How to Open a Business in Dubai as a Foreigner: A Step-by-Step Guide

With an expat population of around 85%, Dubai is one of the most globally connected cities in the world. For businesses, the pull is simple: corporate taxes are low, personal income tax is zero, and regulators actively encourage foreign investment and entrepreneurship. If you have a viable business idea but you’re not from the UAE, Dubai might be one of the easiest places to bring that vision to life. In 2024 alone, the Dubai Chamber of Commerce welcomed 70,500 new businesses – the majority of which were founded by non-Emiratis. What follows is a clear, step-by-step guide to starting a business in Dubai, designed with foreign entrepreneurs in mind.

Step 1: Choose Your Business Activity and Legal Structure

Before you begin the paperwork for a business license, you first need to define exactly what your business does and match it to a recognised activity. Don’t worry if your idea is niche – there are more than 2,100 officially listed activities to choose from.

In general, activities fall under one of three license types:

Once that’s pinned down, you’ll need to choose a legal structure. The most common option for foreign entrepreneurs is an LLC (Limited Liability Company) – a flexible, widely accepted format that now allows 100% foreign ownership in most sectors. You can set it up solo or with partners, and it protects your personal assets from company liabilities.

If you’re freelancing or offering a specialised service alone (think: photography, personal training, design), you might instead go for a sole establishment, which is quicker to form but doesn’t create a legal separation between you and the business in the way an LLC does. Your legal structure will determine how you’re taxed, how you can scale, and what your setup process looks like. 

Once both your activity and structure are defined, you’ll be ready to select a jurisdiction and begin the licensing process.

Step 2: Choose Your Jurisdiction – Mainland or Free Zone

This is one of the most important decisions you’ll make early on. In Dubai, you can register your business either on the mainland or in a free zone, and the right option will depend on how and where you plan to operate.

For expats, free zone registration is usually the easiest route. Dubai has around 30 free zones, including Jafza, DIFC and DMCC, all offering 100% foreign ownership, low setup costs, and streamlined licensing. Most also come with shared services and flexi-desk options, making them especially appealing to startups and freelancers.

If your business is more rooted in the UAE, a mainland setup might be more suitable. Mainland companies are licensed by Dubai’s Department of Economy and Tourism (DET), and they allow you to trade anywhere in the UAE, serve government clients, and open retail or office locations across the city. Until 2021, mainland companies were required to have a 51% local shareholder, but that rule has now been lifted, allowing 100% foreign ownership in most sectors.

Step 3: Pick a Company Name and Get It Approved

Appropriately naming your company is a matter of compliance, not just brand identity. When setting up a company in Dubai, authorities need to approve the name before you can use it on your license, so the rules are strict. You can’t choose anything offensive, religiously sensitive, or misleading. If you want to use a person’s name, it must be their full name, and that person must be a shareholder or partner in the business. Words like “Dubai” or “Emirates” are also off-limits unless you’re directly affiliated with the government or have special approval.

Once you’ve settled on a name (and a few backups), you must submit it for approval – either to the DET for mainland businesses, or to your chosen free zone authority. There’s a small reservation fee, usually around AED 620, and once approved, the name will be reserved for you to use on all official documents, including your trade license.

Step 4: Apply for Initial Approval

Before you can formally set up your company, you need what’s called “Initial Approval”, which is essentially a green light from the government. To get this, you must submit basic documents, such as passport copies of owners, your chosen trade name, and details of your business activity. If you’re in a regulated industry (like healthcare or education), you might also need permission from the relevant ministry at this stage.

This step is usually quick and straightforward. Once approved, you’ll receive an Initial Approval Certificate that lets you move forward with your licensing.

Step 5: Prepare MOA (or LSA)

The next step is to prepare the legal documents that formally establish your company. Chief among these is the Memorandum of Association (MOA), which outlines ownership shares, defines your business activity, and sets out how the company will be managed. If you’re setting up a sole establishment, you’ll need a Local Service Agent (LSA) Agreement instead. In this case, an Emirati national acts as your official government liaison but holds no ownership in the business.

Step 6: Secure an Office Space

Every company in Dubai needs a physical address to get licensed. In free zones, you can opt for a shared workspace or flexi-desk, which are sometimes offered as part of the incorporation package. For mainland companies, you’ll need to rent an office of at least 200 square feet and register your tenancy contract with the government through the Ejari system. 

Step 7: Apply for Your Trade License

Once your paperwork is ready and your lease is secured, you can submit the full application for the trade license. To do this, you will need: