Entrepreneurs from all over the world call Dubai home. Every year, more and more foreign investors and businesspeople come to the emirate to benefit from its excellent business climate. The long-term visa, which enables foreigners to stay in the UAE for extended periods and even retire here, is one of the most recent changes that make starting a business in Dubai as a foreigner even more attractive.
In fact, over 80% of Dubai’s population consists of expatriates, and many of them own businesses in different industries like technology, retail, real estate, and tourism. According to recent reports, Dubai issued over 45,000 new business licenses in just the first half of 2023.
The reason behind this growing trend is simple, Dubai makes it easy for foreigners to start and run a business. You can enjoy 100% ownership in Mainland & Free Zones, access a tax-free environment, and expand into international markets with ease.
Even non-residents can set up their company in the UAE and manage their company from any location in the world with the right assistance. Read on to learn how to start a business in Dubai as a foreigner.
Can Foreigners Start a Business in Dubai, UAE?
Yes, foreigners can start a business in Dubai, and the process has become easier than ever. Dubai welcomes entrepreneurs from all over the world with its business-friendly policies, modern infrastructure, and strong economy. The emirate is home to many setup agents and company formation specialists who were established to assist foreign business owners with the license, visa, and business incorporation procedures.
Tax exemptions, simplicity in starting a business, speedy procedures, a booming economy & political stability are just a few benefits for foreigners starting new businesses in Dubai and other UAE emirates.
Things to Understand Before Starting a Business in Dubai as a Foreigner
Before starting a business in Dubai as a foreigner, it’s essential to understand the different company structures available for foreign investors. Your choice will impact ownership, taxation, and business operations.
1. Mainland, Free Zone, and Offshore Company Structures
A. Mainland Company (Onshore Business)
A Mainland company is registered under the Department of Economic Development (DED) and allows businesses to operate across the UAE and internationally.
Key Features:
- Can conduct business anywhere in the UAE and beyond.
- 100% foreign ownership is now permitted for most activities, but some may require a local service agent.
- No restrictions on office location, businesses can establish an office anywhere in Dubai.
- Eligible to bid for government contracts and projects.
- Subject to corporate tax (9%) if annual profits exceed AED 375,000.
The mainland is suitable for businesses that require UAE market access, such as retail stores, restaurants, consulting firms, and trading businesses.
B. Free Zone Company
Dubai has over 40+ Free Zones, each designed to support specific industries like technology, logistics, media, healthcare, and finance. Free Zones provide a business-friendly environment with tax benefits and full foreign ownership.
Key Features:
- 100% foreign ownership, no need for a local partner.
- Most Free Zones offer 0% corporate tax and no import/export duties.
- Fast and cost-effective business setup.
- No restrictions on transferring profits back to your home country.
- Free Zone companies can only trade within the Free Zone or internationally unless they appoint a local distributor for UAE mainland operations.
Dubai Free Zone company is suitable for businesses engaged in international trade, e-commerce, media, tech startups, and logistics.
C. Offshore Company
Offshore companies in Dubai are designed for businesses that operate outside the UAE but want to benefit from tax efficiency, asset protection, and business confidentiality. These companies cannot conduct business within the UAE.
Key Features:
- 100% foreign ownership with no corporate or income tax.
- No physical office requirement in Dubai.
- Ideal for holding assets, international trade, and wealth management.
- Business operations must be conducted outside the UAE.
An offshore company is suitable for Wealth management, international trade, and asset protection businesses.
Key Differences Between These Business Jurisdictions:
| Feature | Mainland Business | Free Zone Business | Offshore Business |
|---|---|---|---|
| Foreign Ownership | Up to 100% | 100% | 100% |
| Market Access | UAE & International | Limited to Free Zone & Exports | International Only |
| Corporate Tax | 9% (if profits exceed AED 375,000) | 0% in most Free Zones | 0% |
| Trade Restrictions | No restrictions | Cannot trade in UAE Mainland without a local distributor | Cannot trade within UAE |
| Office Requirement | Mandatory | Required in most cases | Not required |
2. Business Structures in Dubai
Once you select your jurisdiction, you need to choose the right legal structure for your company:
A. Limited Liability Company (LLC)
The most common structure for small and medium-sized businesses, offering flexibility and liability protection.
B. Sole Proprietorship
Owned by a single individual, ideal for freelancers and consultants. However, certain activities may require a local service agent.
C. Branch Office
A legal extension of a foreign company, allowing operations in Dubai while remaining linked to the parent company.
D. Partnership Firm
Requires two or more partners and is typically used for professional services.
How to Choose the Right Business Setup in Dubai?
Selecting the best business setup in Dubai as a foreigner depends on factors such as:
- Business Activity: Some industries, like trading and retail, may be better suited for Mainland companies, while tech startups may benefit from Free Zone incentives.
