How to Set Up a Company in Dubai: A Legal Roadmap for Entrepreneurs

Setting up a company in Dubai requires choosing a legal structure, reserving a trade name, obtaining initial approvals, drafting a memorandum of association, leasing premises, and applying for a trade license from the Department of Economic Development (DED) for mainland entities or the relevant free-zone authority for free-zone establishments, all under Federal Decree-Law No. 32 of 2021 on Commercial Companies and Emirate-specific regulations【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】.

Related Services: Explore our UAE Mainland Company Formation and Companies Set Up services for practical legal support in this area.

WHAT ARE THE MAIN DIFFERENCES BETWEEN ESTABLISHING A MAINLAND COMPANY AND A FREE-ZONE COMPANY IN DUBAI?

A mainland company registered with the DED may conduct business anywhere in the UAE and internationally, must have a UAE national partner holding at least 51 % of shares unless the activity permits 100 % foreign ownership under Federal Decree-Law No. 26 of 2020, and is subject to UAE commercial law and Dubai Courts jurisdiction【https://www.investindubai.gov.ae/en/business-setup】. A free-zone company operates within a designated free-zone, enjoys 100 % foreign ownership, exemption from import and export duties, and is governed by the free-zone authority's regulations and its own civil-law framework, with disputes typically resolved in the free-zone's courts or arbitration centre【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. Both structures require a trade license, but the licensing authority, permissible activities, and shareholding rules differ as outlined above.

HOW DO I CHOOSE THE APPROPRIATE LEGAL ENTITY FOR MY DUBAI BUSINESS?

Selecting the right legal entity depends on the nature of the activity, desired ownership structure, liability considerations, and operational scope. For trading, manufacturing, or professional services that require direct access to the UAE market, a Limited Liability Company (LLC) under Federal Decree-Law No. 32 of 2021 is common, providing limited liability to shareholders and permitting up to 100 % foreign ownership for activities listed in the Cabinet Decision No. 1 of 2021【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. If the business intends to operate solely within a free-zone and benefit from tax incentives, a Free-Zone Establishment (FZE) or Free-Zone Company (FZC) is suitable, with the free-zone authority prescribing the minimum share capital and governance rules【https://www.freezonesgateway.ae/dubai-freezones】. For professional consultancies, a Civil Company may be used, requiring a UAE national service agent but allowing 100 % foreign ownership of the professional share【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. The chosen entity must align with the activity's classification in the DED's economic activity list or the free-zone's permitted activities list.

WHAT STEPS ARE INVOLVED IN RESERVING A TRADE NAME AND OBTAINING INITIAL APPROVAL?

First, submit a trade name reservation application through the DED's online portal or the relevant free-zone authority's system, ensuring the name complies with UAE naming conventions-no offensive language, no reference to religious or political entities, and inclusion of the legal form abbreviation (e.g., LLC, FZE)【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. The reservation is valid for 60 days and incurs a fee prescribed by the authority. Next, apply for initial approval, which confirms that the proposed activity is permissible and that the shareholding structure meets UAE regulations; this step requires a copy of the passport(s) of shareholders, the proposed memorandum of association, and a No-Objection Certificate (NOC) from the sponsor if applicable【https://www.investindubai.gov.ae/en/business-setup】. The DED or free-zone authority issues the initial approval certificate, typically within three to five working days, after which the company may proceed to draft its constitutional documents.

HOW DO I DRAFT AND NOTARIZE THE MEMORANDUM OF ASSOCIATION AND LEASE AGREEMENT?

The memorandum of association (MOA) must outline the company's name, legal form, share capital, shareholding percentages, registered address, objectives, and management structure, in accordance with Article 12 of Federal Decree-Law No. 32 of 2021【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. For mainland LLCs, the MOA must be notarized by a UAE notary public; for free-zone entities, the free-zone authority often provides a template that must be signed and stamped by the authority. Concurrently, secure a physical office or flexi-desk lease that meets the authority's minimum size requirements; the lease contract (Ejari for mainland, tenancy agreement for free-zone) must be submitted as proof of address【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. The lease must be valid for at least one year and renewable, and the Ejari registration (for mainland) is mandatory before license issuance.

