How to open a Business in UAE: A Complete 2025 Guide for Entrepreneurs

How to open business in UAE in 2025: Introduction

Dubai has long positioned itself as a global business hub, offering a strategic location, world-class infrastructure, and investor-friendly policies. Whether you're a startup founder, SME owner, or a multinational looking to establish a regional presence, registering a business in Dubai offers unmatched advantages.

This guide outlines the step-by-step process to successfully register your business in Dubai in 2025, covering legal structures, licensing, documentation, and practical tips to ensure compliance and operational readiness.

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1. Decide Your Business Activity

The Department of Economic Development (DED) maintains an extensive list of permitted business activities. This step determines the type of license you will need:

• Commercial License – For trading businesses

• Professional License – For service-oriented firms (e.g., consulting, legal)

• Industrial License – For manufacturing or industrial activity

Be precise: activities like e-commerce, logistics, or digital marketing may fall under multiple subcategories.

2. Choose the Right Jurisdiction

Dubai offers two primary jurisdictions:

• Mainland: Allows you to operate anywhere in the UAE and bid for government contracts. Requires local sponsorship or service agents.

• Free Zone: Offers 100% foreign ownership, tax incentives, and simplified setups — but limits you to operating within the Free Zone or exporting.

Some popular Free Zones include:

• Dubai Multi Commodities Centre (DMCC)

• Dubai Internet City (DIC)

• Dubai Silicon Oasis (DSO)

Choose based on your business goals, client base, and ownership preferences.

3. Select a Legal Structure

Your business’s legal framework will impact liability, taxes, and expansion options. Common structures include:

• Limited Liability Company (LLC)

• Sole Proprietorship

• Free Zone Company (FZC/FZE)

• Branch Office of a Foreign Company

  
  

Note: An LLC on the mainland must have a local service agent or sponsor owning 51% of shares for some activities, although majority of the business types are now eligible for 100% foreign ownership even in mainland. For example, general trading, consulting services, manufacturing, IT services etc. are eligible for 100% foreign ownership.

Visit www.invest.ae to see whether the activity you need is eligible.

4. Register a Trade Name

Your business name must:

• Be unique and not duplicate any existing registered company

• Avoid any religious, political, or offensive references

• Match your business activity

Submit your name request through the DED or Free Zone portal. Once approved, you’ll receive a Trade Name Reservation Certificate.

5. Apply for Initial Approval

This step confirms that the UAE government has no objection to your business. Documents typically required:

• Passport copies of shareholders

• Business plan (in some zones)

• NOC from a current sponsor (if applicable)

Initial approval is usually granted within 1–3 working days.

6. Draft and Notarize the MOA

For mainland companies, especially LLCs, a Memorandum of Association (MOA) is required. It outlines:

• Shareholding structure

• Capital contributions

• Profit distribution

• Business scope

The MOA must be notarized through a UAE legal notary. This is done automatically by the authorities now.

7. Secure a Business Location

A physical address is mandatory for all businesses. Options include:

• Dedicated office space

• Shared co-working space (approved by authorities)

• Virtual offices (allowed in many Free Zones)

Ensure your tenancy contract (Ejari) is registered with the relevant municipality.

Instant license: While opening a LLC in mainland, you can opt for instant license which exempts you from obtaining a tenancy contract for the first year of business.

8. Final License Issuance

Once all documents are verified, the licensing authority will issue your business license. Additional permits may be required based on your activity — for example, health, education, or food handling certifications.

9. Open a Corporate Bank Account

Choose from UAE’s major banks like Emirates NBD, Mashreq, or international banks like HSBC. Requirements usually include:

• Business license

• Shareholder passports

• MOA

• Office lease agreement

Account approvals can take 1–4 weeks, depending on the bank’s compliance process.

10. Register with VAT (if applicable)

If your business exceeds the mandatory threshold (currently AED 375,000 annual turnover), you must register for Value Added Tax (VAT) through the Federal Tax Authority (FTA).

11. Register with Corporate Tax (Mandatory)

Every LLC, whether in mainland or freezone, must register for corporate tax with FTA within 3 months from the date of incorporation. This is mandatory even when you forecast that you will not generate any revenue / income during the initial years of business.