How to Start a Business in Dubai (2025) – License & Costs

Looking to start a business in Dubai and get insider guidance without wasting a minute? Dubai is a global business hub with tax advantages, world-class infrastructure, and 100% ownership options in select zones. But navigating the setup process can be overwhelming if you’re not familiar with local requirements and nuances.

Business License Types in Dubai

Business setup consultants in Dubai often advise that your license isn’t just paperwork, it’s the legal permission that defines what you can do, where you can operate, and which regulations you must follow. Choosing the right license type is one of the first major decisions in the setup process.

1. Commercial License

Covers trading activities, whether you’re importing goods, exporting products, or selling within the UAE.
Examples of activities: General trading, retail shops, wholesale distribution, real estate brokerage.
Best for: Entrepreneurs looking to run trading businesses, retail stores, or import/export operations.

2. Professional License

Issued for service-oriented businesses and skilled professionals.
Examples of activities: Consultancy, legal services, auditing, IT solutions, design services.
Best for: Individuals or companies offering specialist services where expertise is the main value.

3. Industrial License

Required for manufacturing or industrial activities.
Examples of activities: Food production, textile manufacturing, metal fabrication, packaging.
Best for: Companies that need warehouse space, machinery, and permits for production.

4. Tourism License

For businesses in Dubai’s tourism and hospitality sector.
Examples of activities: Travel agencies, tour operators, hotel and cruise services, event management.
Best for: Entrepreneurs targeting Dubai’s thriving tourist market.

5. Freelance Permit

Allows individuals to operate as a self-employed professional under their own name.
Examples of activities: Content creation, photography, software development, translation.
Best for: Solo professionals who don’t need a full corporate setup but want legal recognition in the UAE.

Pro Tip: Some free zones offer activity-specific licenses that combine multiple categories. For example, a free zone license might allow both service and trading activities under one registration ideal for hybrid business models.

How to Start a Business in Dubai (Step by Step) 

Starting a business in Dubai is an exciting opportunity. With its tax-friendly policies, 100% foreign ownership in many sectors, and strategic location bridging East and West, Dubai attracts entrepreneurs from all over the world. But with so many options for company structures and licensing, the process can feel overwhelming if you don’t know where to begin.

1. Choose your jurisdiction (Mainland, Free Zone, or Offshore)
2. Select your business activity (Commercial, industrial, professional, or tourism)
3. Pick a legal structure (LLC, Sole Proprietorship, Free Zone Entity, Branch Office)
4. Reserve a trade name.
5. Get initial approval for your activity and structure.
6. Secure office space from virtual desk to a full office, depends on license type.
7. Apply for your license (trade, industrial, or professional).
8. Open a corporate bank account
9. Register for visas & corporate tax (if applicable).
10. Renew license annually

Key Benefits of Setting Up a Business in Dubai in 2025

Dubai’s rise from desert trading post to one of the world’s busiest business hubs is no accident. By 2025 the emirate is in the middle of its Dubai Economic Agenda (D33) – a ten‑year plan to double the size of its economy and cement its place among the world’s top three economic cities.

A recent presentation to the Dubai Chamber’s Business Councils highlighted that the D33’s goal is to strengthen a pro‑growth environment and increase private‑sector contributions to national output. This vision, combined with generous tax rules and modern infrastructure, explains why entrepreneurs from around the globe are considering Dubai for their next venture. Below are the key reasons why 2025 is an ideal year to set up a company in the emirate.

1. Favourable tax environment

The UAE government introduced a federal corporate tax in mid‑2023, but the regime remains one of the most competitive in the world. As of June 2024 the official guidelines set the corporate tax rate at 0 % on taxable income up to AED 375 000 and 9 % on profits above that amount. There is no personal income tax, and capital gains and dividends earned by individuals remain untaxed.

Certain free‑zone companies also enjoy full exemptions provided they meet regulatory conditions. This low‑tax environment allows startups and small‑to‑medium‑sized enterprises (SMEs) to keep more of their earnings, reinvest in growth and remain competitive globally. For large multinational groups, a 15 % top‑up tax applies to align with the OECD’s Pillar‑Two rules, yet this still compares favourably with corporate taxes in most other countries.

In addition to corporate tax, Dubai levies a value‑added tax (VAT) of just 5 % on most goods and services. There is no wealth tax or inheritance tax, and the emirate refrains from taxing income from personal savings or investment returns. These features make Dubai especially attractive for high‑growth ventures, family offices and expatriate entrepreneurs.

2. Full foreign ownership and profit repatriation

Historically foreign investors needed a local partner to own a majority of a mainland company. In recent years those rules have loosened dramatically. The Dubai government confirmed that since 2020 many sectors allow 100 % foreign ownership on the mainland.

Free zones special economic districts designed to attract international investment have always allowed full ownership. Crucially, companies registered in free zones may repatriate all capital and profits without restriction, giving investors confidence that they can move funds back to their home countries whenever needed.