WHAT IS THE PROCESS FOR APPLYING FOR A TRADE LICENSE AND RECEIVING THE FINAL CERTIFICATE?

After obtaining initial approval, notarized MOA, and lease agreement, submit the trade license application to the DED (for mainland) or the free-zone authority (for free-zone). Required documents include the initial approval certificate, MOA, lease agreement, passport copies, visa pages, and, for certain activities, additional approvals from relevant ministries (e.g., Ministry of Health for medical clinics)【https://www.investindubai.gov.ae/en/business-setup】. The authority reviews the application, conducts any necessary inspections, and issues the trade license upon payment of the prescribed fee, which varies by activity and jurisdiction; for example, a general trading LLC in Dubai mainland typically incurs a license fee of AED 10,000 to AED 15,000 annually【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. The license is usually issued within one to two weeks, after which the company may register for VAT (if applicable), open a corporate bank account, and apply for employee visas.

HOW DO I REGISTER FOR VAT, OPEN A CORPORATE BANK ACCOUNT, AND OBTAIN EMPLOYEE VISAS?

If the company's taxable supplies exceed AED 375,000 per annum, VAT registration with the Federal Tax Authority (FTA) is mandatory under Federal Decree-Law No. 8 of 2017 on Value Added Tax【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. Registration is completed online via the FTA portal, requiring the trade license, MOA, and details of the authorized signatory. To open a corporate bank account, present the trade license, MOA, passport copies of shareholders and directors, a board resolution authorizing the account opening, and proof of address; banks may also request a reference letter from the free-zone authority or DED【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. For employee visas, apply for an establishment card with the Ministry of Human Resources and Emiratisation (MOHRE), then submit visa applications through the General Directorate of Residency and Foreigners Affairs (GDRFA), providing the employment contract, salary details, and medical fitness certificates【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】. Each step carries specific timelines and fees, which are published by the respective authorities.

FREQUENTLY ASKED QUESTIONS

What is the minimum share capital required for a mainland LLC in Dubai?
Federal Decree-Law No. 32 of 2021 does not prescribe a minimum share capital for LLCs; however, certain activities may impose a capital requirement set by the DED or the relevant ministry. The amount must be stated in the memorandum of association and paid up before license issuance【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】.

Can I own 100 % of a free-zone company without a UAE national partner?
Yes. Free-zone regulations allow 100 % foreign ownership for establishments and companies registered within the free-zone, as outlined in the free-zone authority's licensing rules【https://www.freezonesgateway.ae/dubai-freezones】.

How long does it take to obtain a trade license for a mainland company?
After submitting a complete application, the DED typically issues the trade license within five to ten working days, provided all documents are in order and no additional approvals are required【https://www.investindubai.gov.ae/en/business-setup】.

Are there any restrictions on the activities a free-zone company can perform outside the free-zone?
Free-zone companies may conduct business outside the free-zone only through a local distributor or agent; direct invoicing to UAE mainland clients is generally prohibited unless the activity is permitted under a dual-license arrangement【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】.

What are the annual renewal costs for a Dubai mainland trade license?
Renewal fees vary by activity and legal form; for a standard trading LLC, the annual renewal fee ranges from AED 10,000 to AED 15,000, plus any applicable municipality charges【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】.

Do I need a local service agent for a professional civil company in Dubai?
Yes. A civil company engaged in professional services must appoint a UAE national service agent who does not participate in profits or losses but facilitates liaison with government entities【https://u.ae/en/information-and-services/business/Doing-business/doing-business-】.

If your matter involves how to set up a company in in the United Arab Emirates, you are welcome to request a consultation with Nour Attorneys. Our team can assess your position under the law currently in force and outline the options available to you. Request a consultation

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