- Target Market: If you want to operate across the UAE, a Mainland license is best. For international business, Offshore or Free Zone setups may be more suitable.
- Ownership Preferences: If 100% ownership is important, Free Zone or Offshore structures are ideal.
Need help with business setup in Dubai? Shuraa Business Setup offers expert guidance and end-to-end support for company formation, licensing, visas, and banking solutions.
Types of Business Licenses to Start a Company in Dubai as Foreigner
Starting a business in Dubai as a foreign investor requires obtaining the right business license. The Department of Economic Development (DED) and Free Zone authorities issue various licenses based on the nature of the business activity. This includes:
1. Commercial License
A Commercial License is required for businesses involved in trading, buying, and selling goods. It covers a wide range of activities, including import-export, retail, wholesale, and general trading.
2. Professional License
A Professional License is ideal for businesses that provide consulting, legal, educational, IT, and other professional services. The professional license allowed low-cost setup compared to other business licenses.
3. Industrial License
An Industrial License is mandatory for businesses engaged in manufacturing, production, and industrial activities in Dubai. Businesses must have a warehouse or production facility.
4. Tourism License
Dubai is one of the world’s top tourist destinations, and businesses operating in the travel and tourism sector must obtain a Tourism License from the Department of Tourism and Commerce Marketing (DTCM).
5. E-Commerce License
An E-Commerce License is essential for businesses that sell products or services online. This license is in high demand due to the rapid growth of online shopping and digital businesses in Dubai.
6. Freelance Permit
A Freelance Permit is a special type of license that allows individual professionals to work independently in Dubai. This is perfect for content creators, designers, consultants, and IT specialists.
How to Start a Business in Dubai as a Foreigner?
Starting a business in Dubai as a foreigner is a straightforward process if you know the rules and regulations maintained by the government.
To start a company in Dubai as a foreigner, follow these steps:
1. Choose a Business Activity
Before starting a business in UAE, you need to decide on the type of business activity you want to conduct. Dubai offers various opportunities across trading, consulting, e-commerce, hospitality, real estate, and manufacturing. You need to choose from 2,000+ business activities approved by the Department of Economic Development (DED).
2. Select the Right Jurisdiction
Dubai has three main business jurisdictions:
- Mainland: Allows you to do business anywhere in the UAE and internationally.
- Free Zone: Offers tax benefits and full ownership but limits operations within the free zone.
- Offshore: Best for international business operations without a physical office in Dubai.
3. Choose a Business Structure
Select an appropriate business structure, such as:
- Sole Proprietorship
- Branch of a Foreign Company
- Free Zone Company
4. Reserve a Business Name & Get Initial Approval
Your company name must comply with Dubai’s naming regulations. The name should be:
- Unique and not similar to an existing company.
- No offensive or religious words.
- Can include your name, but it must be written in full (e.g., “John Smith Consulting” instead of “JS Consulting”).
Once you finalize the name, you must apply for initial approval from the DED or the relevant Free Zone authority.
5. Secure a Business License
To legally operate in Dubai, you must obtain a business license based on your activity.
- Commercial License: For trading businesses
- Professional License: For service-based businesses
- Industrial License: For manufacturing businesses
The Department of Economic Development (DED) issues licenses for mainland businesses, while Free Zones have their own authorities. Certain businesses require special approvals from government departments:
- Healthcare businesses: Need approval from Dubai Health Authority (DHA).
- Restaurants & Cafes: Need approval from Dubai Municipality and Food Safety Department.
- Real Estate Firms: Require approval from RERA (Real Estate Regulatory Authority).
4. Lease an Office Space
For mainland businesses, a physical office is mandatory. Free zone businesses may opt for a flexi-desk or virtual office in designated zones.
5. Open a Corporate Bank Account
To manage business transactions efficiently, open a corporate bank account in a UAE-based bank. Ensure compliance with anti-money laundering (AML) regulations. Banks will require:
- Business license copy
- Company MOA
- Shareholder passport copies
- Proof of address
6. Apply for Visa
As a business owner, you can apply for a UAE residency visa and sponsor employee visas if needed. Labour cards and Emirates ID registrations are also required.
7. Register for VAT (If Applicable)
Businesses with an annual turnover of AED 375,000 or more must register for Value Added Tax (VAT) with the Federal Tax Authority (FTA).
Business Setup Consultants can simplify the entire business setup process, from choosing the right license to company registration, visas, and banking.
How Much Does It Cost to Start a Business in Dubai as a Foreigner?
A trade license can cost between AED 12,500 and AED 25,000, approximately, for starting a business in Dubai as a foreigner or an expat, with the overall cost being dependent on various factors such as the type of business activity, jurisdiction, and other necessary documentation.
However, with proper planning, you can opt for cost-effective Free Zone packages or explore affordable Mainland setup options. Business Setup Company offers customised business setup solutions at the best prices.