3. Free‑zone advantages and streamlined setup

Dubai hosts more than 30 free zones, each catering to specific industries such as technology, media, logistics and healthcare. These zones act like “mini jurisdictions”: they issue their own licences, set their own rules and offer incentives such as tax exemptions, customs duty relief and simplified import/export procedures

 Some zones even guarantee a tax‑free period of up to 50 years. Because the free‑zone authority handles most regulatory tasks, the licensing process is usually faster than for mainland companies.

Free zones also offer tailored infrastructure tech incubators in Dubai Internet City, logistics hubs in Jebel Ali Free Zone, and financial courts and regulations in Dubai International Financial Centre (DIFC) allowing businesses to choose the environment that suits their activity. The only significant limitation is that free‑zone entities generally cannot trade directly in the UAE mainland without appointing a local agent.

4. Strategic location and world‑class infrastructure

Dubai sits between Europe, Asia and Africa, making it an ideal bridge for goods and services. Its ports and airports consistently rank among the world’s busiest cargo and passenger hubs. But infrastructure extends beyond transport: the city invests heavily in fibre‑optic networks, smart‑city initiatives and sustainable energy.

A recent survey of business benefits highlighted Dubai’s world‑class infrastructure, stable political climate and business‑friendly government policies. Companies can tap into cutting‑edge logistics, warehousing and digital infrastructure from day one, reducing operational bottlenecks and facilitating global outreach.

5. Skilled and diverse workforce

One of Dubai’s strengths is its cosmopolitan population. The city attracts talent from across the Middle East, Asia, Europe and the Americas, creating a multilingual workforce fluent in global business practices. Educational institutions partner with private companies to produce graduates ready for sectors like artificial intelligence, fintech and renewable energy.

The same survey of business benefits emphasised access to a skilled and diverse workforce. This diversity helps companies understand cultural nuances across markets and innovate by combining perspectives.

6. Business‑friendly regulations and fast setup

Dubai consistently ranks highly in ease‑of‑doing‑business indexes because it has streamlined company formation. Digital platforms allow entrepreneurs to reserve trade names, submit documents and pay licence fees online. Government departments offer single‑window services so that investors rarely need to visit multiple offices.

According to one 2025 guide on low‑cost setups, entrepreneurs can complete registration and licensing in a matter of days. Free‑zone authorities often assign account managers to walk applicants through each step, reducing paperwork and making compliance straightforward. The same guide highlights that Dubai’s regulatory reforms have created a business‑friendly environment, enabling startups to focus on operations rather than bureaucracy.

7. Sector diversity and growth opportunities

Dubai’s economy is no longer reliant on oil; its growth comes from trade, tourism, finance, real estate, healthcare, technology and manufacturing. Free‑zone clusters align with these sectors, and the D33 agenda aims to double foreign trade and add hundreds of new cities to Dubai’s trading network.

For low‑cost startups, top industries include e‑commerce, tech services, tourism and hospitality, financial services and real estate. Companies can leverage Dubai’s central location to reach customers in Asia, Africa and Europe within hours and benefit from government initiatives promoting innovation and sustainability.

8. Role of professional consultants

Navigating regulations, choosing the right free zone and ensuring compliance with tax and licensing rules can still be complex for newcomers. Professional business setup service provider in Dubai understand the local landscape and can help entrepreneurs select the most suitable legal structure, obtain visas and open bank accounts without unnecessary delays. They also stay up to date with regulatory changes, such as new tax rules or updates to the Economic Substance Regulations, ensuring that businesses remain compliant while focusing on growth.

Common Business Setup Costs to Consider Before Starting a Business in Dubai

• Trade Name Reservation: AED 600 – 1,000
• Initial Approval: AED 120 – 500
• License Fees: AED 10,000 – 20,000 (varies by activity and jurisdiction)
• Office Space: AED 5,000 – 50,000 annually depending on location and size
• Visa Costs: AED 3,000 – 7,000 per visa
• Miscellaneous: Approvals from external authorities, notarization, document translation

FAQs on Starting a Business in Dubai

1. How long does it take to set up a company in Dubai?

For most free zone companies, setup can be completed in 3–7 working days once all documents are ready. Mainland setups may take 1–3 weeks depending on activity type and approvals required.

2. Can I operate multiple business activities under one license?

Yes, but only if the activities are related and allowed under the same license category. Some free zones and the mainland allow combining activities; otherwise, you may need multiple licenses.

3. Do I need a local address to open a business bank account?

 Yes. All UAE banks require proof of a physical address in the country usually your office lease (Ejari for mainland or free zone lease agreement).

4. Is it possible to transfer my company from one free zone to another?

Yes, but it’s treated as a closure in the original free zone and a new setup in the new one. You’ll need to settle outstanding dues and reapply with the new authority.

Final thoughts

Dubai’s business environment in 2025 offers unmatched opportunities, from its pro-investment policies to its central role in global trade. Whether you choose the mainland for full UAE market access, a free zone for tax-friendly operations, or an offshore entity for international structuring, the key is to match your setup to your long-term goals.