The UAE is a strategic location connecting the eastern and western markets. The lucrative tax, visas, and business opportunity attracts hundreds of businesses to expand their operations or start a new business in the UAE, especially Dubai. However, whenever you enter a new market, you have many questions that might be overwhelming you. Therefore, we have created this post to answer all the UAE business setup FAQs for businesses.
If you need a UAE company formation guide, we are here to help you! Contact us now.
UAE business setup FAQs
What is the procedure to start a business in the UAE?
The procedure to start a business in the UAE may vary based on whether you are choosing a mainland or a free zone. Some rules and processes may also vary based on the emirate you are operating in. However, the following is an ideal process for UAE business setup:
- Choose a business activity to get the relevant licence.
- Select an appropriate legal structure, including Sole Establishment, Limited Liability Company (LLC), Branch of a Foreign Company, and more.
- Register your official trade name to avoid duplication and legal compliance.
- Apply for initial approval to get a business licence.
- Secure a rented office space or buy an office space (mandatory in the Mainland)
- Submit the necessary application fees to receive the licence to start your business
Can you own 100% of a company in the UAE as a foreigner?
Absolutely. Since the UAE Federal Law No. 26 of 2020 has been removed the foreigners can own 100% of their companies in the majority of sectors in the Mainland. Free Zone has always owned 100% rights to their businesses. However, it is important to note that some critical sectors, such as oil and gas, military services, and certain utilities, still require partnership with UAE citizens.
How many days does it take to set up a business in Dubai?
The exact timeline for business setup varies based on whether you choose a free zone or the Mainland, the documents, and activity-specific approvals. For a Free Zone company setup in Dubai, it might take 3 to 7 days. However, it might take 1 to 4 weeks for a company to set up in the Mainland because you need to find an office space and get a rental registration (Ejari).
Can I start a business in Dubai without an office?
In Dubai Free Zones, you can start your business without a physical office. You can start with a flexi desk (virtual) or co-working spaces. However, if you want to open a Mainland company, a physical office is mandatory. In some areas, choosing a co-working space is also valid for service-based business operations.
What is the business structure in the UAE?
The following are a few business structures in the UAE for business registration:
- Sole Establishment
- Limited Liability Company (LLC)
- Branch of a Foreign Company
- Public joint stock company (PJSC)
- Private shareholding company
- Civil company
- Free zone limited liability company (FZ-LLC)
- Free zone establishment (FZE)
- Ras Al Khaimah International Corporate Centre (RAK ICC) for offshore companies
Can I set up a business in the UAE without being a resident?
Yes, you can start a business in the UAE without residing here after completing the registration process with the right documents. However, free zones and mainland authorities both offer investor and employee visas as part of a business license in the UAE.
UAE free zone company FAQs
What is a Free Zone company in the UAE?
A Free Zone company is a business entity established within one of the UAE’s specially designated economic zones (free zones). They are regulated by their own authority and typically focused on a specific industry such as technology, media, healthcare, logistics, finance, or e-commerce. The free zone offers 100 foreign ownership, 0% corporate tax for eligible income, no import-export tax, flexi desk options, and access to world-class infrastructure.
Which is the cheapest free zone in the UAE?
The following are a few affordable free zones in the UAE:
- International Free Zone Authority IFZA
- Ras Al Khaimah Economic Zone (RAKEZ)
- Dubai South Free Zone
- Sharjah Media City
- Meydan Free Zone
- Ajman Free Zone
- Fujairah Creative City
Can a Free Zone company do business in the UAE?
Yes. Free zone companies can do business in the UAE Mainland if they acquire the necessary permits and business licence in the UAE. They can either start a franchise, operate a branch, or hire local distributors in the Mainland to do business.
How to establish a company in the Dubai free zone?
