Setting up a company in Dubai takes days and costs less than most people expect. The trap is not the setup itself, it is everything that follows. The licence is one line out of eight, and the free zone versus mainland decision drives whether you can invoice locally, lease a shop and hire staff.
We work with founders opening a retail unit, a consultancy or a sales office in the Emirates. The pattern repeats: a package sold at AED 12,000, then a real first year cost of AED 45,000 to 90,000 once visas, insurance, banking and an office are added.
This guide sets out the numbers, the decision criteria and the real calendar, from choosing the structure to opening the door of your commercial space.
Free zone or mainland: the only decision that really matters
Everything else follows from this. A free zone is a self contained economic area with its own registry and regulator: IFZA, DMCC, Meydan, DAFZA, Dubai South, Dubai Internet City. You own 100 % of the shares, setup is quick and the entry cost is low.
Mainland companies are licensed by Dubai's Department of Economy and Tourism. Since the 2021 reform, a foreign national can own 100 % of a mainland company across the vast majority of activities, with no local sponsor. In exchange, the licence requires a physical registered address with an Ejari tenancy contract.
The practical rule: if your clients are foreign companies, other free zones or individuals outside the UAE, a free zone is enough. If you sell to local customers, open a shop, a restaurant, a clinic or an agency receiving the public, go mainland.
| Criterion | Free zone | Mainland |
|---|---|---|
| Foreign ownership | 100 % | 100 % on most activities |
| Direct sales to the local market | No, distributor or branch needed | Yes, no intermediary |
| Address requirement | Flexi desk included | Office or unit with Ejari |
| Indicative licence cost | AED 12,000 to 25,000 | AED 15,000 to 30,000 |
| Setup time | 3 to 5 working days | 5 to 10 working days |
| Visa quota | Tied to the package, 1 to 6 | Tied to the size of the premises |
| Government tenders | No | Yes |
What a Dubai company really costs in year one
Headline prices from business setup platforms cover the licence only. Below is the full budget we build with our clients, excluding commercial premises, in UAE dirhams.
A lean free zone setup with a single resident shareholder lands around AED 30,000, roughly USD 8,200. A mainland setup with a 20 square metre office and two visas easily passes AED 70,000.
- Add a 5 to 10 % buffer for unplanned administrative fees in the first year.
- AED 5,000 packages exist but almost always exclude the visa, the establishment card and a usable address.
- Annual renewal usually runs at 70 to 90 % of the initial setup: budget it from day one.
| Line item | Free zone | Mainland | Note |
|---|---|---|---|
| Trade licence | AED 12,000 to 25,000 | AED 15,000 to 30,000 | Renewed yearly at a similar price |
| Registration and initial fees | AED 2,000 to 5,000 | AED 3,000 to 8,000 | Trade name, MOA, processing |
| Address or office | Included with flexi desk | AED 12,000 to 40,000 | Ejari mandatory in mainland |
| Establishment card | AED 1,500 to 2,500 | AED 1,500 to 2,500 | Required before any visa |
| Investor visa, per person | AED 3,500 to 6,000 | AED 4,000 to 7,000 | Medical and Emirates ID included |
| Mandatory health insurance | AED 1,200 to 5,000 | AED 1,200 to 5,000 | Per person, per year |
| Corporate bank account | AED 0 to 3,000 | AED 0 to 3,000 | Minimum balance usually required |
| Accounting and VAT | AED 4,000 to 12,000 | AED 6,000 to 18,000 | Mandatory since corporate tax |
How to set up a business in Dubai: the 8 steps
The path is standardised. What changes between files is preparation and speed. A complete file clears in a week, a vague one drags for a month.
- 1. Define the exact activity and match it to an official activity code. A wrong code blocks the visa or the bank account.
- 2. Choose the jurisdiction: the free zone that fits your sector, or mainland if you target the local market.
- 3. Reserve the trade name and obtain initial approval.
- 4. Sign the memorandum of association and, in mainland, the Ejari lease for your office or unit.
- 5. Receive the trade licence, typically within 3 to 10 working days.
- 6. Obtain the establishment card, which unlocks visa quotas.
- 7. Process the investor visa: entry permit, medical test, biometrics, Emirates ID.
- 8. Open the corporate bank account, then register for VAT and corporate tax.
The bank account, where most files stall
UAE banks apply strict compliance. A file with a vague activity, no proof of operations and no coherent history is declined without explanation. Allow 2 to 6 weeks, sometimes longer for a structure with no UAE resident.
What gets a file approved: a clear activity consistent with your track record, a simple but quantified business plan, client contracts or quotes, a verifiable address and a resident shareholder. Expect a minimum balance of AED 25,000 to 100,000 depending on the bank.
- Prepare six months of personal bank statements in English.
- A holding company with no operating activity is the most frequently rejected profile.
- Licensed business fintechs let you start trading but do not replace a local bank for dirham collections.
2026 taxation: what you actually pay
The zero tax image of Dubai is out of date. Since June 2023 a federal corporate tax applies at 9 % above AED 375,000 of annual profit. Below that threshold the rate is 0 %, which covers a large share of small structures.