What are the Benefits of Starting a Business in UAE as a Foreigner
Dubai is one of the most business-friendly destinations in the world, attracting thousands of foreign entrepreneurs each year. Here are the key benefits:
1. 100% Foreign Ownership
Foreign entrepreneurs can now own 100% of their business in Mainland Dubai, thanks to recent regulatory changes. Free Zones have always offered full foreign ownership, making them a preferred choice for international investors.
2. Tax-Free Business Environment
0% corporate tax on most businesses until 2023 (now 9% applies only to profits above AED 375,000). 0% personal income tax for individuals. No capital gains tax or withholding tax on most business activities.
3. Dubai’s Economy is Booming
Dubai’s GDP grew by 3.6% in 2023, with continued growth expected in trade, tourism, real estate, and tech sectors. The UAE also ranked No. 1 in the Arab world for ease of doing business.
4. Wide Range of Business Activities Allowed
Over 2,000+ business activities approved under Dubai’s licensing system. From small businesses to multinational corporations, Dubai supports all industries. Freelancers and remote workers can also get their licenses easily.
5. Residency and Long-Term Visas for Business Owners
Business owners and investors can apply for UAE residency visas. UAE Golden Visa (10-year residency) is also available for entrepreneurs, investors, and skilled professionals.
6. High Quality of Life & Safety
Dubai is ranked among the safest cities in the world. The city offers a high standard of living, a luxury lifestyle, and world-class healthcare.
How Shuraa Business Setup Can Help
Starting a business in Dubai as a foreigner is a smart and profitable decision. With 100% foreign ownership, tax-free benefits, a strategic location, and a booming economy, Dubai provides endless opportunities for entrepreneurs.
The business setup process in Dubai is straightforward and designed to support business growth. Dubai’s business-friendly policies, modern infrastructure, and access to a skilled workforce make it an ideal destination for startups, SMEs, and multinational companies.
However, understanding the legal requirements, licensing procedures, and business regulations can be challenging. That’s where Shuraa Business Setup comes in. We offer end-to-end support, helping foreign investors with business registration, trade licensing, visa applications, corporate banking, office space, and compliance. Our team of experts ensures a smooth and hassle-free setup process, so you can focus on growing your business.
Ready to start your journey? Contact Shuraa Business Setup today for a free consultation.
Frequently Asked Questions
1. Can a foreigner open a company in Dubai?
Yes, foreigners can open a business in Dubai with 100% ownership in Free Zones and certain Mainland business activities. Dubai welcomes international investors with business-friendly policies, a tax-free environment, and streamlined registration processes.
2. How to register a business in Dubai as a foreigner?
To register a business in Dubai as a foreigner, follow these steps:
1. Choose a business activity and legal structure (LLC, Sole Proprietorship, etc.).
2. Select a suitable business jurisdiction (Mainland, Free Zone, or Offshore).
2. Reserve a trade name and get initial approval from the Department of Economic Development (DED) or Free Zone authority.
3. Prepare the required documents and submit the business license application.
4. Get approvals, pay the fees, and receive your business license.
5. Open a corporate bank account and apply for visas if needed.
3. Do I need a local sponsor to start a business in Dubai?
No, you don’t need a local sponsor if you set up your business in a Free Zone or under most Mainland business activities that allow 100% foreign ownership. However, some Mainland businesses may require a local service agent or a UAE national partner.
4. What are the benefits of starting a business in Dubai as a foreigner?
Foreign entrepreneurs in Dubai enjoy several benefits, including:
1. 100% ownership in Free Zones & many Mainland activities.
2. Zero personal & corporate taxes in most cases.
3. Access to global markets through a strategic location.
4. Fast business registration process with minimal paperwork.
5. A strong, growing economy with numerous opportunities in different sectors.
5. Can a non-resident start a business in Dubai?
Yes, non-residents can start a business in Dubai without the need to live in the UAE. Many Free Zones and Mainland authorities offer remote business setup options. You can also appoint a business setup consultant like Shuraa Business Setup to handle the entire process on your behalf.
6. What is the most profitable business to start in Dubai for foreigners?
Some of the most profitable businesses for foreigners in Dubai include:
1. E-commerce & Dropshipping
2. Real Estate & Property Management
3. Tourism & Hospitality
4. IT & Digital Marketing Services
5. Import & Export Trade
6. Healthcare & Wellness Clinics
7. Financial & Consultancy Services
7. Which type of license would I need for my business setup in Dubai as a foreigner?
The type of license depends on your business activity:
Commercial License – For trading, retail, and general business activities.
Professional License – For consultants, freelancers, and service-based businesses.
Industrial License – For manufacturing and production activities.
Tourism License – For travel agencies, hotels, and tour operators.
*Note: The information in this post is for general guidance only and may change due to updates in government policies or regulations.
