Setting up a company in Dubai does not require the owners to travel: a free zone licence is issued in five to seven working days. What takes longer, and decides whether the structure actually works, is the bank account, the tax status of the activities you select, and how the company is treated in the country where its shareholders live.
Setting up a company in Dubai: which structure is right for you?
For most foreign investors setting up a company in Dubai, the answer is a free zone company: 100% foreign ownership, no local partner, no paid-up capital, a fully online incorporation and the possibility of 0% corporate tax on qualifying income. At IFZA (International Free Zone Authority), our legal partner in Dubai, four structures are available; the choice depends on who the shareholder will be and whether a separate legal entity is wanted. Whatever the structure, the company name carries the FZCO suffix.
Formed with a passport, a photo and a proof of address; up to three shareholders are included in the IFZA package. The structure most often used when setting up a company in Dubai.
- Separate legal entity, limited liability
- Shared workstation in the licence covers up to three visas
- Dividends are declared in the shareholder’s home country
The parent’s shareholder resolution and registry documents are legalised through the UAE embassy in its country; the resolution is valid for 90 days from legalisation.
- The parent receives profits as participation income
- The document chain adds 2–4 weeks
- The broad power of attorney in the resolution should be limited
A branch may trade; a representative office may only promote and research. Both are formed with the parent’s legalised documents.
- Profits are the parent’s own income
- Visas and a bank account are possible
- Heavier document load than a new company
If customers are mostly inside the UAE, a retail or food outlet will open, or government tenders are the target, a mainland LLC licensed by the Dubai Department of Economy and Tourism is required; it needs a physical office under a registered lease and costs more. Since Dubai Executive Council Resolution No. 11 of 2025 (March 2025), a free zone company can also operate on the mainland through a branch licence or a six-month temporary permit from the Department. For many businesses setting up a company in Dubai, this makes “start in a free zone, add mainland access later” the lower-cost route.
How does setting up a company in Dubai work, step by step?
For free zone incorporations we work through IFZA (International Free Zone Authority), a Dubai free zone authority that is our legal partner. When setting up a company in Dubai through a free zone, the application runs through the authority’s portal from any country; its banking desk assists with account opening at no charge.
- Day 1–2Activity, package and trade nameUp to three activities on one licence; professional and commercial activities can be combined. Three name options are filed in order of preference and the package is chosen by the number of visas.
- Day 2–5Application and identity checksScanned passports, a digital photo and a proof of residential address for every shareholder and manager; face verification online. A corporate shareholder adds a legalised shareholder resolution and corporate documents.
- Day 5–10Licence, memorandum and share certificatesIssued electronically. The company can sign contracts and invoice from this point.
- Week 2–3Establishment card and entry permitThe company’s immigration file is opened and an electronic entry permit is issued to the person who will hold the residence visa.
- Week 3–5Travel: medical test, biometrics, Emirates IDThe only stage that requires presence in the UAE. Residence is completed in 10–14 working days.
- Week 4–10Bank accountFour to eight weeks for conventional banks, shorter for digital banks. IFZA’s banking desk matches the business to a suitable bank by activity and expected turnover; the bank approves the business model, not the licence.
A mainland incorporation runs in a different order: the office lease and the notarised memorandum come before the licence, the licence takes one to three weeks, and Dubai Chamber membership and registration with the Ministry of Human Resources and Emiratisation are added.
What documents are required for incorporation?
For a free zone company with individual shareholders the list is short and nothing needs legalisation. With a corporate shareholder the chain is longer: the UAE is not party to the Apostille Convention, so an apostille is not sufficient, documents go through embassy legalisation, and that step sets the incorporation timetable.
| Document | Handling |
|---|---|
| Passport identity page | Scan is sufficient |
| Latest visa or entry stamp | Scan is sufficient |
| Passport photo, white background | Digital |
| Proof of address or utility bill | Within the last three months |
| Three trade name options | In order of preference |
| List of activities | With the licence application |
| Shareholder resolution | Notary, embassy, translation, attestation in the UAE |
| Registry extract and articles | Notary, embassy, translation |
| Certificate of incorporation | Notary, embassy, translation |
| Validity of the resolution | 90 days from legalisation |
Is a local partner, a local manager or a nominee director required?
No. Setting up a company in Dubai does not require a UAE national as partner, manager or agent. Free zone companies are fully foreign-owned in every structure and no local person holds any role. On the mainland, too, foreign investors have owned 100% since 2021 outside a short list of strategic activities; a UAE national is involved only where a foreigner sets up a sole establishment for a professional activity on the mainland, as a local service agent with no shares and no management role.
The manager named in the memorandum does not need to be a UAE resident. In practice, however, banks require an Emirates ID from at least one authorised signatory, so one manager usually takes a residence visa. A visa lapses if its holder stays outside the UAE for more than 180 days.
