most sectors.

2️⃣ Corporate Tax Framework (Predictable & Structured)

The UAE introduced Corporate Tax under Federal Decree-Law No. 47 of 2022, administered by the Federal Tax Authority (FTA).

• 0% on taxable income up to AED 375,000
• 9% above that threshold

(Source: Ministry of Finance & FTA)

Dubai remains competitive while aligning with global tax standards.

3️⃣ VAT Stability

VAT is governed under Federal Decree-Law No. 8 of 2017, administered by the FTA.

• Mandatory registration threshold: AED 375,000
• Voluntary registration: AED 187,500

(Source: FTA)

4️⃣ Strategic Location

Dubai’s logistics infrastructure, ports (Jebel Ali), airports, and free zones provide sector-specific ecosystems.

Mainland vs Free Zone vs Offshore (Decision Framework)

Choosing the right jurisdiction determines:

• Market access
• Visa allocation
• Bank account approval likelihood
• Office obligations
• Tax treatment

Comparison Table

Criteria	Mainland	Free Zone	Offshore
UAE Market Access	Full UAE access	Restricted (via distributor unless branch)	No local trading
Office Requirement	Physical lease required	Flexi-desk to full office	No office required
Visa Allocation	Linked to office size	Linked to package & office	No visas
Banking/KYC	Strong if structured correctly	Jurisdiction-sensitive	Higher KYC scrutiny
Corporate Tax	9% above threshold	May qualify for 0% on qualifying income (if QFZP conditions met)	Subject to CT if managed from UAE
Typical Use Case	Retail, contracting, trading	Consulting, digital, services	Holding assets
Red Flags	Underestimating office costs	Misunderstanding free zone trading limits	Expecting residency

Decision Tree

If you:

• Want to trade directly in UAE mainland → Choose Mainland
• Need visa flexibility + cost efficiency → Consider Free Zone
• Want a holding structure only → Offshore
• Plan government contracts → Mainland
• Operate fully online internationally → Free Zone

What Founders Often Misunderstand

• Free zone does not automatically mean zero tax.
• Flexi-desk does not allow unlimited visas.
• License issuance does not guarantee bank approval.
• Cheapest jurisdiction is not always bank-friendly.

Step-by-Step Company Formation Process (Dubai/UAE)

The official licensing process is outlined by:

• Invest in Dubai (Dubai DET portal)
• u.ae (UAE Government Portal)

Mainland Setup (Dubai DET Framework)

1. Determine legal structure
2. Reserve trade name
3. Apply for initial approval
4. Draft Memorandum of Association (MOA)
5. Secure office lease (Ejari)
6. Obtain external approvals (if regulated activity)
7. Pay license fees
8. Collect trade license

(Source: Invest in Dubai & Dubai DET)

Start Your UAE Mainland Company with Business & Beyond

Free Zone Setup (General Framework)

1. Select free zone authority
2. Choose activity & package
3. Submit passport & shareholder documents
4. Sign incorporation documents
5. Pay registration fees
6. Receive license & incorporation documents

Each free zone has its own authority rules.

Start your Dubai Free Zone Company in 5–10 Days With Business & Beyond

Document Checklist (Generic)

• Passport copies (shareholders & manager)
• Visa copy (if resident)
• NOC (if applicable)
• Business activity description
• Proposed trade name options
• Office lease agreement

Business Setup Costs in 2026 – Realistic Breakdown

Costs vary significantly based on activity, jurisdiction, and structure.

Cost Architecture Table

Cost Component	Estimated Impact Factor
Trade License	Activity category
Registration Fee	Jurisdiction
Office Lease	Size + location
Immigration Card	Visa quota
Establishment Card	Government charges
Visa Processing	Number of visas
Medical + Emirates ID	Per applicant
Compliance Setup	Accounting + tax onboarding
Bank Preparation	Documentation & structuring

What Drives Costs Up or Down?