This is one of the most common free zone company FAQs. So, here’s a guide on how to establish a free zone company in Dubai:
- Choose a free zone that fits your business and budget
- Choose a business activity to get the necessary licence
- Choose the right legal structure for your business
- Register your trade name with the free zone authority
- Submit the initial application with the necessary documents
- Register an office space that fits your needs
- Pay the necessary fees to receive a business licence
UAE mainland company FAQs
What is a Mainland company in the UAE?
A mainland company (also called an onshore company) is a business registered with the Department of Economic Development (DED) or the relevant licensing authority of a UAE emirate. They can operate anywhere in the UAE and build international connections. Furthermore, they have the leverage to apply for government tenders.
What’s the difference between Mainland and Free Zone in business setup?
The following table helps you understand the difference between the UAE business setup in a free zone and the mainland:
| Mainland | Free Zone | |
| Foreign Ownership | 100% for most activities | 100% |
| UAE market access | Can operate anywhere in UAE | Anywhere internationally but limited access to UAE with permits |
| Office requirement | Mandatory | Flexible |
| Visa quota | Based on office space | Based on free zone package and business activities |
| Regulatory body | DED or relevant emirate authority | Free zone authority |
| Tax | As per federal law | 0% corporate tax up to certain income limit |
How long does it take to set up a Mainland business?
Setting up a mainland business typically takes between 1 and 4 weeks, if you have all the necessary certificates and can find an office space immediately. 360 Days PRO Services can be your UAE company formation guide to help you establish your business with legal compliance.
Is a physical office mandatory for Mainland companies?
Yes. A physical office address is mandatory for mainland company registration in the UAE. The DED requires proof of tenancy (Ejari registration in Dubai) as part of the licence issuance process. However, co-working spaces and business centres are widely accepted by authorities, particularly for service-based businesses and consultancies.
UAE business setup cost FAQs
What is the cost of starting a company in the UAE?
The cost of setting up a business in the UAE depends on several factors, including jurisdiction (free zone vs mainland), emirate, business activity, number of visas, and office type. However, the cost of starting a Free Zone company is often lower than in the Mainland due to the mandatory physical office registration.
How much does it cost to open a free zone company in Dubai?
The precise cost of starting a free zone company in Dubai depends on your choice of free zone, business activities, office registration, and more. The price can range between AED 12,500 and AED 50,000 or more.
How much tax do businesses pay in the UAE?
You may have to pay some taxes, such as personal income tax (mostly 0%), corporate tax (9% on income over AED 375,000), Free Zone Tax (0% for qualifying companies), VAT (5% for business turnover over AED 375,000), and customs duties.
What is the 3000 dirham rule in Dubai?
The “AED 3,000 rule” says that workers in the UAE with certain types of visas must make at least AED 3,000 a month. As part of the UAE’s rules for domestic workers and jobs, some types of employee visas require employers to show that their workers make at least a minimum wage. It’s important to remember that the minimum salary requirements can be different depending on the type of visa, the person’s nationality, and the type of job.
UAE business licence and visa FAQs
What are the benefits of a business license in the UAE?
The following are a few benefits of getting a UAE business licence:
- Legal compliance for the business
- Get a residential visa for yourself and your family
- Open a personal bank account
- Start a business in the UAE
- Build credibility in the market
- Start a free zone company
- Hire international and local staff members
How many visas can a company sponsor in Dubai?
In Mainland companies, the number of visas sponsored by a company depends on the office size: 1 visa per 9 square metres. However, in the free zone, the visa quota depends on which package you have chosen. It is 0 to 3 for virtual or flexi desks, and more for physical offices. Contact us now to get an estimate of the visa quota for your company.
How many visas can I get with a free zone license?
The number of visas your free zone licence can get you depends on your chosen business package. The following are a few estimates of the visa quota for a free zone company:
- Virtual or flexi desk: 0 to 3 visas
- Executive office: 3 to 6 visas
- Large office or warehouse: 6 or more visas
365 Days PRO Services will help you find the free zone that best matches your requirements and budget. We can also help you with Mainland company registration and more. If you have any other queries, please get in touch with us now!