A “nominee director” is not a concept the UAE regulates: the manager’s passport and face verification sit in the licence file, the beneficial-owner register records who controls the company, and a nominee does nothing to answer the home-country question of where the company is actually managed.
Capital, trade name and multiple activities
Setting up a company in Dubai does not require capital to be deposited or blocked. In a free zone company a minimum capital of AED 10,000 is declared in the memorandum and the shareholders give a financial undertaking for their shares in the incorporation resolution; a mainland company has no statutory minimum and states a capital the authority considers adequate for the activity.
Trade names are filed as three options and the first available one is registered. Every word must have at least three characters; religious terms and words such as “Dubai” or “Emirates” are not permitted. A free zone licence carries the suffix FZCO, a mainland company L.L.C.
An IFZA licence includes three activities; each additional activity costs about AED 1,000, and professional activities can be combined with commercial ones on the same licence. Whether an activity keeps the 0% free zone rate, or is treated as excluded income taxed at 9%, is decided by the corporate tax rules, not by the licence; this is the point most set-up quotes leave out.
What does setting up a company in Dubai cost?
The figures below are indicative first-year amounts in AED, per the IFZA price list, for a single shareholder setting up a company in Dubai in a free zone. Package prices follow the authority’s current list; government fees change periodically.
| Item | Amount (AED, IFZA) |
|---|---|
| Licence, no visa (three activities, up to three shareholders, shared workstation included) | from 12,900 |
| Licence, one visa allocation | from 14,900 |
| Licence, two or three visa allocations | 16,900 / 18,900 |
| Establishment card (immigration file) | ≈ 2,000 |
| Residence visa, medical, Emirates ID (per person) | 4,500–6,000 |
| Health insurance (per person, per year) | 700–2,000 |
| Flexi desk or dedicated office (optional, per year) | 5,000–15,000 / 25,000–60,000 |
| Document legalisation (corporate shareholder) | 3,000–8,000 |
| Bookkeeping, VAT and corporate tax filings (per year) | 12,000–30,000 |
| Indicative first-year total, one visa | ≈ 21,000–25,000 |
A mainland licence costs AED 10,000–15,000; name reservation, the notarised memorandum, chamber membership, a registered office lease (AED 20,000–45,000) and a 5% municipality fee on the rent are added. The first-year total for a mainland company with one visa is in the range of AED 40,000–70,000.
Taxes, accounting and invoicing after incorporation
Corporate tax. Setting up a company in Dubai does not remove corporate tax: 0% applies to the first AED 375,000 of taxable income and 9% above it, for free zone and mainland companies alike.
A free zone company pays 0% on qualifying income only if it has adequate substance in the zone, earns from qualifying activities and keeps non-qualifying income below the de minimis limit (the lower of 5% of revenue or AED 5 million); it must also hold audited accounts. If one of those conditions is breached the company leaves the free zone regime for the current and the following four tax periods. Companies with revenue up to AED 3 million may elect small business relief for tax periods ending on or before 31 December 2026.
VAT. 5%. Registration is mandatory once taxable supplies exceed AED 375,000 in twelve months and optional above AED 187,500. Services supplied to customers outside the UAE are zero-rated with the right evidence.
Accounting. Books are kept under IFRS, or IFRS for SMEs below AED 50 million of revenue, and retained for seven years. Audited statements are required above AED 50 million of revenue and for every free zone company applying the 0% rate.
Invoicing. A tax invoice must show the supplier’s tax registration number, the VAT breakdown and, for foreign currency invoices, the AED equivalent. Structured e-invoicing through an accredited service provider becomes mandatory on 1 January 2027 for businesses with revenue of AED 50 million or more and on 1 July 2027 for all others.
- +15 days: beneficial-owner register
- +3 months: corporate tax registration (AED 10,000 penalty if late, even with no tax due)
- At threshold: VAT registration within 30 days
- Quarterly: VAT return, 28 days after period end
- +9 months after year end: corporate tax return and payment; transfer pricing disclosure where related-party transactions exceed AED 40 million
- Annually: licence and establishment card renewal; residence visas every two years
How long does opening a bank account take?
Setting up a company in Dubai ends with the licence and starts with the bank. Account opening takes four to eight weeks at conventional banks and refusals happen; the licence does not bind the bank, which assesses the business model itself. Digital banks are faster, with a narrower service.
| What the bank looks for | How it is met |
|---|---|
| A single, clear activity | Activities on the licence that relate to each other |
| Commercial reality | A signed contract or an issued invoice |
| Source of funds | The shareholder’s income or sales evidence |
| Resident authorised signatory | A manager holding an Emirates ID |
| Shareholder background | Curriculum vitae and professional references |
| Expected activity | Expected turnover and countries of trade |
| Address | Shared workstation or flexi desk agreement |
Heavy expected trade with countries seen as high risk, unrelated activities grouped on one licence, and a business model that does not match the shareholder’s professional background. All three can be avoided at the incorporation stage, when the activities are selected; they are hard to correct once an application has been refused.
