How to Start a Company in UAE: Complete Process, Cost & Requirements

Leave a Comment / UAE Corporate Tax / By Almalia Consulting

How to Start a Company in UAE: Complete Process, Cost & Requirements

Starting a business in the United Arab Emirates is more than a commercial decision—it is a strategic move into one of the world’s most resilient and business-friendly economies. Backed by long-term economic stability, world-class infrastructure, global connectivity, and a forward-looking regulatory framework, the UAE has become a preferred destination for entrepreneurs, startups, and multinational corporations alike. For investors exploring how to start a company in UAE, understanding the legal structure, regulatory process, and cost implications is essential to building a compliant and sustainable business.

The UAE offers a unique blend of opportunity and security. With investor-friendly government policies, streamlined company formation procedures, and access to high-growth markets across the Middle East, Africa, Europe, and Asia, businesses established in the UAE gain a powerful competitive advantage. The country’s commitment to innovation, digital transformation, and economic diversification has further strengthened its appeal as a global business hub.

Why Start a Company in UAE?

The UAE offers a highly supportive ecosystem for businesses across industries. Entrepreneurs benefit from strong infrastructure, transparent regulations, and long-term growth opportunities.

Key advantages include:

100% foreign ownership in most business activities
No personal income tax
Strategic location connecting Asia, Europe, and Africa
Multiple jurisdiction options for different business models
Stable political and economic environment

Understanding how to start a company in UAE begins with choosing the right setup path aligned with your business goals.

Step 1: Choose the Right Business Jurisdiction

The UAE offers three primary jurisdictions. Your choice impacts licensing, costs, office requirements, and market access.

Mainland Company

A mainland company allows you to operate anywhere in the UAE and work directly with the local market and government entities.

Best suited for: Businesses targeting UAE customers, retail operations, contracting, and government projects.

Free Zone Company

Free zones are designated economic areas offering simplified incorporation, full foreign ownership, and industry-focused licenses.

Best suited for :Consulting, trading, e-commerce, technology, startups, and international businesses.

Offshore Company

Offshore companies are used mainly for international operations, asset holding, or global structuring. They cannot conduct business within the UAE market.

Best suited for: Holding companies and international trading structures.

Step 2: Select the Appropriate Business Activity

Every company license in the UAE is issued based on approved business activities. Selecting the correct activity is critical, as it determines licensing type, regulatory approvals, visa eligibility, and banking feasibility.

Common activity categories include:

Trading and general trading
Professional and consultancy services
Industrial and manufacturing activities
E-commerce and digital services
Media, marketing, and technology services

Incorrect activity selection can delay approvals or create compliance issues later.

Step 3: Decide the Legal Structure

Your legal structure defines ownership, liability, and operational flexibility. The most common options include:

Limited Liability Company (LLC)
Sole Establishment
Civil Company
Branch of a Foreign Company
Free Zone Establishment or Free Zone Company

Choosing the right structure is essential for long-term scalability and compliance.

Step 4: Apply for the Business License

To legally operate, you must obtain a UAE business license. The license type depends on your selected activity:

Commercial License – for trading and commercial activities
Professional License – for services, consultancy, and professional work
Industrial License – for manufacturing and industrial operations

Each license comes with specific documentation and approval requirements.

Step 5: Trade Name Reservation and Initial Approval

Your trade name must comply with UAE naming regulations. It should:

Reflect the nature of your business
Avoid restricted or offensive terms
Follow legal naming conventions

Once approved, initial approval is issued, allowing you to proceed with registration and documentation.

Step 6: Office Space and Address Registration

Depending on your jurisdiction, you may require:

Physical office space
Shared or flexi-desk office
Warehouse or industrial premises

Mainland companies typically require tenancy registration, while many free zones offer bundled office solutions as part of the license package.

Step 7: Final Submission and License Issuance

After submitting all documents, paying government fees, and completing approvals:

Your trade license is issued
Your company is officially registered
You are legally authorized to start operations

This completes the core formation process when learning how to start a company in UAE.

Cost to Start a Company in UAE

Company formation costs vary based on jurisdiction, license type, number of visas, and office requirements.

Estimated cost ranges:

Free Zone: AED 12,000 to AED 25,000+
Mainland: AED 18,000 to AED 35,000+
Offshore: AED 10,000 to AED 18,000+

Costs typically include license fees, registration charges, office space, visas, and government approvals.

Legal and Compliance Requirements

Starting a company in the UAE also involves ongoing regulatory obligations, such as:

Corporate tax registration
VAT registration (if applicable)
Accounting and bookkeeping
Annual license renewal
Economic substance compliance
Anti-money laundering obligations

Non-compliance can result in penalties, fines, or license suspension.

Corporate Bank Account and Visas

After company formation:

Open a UAE corporate bank account
Apply for investor and employee visas
Complete immigration and labor registrations

Bank account approval timelines vary depending on the business activity and documentation quality.

Common Mistakes to Avoid

When understanding how to start a company in UAE, avoid these common errors:

Choosing the wrong jurisdiction
Selecting incorrect business activities
Ignoring tax and compliance obligations
Underestimating setup and renewal costs
Failing to plan for future expansion

A structured, compliant approach saves time, cost, and operational risk.

Conclusion

Knowing how to start a company in UAE is not just about registration—it is about building a legally compliant, scalable, and sustainable business. With the right jurisdiction, proper documentation, and long-term planning, the UAE offers an exceptional platform for growth and global expansion.

Frequently Asked Questions (FAQs)

1. How long does it take to start a company in UAE?

The timeline to start a company in UAE typically ranges from 3 to 10 working days, depending on the chosen jurisdiction, business activity, and document readiness. Free zone companies are usually faster, while mainland setups may take slightly longer due to additional approvals.

2. Can a foreigner start a company in UAE?

Yes, foreigners can fully own a company in the UAE. Most business activities now allow 100% foreign ownership across mainland and free zone jurisdictions, without the need for a local partner.

3. What are the minimum requirements to start a company in UAE?

To start a company in UAE, you generally need:

Passport copy of shareholders
Visa or entry stamp (if applicable)
Business activity selection
Trade name approval
Office address
Initial government approvals

Additional documents may be required based on the business type.

4. How much capital is required to start a company in UAE?

In most cases, no minimum capital is required for company formation. However, certain regulated activities or free zones may specify a capital requirement, which is usually not required to be deposited.

5. What is the cheapest way to start a company in the UAE?

The most cost-effective way to start a company in UAE is through a free zone license with a flexi-desk option, where total costs can start from around AED 12,000, depending on the free zone and package.

6. Do I need an office to start a company in the UAE?

Yes, a registered business address is mandatory. Mainland companies require physical office space, while many free zones offer shared or virtual office solutions as part of the license package.

7. Is corporate tax applicable when starting a company in UAE?

Yes, the UAE has introduced corporate tax at 9% on taxable profits above the threshold. However, many free zone companies may qualify for corporate tax benefits if they meet regulatory conditions.

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