Qualifying free zone companies can keep a 0 % rate on qualifying income, subject to real economic substance. That status is easy to lose: it assumes premises, staff and genuine activity inside the zone.
There is still no personal income tax in the UAE and no social contributions on expatriate salaries. VAT stays at 5 %, with mandatory registration from AED 375,000 of taxable turnover.
| Tax | Rate | Threshold |
|---|---|---|
| Corporate tax | 0 % | Profit up to AED 375,000 |
| Corporate tax | 9 % | Above AED 375,000 |
| VAT | 5 % | Registration from AED 375,000 taxable turnover |
| Personal income tax | 0 % | None |
| Withholding tax | 0 % | On outbound dividends |
Commercial space, the line nobody budgets in advance
For a shop, a restaurant or any customer facing service, the unit weighs far more than the legal structure. In Dubai rent is agreed annually, often paid in one to four cheques, and comes with costs that rarely appear in the headline figure: security deposit, 5 % agency fee, Ejari, mall fit out approvals and tenant works.
Rent levels vary by a factor of five between a secondary area and a premium mall. The ratio to watch stays the same: rent including service charges should not exceed 12 to 18 % of target turnover for a retail business.
- Negotiate a rent free fit out period: one to three months is standard practice.
- Check the visa quota attached to the floor area before signing if you plan to hire.
- In malls, marketing and service charges can add 10 to 20 % on top of headline rent.
| Location type | Indicative annual rent per sqft | Suited to |
|---|---|---|
| Premium mall, Dubai Mall or Mall of the Emirates | AED 700 to 2,500 | Established brand, high margin |
| Community mall | AED 250 to 600 | F&B, services, everyday retail |
| Street retail Downtown, Marina, JBR | AED 200 to 500 | Cafe, concept store, clinic |
| Secondary area, Al Quoz, back of Business Bay | AED 80 to 200 | Workshop, showroom, back office |
| Free zone office | AED 70 to 180 | Consulting, tech, international trade |
The five most expensive mistakes
We see the same files come back six months later, licence to redo and budget doubled. Here is what causes it.
- Choosing a free zone, then discovering you cannot invoice a local client without a distributor.
- Taking the cheapest licence with a badly coded activity, then being refused a visa or a bank account.
- Leaving annual renewal, health insurance and accounting out of the cash flow plan.
- Signing a commercial lease before confirming the activity is permitted at that location.
- Underestimating banking timelines and committing commercially before the account is live.
How WAH! Business works with you
We do not sell licences. We start from your business model, confirm the structure that actually matches your customers, then coordinate incorporation, visas, banking and the search for premises, with a budget agreed before we start.
Our real value sits on location: which mall, which district, what rent your model can carry and what terms to negotiate. It is the same analytical discipline we apply to our property assets, applied to your market entry.
Sources
The figures in this guide are cross checked against the publications below. Check for updates before any decision.
- Corporate tax rates and thresholds · Federal Tax Authority, United Arab Emirates · accessed 31 August 2026
- Trade licences and business activities in Dubai · Dubai Department of Economy and Tourism · accessed 31 August 2026
- 100 % foreign ownership in mainland companies · Official UAE Government Portal · accessed 31 August 2026
Frequently asked questions
How much does business setup in Dubai cost in 2026?
The licence alone starts around AED 12,000 in a free zone and AED 15,000 in mainland. A realistic first year budget, including investor visa, establishment card, health insurance, bank account and accounting, runs AED 25,000 to 40,000 in a free zone and AED 45,000 to 90,000 in mainland with an office.
Do I need a local partner to set up a company in Dubai?
No. Since the 2021 reform a foreign national can own 100 % of a mainland company across the vast majority of activities, and this has always been the case in free zones. Only a few strategic activities still require local participation.
Free zone or mainland: which should I choose?
Free zone if your clients sit outside the UAE, in international B2B or in other free zones, with limited office needs. Mainland if you sell to local customers, open a retail unit or bid for government contracts. Free zone costs less, mainland opens the domestic market.
How long does it take to open a company in Dubai?
The licence is issued in 3 to 5 working days in a free zone and 5 to 10 days in mainland when the file is complete. Add 2 to 4 weeks for the visa and Emirates ID, then 2 to 6 weeks for the bank account. Six to ten weeks to be fully operational is realistic.
Does a Dubai company give me a residence visa?
Yes. The licence supports a two year investor visa, renewable, including medical test and Emirates ID. The number of visas depends on the free zone package or, in mainland, on the size of your premises. The visa then allows you to sponsor your spouse and children.
Do companies pay tax in Dubai?
Corporate tax is 0 % up to AED 375,000 of annual profit and 9 % above. VAT at 5 % becomes mandatory from AED 375,000 of taxable turnover. There is no personal income tax and no withholding tax on dividends.
Can I set up a Dubai company without living there?
Yes, most free zones allow remote incorporation with an electronic signature and a passport. The visa and above all the bank account almost always require a trip, with an in branch interview.
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