A Guide to Setting up a Business in UAE

Do you have plans of setting up a business in UAE? Well, it cannot be a bad idea. The UAE government often introduces new policies and regulations in order to encourage investments and startups in the country. Besides, it is also comparatively easy for foreigners to do business here with the business-pro laws and reforms.  Hence, it is a good idea to get on board with your business idea and kick-start your journey in the booming economy of the United Arab Emirates.

But, before making any final decision, it is important to sit and analyze the materialistic and functional requirements of the business. You also need to seek proper guidance and assistance in planning, conceptualizing, researching, budgeting, and other relevant components of a business. This article highlights all the important phases of setting up a company in the UAE without any hassles. 

Benefits of starting a business in the UAE 

  • Strategic location 
  • Competent trade policy 
  • Favorable government laws
  • Economic diversification 
  • Flexible to conduct business operations across UAE 
  • Zero restrictions on visa applications 
  • Freedom to choose multiple activities under one license 
  • Zero tax regime
  • Foreign ownership 

Points to consider while setting up a business in UAE 

  • Location – When you choose a location to set up company Dubai, you must find a place that has easy accessibility to ports, warehouses, storage units, etc. Hence, you must make sure your business is getting all the right facilities and local amenities for its smooth operation. Furthermore, it must be a central location for the clients as well as employees to reach the company conveniently. 
  • Business activities – Every jurisdiction has its own list of business activities. So, you must choose the right activity for your business. Also, remember to list down all the selected activities while applying for your business license. In case of any failure, the business, as well as its owner, might face hefty legal consequences.
  • Budget – When you start a business in UAE, it requires a lot of investment and costs. For example, license fees, visa fees, office rent, transportation, inventory, and many other expenses. Besides, many free zones mandate paid-up capital requirements and lodgement of financial audit reports. Hence, every business owner must be well aware of the budget placement and the cost required at every phase of company formation. 
  • Corporate requirements – Some of the corporate requirements include office lease, staff recruitment, energy resources, funds, etc. Therefore, business owners must pay keen attention to these requirements as they are a necessity for the smooth operation of the business. Moreover, they must also keep upgrading them depending upon the growth and expansion of their business.   

Legal structures available for company setup in UAE 

  • Sole Proprietorship – This company structure is fully owned by a single shareholder, basically an individual. And therefore, that individual would possess full control over company operations as well as profits. Individuals of any nationality can establish a sole proprietorship company, except a commercial or industrial company, which only UAE and GCC nationals can have possession of.
  • Civil Company – A civil company requires the involvement of a local sponsor who will hold 51% shares of the company, the rest being held by the foreign investor. Besides, professionals from any field can open a civil company in the UAE. For example, doctors, accountants, lawyers, etc. 
  • Limited Liability Company(LLC) – A Limited Liability Company can have two to fifty shareholders. Moreover, each shareholder is liable for the percentage of shares they hold in the company. Similarly, profits and losses are also shared among them accordingly. 
  • Branch Company – Any company established within or outside the UAE can open its branch in the UAE by following proper legal procedures. In addition, the parent company owns the branch as well as fully controls its operations. However, only a local trading firm can export goods for the branch. 
  • Free Zone Company – A Free Zone Company(FZC) can have two to five shareholders. Usually, free zone companies enjoy several benefits and incentives, but when it comes to trade, their rights are limited. For example, they cannot trade directly with the UAE market. Apart from that, there might be additional requirements for starting a business in a free zone. 
  • Freelance Business – Any individual or professional who wants to initiate a freelance business in UAE can easily do so. All they need to do is register their business with an application form, their updated CV, bank reference letter, and a notarized Registry Identification Code Form.

Also read the post: How to Do Company Formation in Dubai?

Key steps for setting up a business in UAE 

  • Choose a business activity

    The first and foremost step in the company formation process is choosing a business activity. This further helps you determine the jurisdiction as well as the type of license you might require.
    The UAE licensing authority lists thousands of activities that investors can choose from. Some authorities even allow selecting more than one activity, provided they are all clearly mentioned in the license application form. Any failure could lead to legal issues further down the line.

  • Select a business location/jurisdiction

    The UAE offers three different locations for company setup – Mainland, Free Zone, and Offshore. An investor can choose any jurisdiction according to their business requirements and preferences. However, the laws and regulations of business setup are different in a different jurisdictions, which the investor has to abide by at any cost.

  • Determine the form of business structure

    When you plan to start a business in the UAE, you also need to pick the legal structure of the company that you want to establish. This is a very vital step for any business as it helps to organize and control the resources and assets. Hence, it should be decided at the initial stages of company setup planning.

  • Pick a trading name

    A trading name is an important element for any company as it helps identify the company’s products and services in the market. However, there are certain rules that every business owner must follow while picking a trading name for the company. Any violations of these rules might lead to grave consequences.

  • Apply for a trade license

    Once you get approval for the company name and activity, it’s time to make an application for the trade license. Additionally, the licensing structure in different jurisdictions depends on the business activity company chooses to perform in the UAE. Hence, the documentation and legal formalities also vary accordingly.

  • Register the business

    For registering your company in the UAE, you need to get all the approvals from relevant government authorities, including some external agencies. The procedure for the same also depends on the company type and activity. 

After completing the above steps, the investor has to further accomplish some basic tasks to effectively setting up a business in UAE. For instance, 

  • Draft a Memorandum of Association 
  • Find an office space 
  • Get the tenancy contract 
  • Obtain initial approvals
  • Collect the trade license 
  • Apply for required visas 
  • Open a business account 

Documents required to set up company Dubai 

  • Application form 
  • Business plan 
  • Copy of passport of business owner/shareholders/directors 
  • Specimen signature of owner/shareholders/directors/managers 
  • Letter of intent
  • Board resolution for appointing a company manager or director 
  • Power of attorney handed over to company manager or director 
  • MOA and AOA 
  • Passport-sized photograph of company manager/director 
  • Proof of share capital with complete information
  • Trade name registration approval 
  • Tenancy contract 

Need further advice for setting up a business in UAE? Contact the experts of Shuraa Business Setup at +97144081900 or simply send a text on WhatsApp at +971507775554. You may also get in touch with us via email at


Sakina Burhan is a good experience writer, blogger and social media promoter by providing valuable information which helps readers to get more ideas.

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