Starting a Business in the UAE: What You Need to Know

The UAE has emerged as one of the world’s most attractive destinations for entrepreneurs, startups, and global enterprises. Its pro-business policies, tax-friendly environment, advanced infrastructure, and strategic location bridging East and West make it an ideal base for regional and international operations.

Whether you are a first-time entrepreneur or an established company seeking regional expansion, here’s what you need to know about starting a business in the UAE.

1. Choose the Right Jurisdiction

The UAE offers three primary jurisdictions for business setup, each with distinct benefits:

• Mainland (Onshore):
  Licensed by the Department of Economic Development (DED), allows you to trade directly within the UAE market and work with government entities

• Free Zones:
  Offer 100% foreign ownership, sector-specific environments, and streamlined setup processes. Ideal for businesses focused on international trade, services, or tech

• Offshore:
  Suitable for holding companies or international structuring with no physical office in the UAE. Not permitted to conduct onshore business

2. Select Your Business Activity

Every company must declare its business activity, which determines:

• The required license type (commercial, professional, industrial)

• Regulatory approvals needed

• The appropriate free zone or mainland licensing authority

There are thousands of approved activities and selecting the correct one is critical for compliance and operational scope.

3. Decide on the Legal Structure

Common legal structures in the UAE include:

• Limited Liability Company (LLC)

• Sole Establishment

• Branch of a Foreign Company

• Free Zone Establishment (FZE) or Free Zone Company (FZCO)

• Civil Company (for professional services)

Each structure has implications for ownership, liability and licensing

4. Reserve a Trade Name and Apply for Initial Approval

• Your company name must be unique, relevant and compliant with naming guidelines

• Once approved, you will receive an Initial Approval Certificate to proceed with incorporation

5. Finalise Licensing & Office Space

• Leasing a physical office is mandatory for most setups (unless you're in a virtual office-friendly free zone)

• Once your office is secured, you can apply for the final license, submit required documents and complete payment

6. Register for Visas and Immigration Services

Post-licensing, you will be able to:

• Obtain your Establishment Immigration Card

• Sponsor residence visas for owners, employees and dependents

• Apply for Emirates IDs and complete health checks

7. Open a Corporate Bank Account

UAE bank account opening requires:

• A valid trade license

• Proof of address and business activity

• Passport copies and corporate documents

• A clear business model (especially for foreign shareholders)

Banks conduct KYC checks and may request interviews or additional documents

8. Ensure Compliance with Legal Requirements

Depending on your activity and structure, you may need to:

• Register for VAT & Corporate Tax

• File UBO (Ultimate Beneficial Owner) disclosures

• Comply with Economic Substance Regulations (ESR)

• Maintain proper accounting records

Why Set Up in the UAE?

• 0% personal income tax

• 100% foreign ownership in free zones and now increasingly available onshore

• Strategic global connectivity and investor-friendly climate

• Access to a skilled, multicultural workforce

Conclusion

Starting a business in the UAE is a promising step for entrepreneurs and enterprises seeking growth, innovation and strategic positioning. With the right guidance, the setup process can be smooth, fast and highly rewarding.

At MENA Consultancy, we provide end-to-end business setup services – from structuring and licensing to visa processing and bank account support. Contact us today to take the first step in building your business in the UAE.