Work permits and employer obligations
In a free zone company the residence visa and the work permit are issued together through the free zone authority: an investor visa for a shareholder (no salary requirement) and an employee visa with an employment contract for staff. Standard visas run for two years. In a mainland company the same steps go through the Ministry of Human Resources and Emiratisation.
Setting up a company in Dubai gives shareholders and employees the right to a residence visa; there are no social security contributions for foreign employees. The employer’s statutory cost is health insurance (mandatory in all emirates since 1 January 2025 and a condition of every visa), an end-of-service gratuity of 21 days’ basic salary per year for the first five years and 30 days thereafter, and the unemployment insurance scheme, which the employee funds at AED 5–10 a month.
Total employer cost is typically 1.08–1.12 times gross salary. Free zone companies carry no Emiratisation obligation; quotas apply only to mainland companies with 20 or more employees in listed sectors and to all mainland companies with 50 or more employees.
The home-country side: what decides the outcome
The UAE has double taxation agreements with more than 140 countries. A treaty allocates taxing rights; the domestic law of the country where the shareholders live decides residence, controlled foreign company treatment and the taxation of dividends. Each of the points below turns on facts that should be settled before incorporation, not after.
- Place of effective management. A Dubai company whose decisions are taken in another country is usually treated as a tax resident of that country and taxed there on its worldwide income. Substance in Dubai, with a real manager, records and premises, is the only defence.
- Controlled foreign company rules. Most countries treat the UAE’s 9% rate, and the 0% free zone regime, as low taxation. Whether undistributed profits are attributed to the shareholders then depends on the share of passive income and on the thresholds in their own law.
- Dividends and participation exemptions. Many countries condition their participation exemption on a minimum tax burden abroad that a Dubai company does not meet, and apply a reduced exemption or ordinary taxation instead. The percentage and the conditions differ by country and change frequently.
- Treaty rates and the residency certificate. Reduced withholding on payments to the Dubai company requires a UAE tax residency certificate, which a new company cannot obtain in its first twelve months. Until then the paying country applies its domestic rate.
- Individual shareholders. A UAE residence visa does not by itself end tax residence elsewhere. UAE tax residence requires 183 days of presence in twelve months, or 90 days with a permanent home or business here, and is proven by the same certificate.
Frequently asked questions
Does setting up a company in Dubai require travel?
No. The licence, memorandum and share certificates are issued online. Travel is needed once, for the medical test, biometrics and Emirates ID of the person taking a residence visa; most clients combine this with the bank meeting in one trip of two to three weeks.
When setting up a company in Dubai, can a company be the shareholder instead of an individual?
Yes. The shareholder resolution, registry extract, articles and certificate of incorporation are notarised in the parent’s country, legalised through the UAE embassy there (the UAE is not party to the Apostille Convention), translated into English and attested in the UAE. The resolution is valid for 90 days from legalisation, which sets the timetable.
Is a UAE partner or sponsor required?
Not in any free zone structure, and not for mainland companies outside strategic activities. A local service agent is needed only for a foreign-owned sole establishment or civil company on the mainland.
Can a free zone company sell to customers in Dubai?
Not directly from the free zone licence. Since 2025 it can obtain a mainland branch licence or a temporary permit from the Department of Economy and Tourism, or appoint a mainland distributor. Mainland income may also affect the company’s 0% corporate tax status.
Does setting up a company in Dubai free zone mean automatic corporate tax exemption?
No. Every free zone company is registered for corporate tax and files a return. The 0% rate applies only to qualifying income of a company that meets the substance, activity, de minimis, audit and transfer pricing conditions; other income is taxed at 9%.
How long does the bank account take, and can it be refused?
Setting up a company in Dubai ends with the licence and starts with the bank: four to eight weeks is realistic, and refusals happen. Banks look for a clear activity, contracts or invoices, source-of-funds evidence and a resident authorised signatory with an Emirates ID.
Does a Dubai company need an office?
A free zone licence includes a shared workstation that satisfies the address requirement for a small number of visas; a flexi desk or an office is rented for more visas. A mainland company must rent a physical office registered under the Ejari system.
How does Ozbek CPA support setting up a company in Dubai?
Ozbek CPA works with IFZA, its legal partner in Dubai, for the licence and residence stages, and handles the parts that sit outside the authority’s scope: choosing the free zone structure against the corporate tax rules, preparing and legalising shareholder documents, structuring the relationship with the parent company, and the tax treatment of the Dubai company in the shareholders’ home country. Bookkeeping, VAT and corporate tax filings after incorporation are provided through the same team.
Ozbek CPA advises investors and companies from any country on setting up a company in Dubai: the choice of free zone structure, document legalisation, the corporate tax status of free zone income, and the home-country treatment of the structure. For a structure review based on your activity and customer base, contact us. Related: Effective Management and Control · Foreign Participation Exemption: Presidential Decision No. 11257 · Transfer Pricing in Turkey.