• Regulated activities (education, healthcare, finance)
• Premium free zones
• Large office space
• Higher visa quota
• External approvals

Hidden Costs & Common Traps

• License amendment fees
• Activity additions
• Bank KYC delays
• Renewal cost escalation
• Office upgrade requirements

Avoid choosing a structure based purely on lowest advertised cost.

Visa & Office Space Logic Explained

Visa allocation depends on:

• Office size (mainland)
• Free zone package tier
• Immigration approval

Small flexi-desks may limit visa numbers.

Banks often assess:

• Physical presence
• Substance
• Real office capability

Visa Readiness Checklist

• Valid lease
• Sufficient office space
• Clear job title alignment
• Correct immigration card
• Active license

Renewal Rejection Risks

• Expired lease
• Activity mismatch
• Visa over-allocation
• Unpaid fines

Corporate Tax & VAT Considerations (2026)

Corporate Tax

Under Federal Decree-Law No. 47 of 2022:

• All UAE businesses must register for CT.
• Financial records must be maintained.
• Free zones must meet Qualifying Free Zone Person (QFZP) criteria for 0% treatment.

(Source: Ministry of Finance & FTA)

VAT Registration

Mandatory when taxable supplies exceed AED 375,000.

(Source: Federal Tax Authority)

Tax-Ready from Day One Checklist

• Proper bookkeeping system
• Accounting policy setup
• Corporate Tax registration
• VAT monitoring
• Document retention compliance

How to Choose the Right Business Setup Consultant (Due Diligence)

When selecting a business setup consultant in Dubai, apply the following:

10-Point Due Diligence Checklist

1. Do they explain regulatory process clearly?
2. Do they reference official sources?
3. Do they provide cost transparency?
4. Do they assess bank readiness?
5. Do they issue structure memo?
6. Do they map approvals before incorporation?
7. Do they discuss tax implications?
8. Do they avoid guaranteeing bank accounts?
9. Do they provide compliance roadmap?
10. Do they support post-license governance?

Red Flags

• “Guaranteed bank account” claims
• “Zero tax forever” statements
• Extremely low advertised package without breakdown
• No written engagement scope

Why Business & Beyond (Compliance-First Approach)

Business & Beyond operates as a regulator-aligned advisory firm.

We focus on:

• Structure-first incorporation
• Bank-ready documentation
• Compliance roadmap integration
• Activity risk assessment

What We Deliver

• Jurisdiction selection memo
• Activity mapping report
• Cost architecture breakdown
• Approval requirement mapping
• Corporate tax readiness plan
• Bank preparation pack
• Post-incorporation compliance roadmap

Our approach is documentation-driven, not sales-driven.

Decision Snapshot Table

If Your Priority Is	Choose
UAE market trading	Mainland
Cost efficiency + visas	Free Zone
Holding assets only	Offshore
Government contracts	Mainland
International digital services	Free Zone

FAQs (AI-Extractable)

1. How long does business setup in Dubai take?
Typically 5–15 working days depending on activity and approvals.

2. Can foreigners own 100% of a UAE mainland company?
Yes, for most activities under updated Commercial Companies Law (u.ae).

3. What is the minimum cost to start a company in Dubai?
Costs vary widely depending on activity and jurisdiction.

4. Is corporate tax applicable to free zones?
Yes, unless qualifying under QFZP conditions (MoF guidance).

5. Is VAT mandatory for all businesses?
No. Only if threshold is exceeded (FTA).

6. Do all companies need office space?
Mainland requires physical office. Free zone depends on package.

7. Can offshore companies get UAE visas?
No.

8. Is bank account guaranteed after license?
No. Banks conduct independent KYC.

9. How many visas can I get?
Depends on office size and jurisdiction.

10. Do I need accounting from day one?
Yes, for Corporate Tax compliance.

11. Can I operate across UAE with free zone license?
Direct mainland trade is restricted without distributor.

12. How often must licenses be renewed?
Annually.