Strategic location, tax advantages and pro-business policies, where is this one place where all these advantages come together? Entrepreneurs and business-people are always looking for that right location to set up their business in. One such country is the UAE.
The country has established itself as a global business hub, offering myriad of benefits to entrepreneurs, investors and business-people alike.
So, how do you go about setting up your business in the UAE? In this blog, we are going walk you through everything you need to know about the process. Time to get your ideas off the ground, and let’s transform your vision into reality.
Understanding the UAE Business Structure
There three main types of business registrations that the UAE offers: Mainland, Free Zones and Offshore. Each with their own unique advantages. The choice depends on what industry are you in, what are your goals and what are your operational needs.
Mainland:
The name itself is the clue, this registration allows you to operate your business from anywhere in the country as well as internationally. If your focus is securing government contracts or trading in the local market then this is an ideal option.
Key Aspects:
- Depending on your industry, 100% foreign ownership is permitted.
- For profits above AED 375,000, 9% corporate tax is applicable.
- Unrestricted access to local market
- Eligible to work with UAE’s governmental entities.
Procedure for Mainland Registration
- Identify your business activity and accordingly check its legal requirements with the Department of Economic Development (DED).
- Register your trade name and procure your initial approvals.
- It is mandatory that you have an office space picked out.
- Gather all the documents and submit them to obtain your business license.
- If not a citizen, apply for the necessary visas and open a corporate bank account.
Pros & Cons
| Pros | Cons |
| No trade restrictions | Higher licensing fees |
| Can operate anywhere in the UAE | Mandatory office space required |
| Eligible for govt. contracts | Corporate tax law implies |
Free Zones:
These are designated areas formed by the government for business to operate in. International businesses and startups prefer them because of certain tax benefits and does not require direct access to the UAE mainland market.
Key Aspects:
- Allows 100% foreign ownership.
- Selected Free Zones have zero corporate tax
- Specific industries like fintech, logistics , media etc have assigned Free Zones.
- Overall has a faster setup process.
Procedure for Free Zone Registration
- Choose a Free Zone that aligns with your industry. For eg. Dubai Internet City for tech startups
- Through Free Zone authority apply for a business license.
- Get a Flexi-desk or office space, depending on the requirements of your Free Zone.
- Submit necessary documents, like passport copies business plan and trade name registration.
- After getting your business license, open a corporate business account.
Pros & Cons
| Pros | Cons |
| Quick and cost-effective setup process | Allows limited trade within the UAE mainland |
| Tax incentives and 100% ownership | Business must operate within the Free Zone |
| Full profit repatriation | Restrictions on business activities outside the Free Zone |
Offshore
Offshore licenses are an ideal choice for international investors seeking asset protection, international trading, and tax planning. Although, offshore registered companies cannot conduct business within the company.
Key Aspects:
- No VAT and zero corporate tax.
- No physical office or employees required.
- Suitable for holding investments, real estate, and intellectual property.
- No trade allowed within the UAE.
Procedure for Offshore Registration
- Pick your offshore jurisdiction. Like, Jebel Ali Free Zone (JAFZA), Ras Al Khaimah (RAK), or Ajman Offshore.
- Submit necessary company documents, business details, and passport copies.
- This step is mandatory for offshore licenses, to appoint a registered agent.
- Obtain an offshore company incorporation certificate.
- Open an international business bank account.
Pros & Cons
| Pros | Cons |
| Ideal for asset protection and tax optimization | Cannot operate within the UAE |
| No need for physical presence | Limited banking options |
| 0% VAT and corporate tax | Owners aren’t allowed residency visas |
UAE Business Registration Fees & 2025 Updates
- License Type
- Location
- Company Activity
These are three factors that decide your registration fees and setup costs in the UAE. Initial government fees are transparent, but entrepreneurs should be prepared for procedural costs like visas, office space, and renewals.
| Business Type | Estimated Cost (AED) |
| Mainland Business License | 15,000-50,000 |
| Free Zone License | 5,000-15,000 |
| Offshore Setup | 10,000-30,000 |
2025 Tax & Legal Updates
- Foreign Ownership: Previously, mainland businesses had to have a UAE citizen as a partner in their business. But now, all licenses allow 100% foreign ownership except in sectors.
- Corporate Tax: Mainland businesses now are subject 9% corporate tax on earnings over AED 375,000.
- VAT: Before 2018, the UAE was a VAT-free country. Now, 5% is levied on most goods and services. Healthcare, education, and some free zones businesses are exempted.
Final Thoughts
Digitization and accessibility has made business registration in the UAE more streamlined than ever. What once was a complicated paper-heavy process has transformers into an efficient digital procedure because of the UAE’s commitment to technological advancement.
Entrepreneurs now can navigate it with minimal friction, with some registrations possible in as little as 24-48 hours. This is due to UAE’s integrated online platforms, reducing processing times and unnecessary visits to govt. offices. So, all that is left is to choose the right business structure to set up your company in the UAE and smooth sailing from there. The UAE has ascertained itself as not just a business friendly destination but also the world’s most accessible market for company establishment.
Looking for some help on this, get in touch with Prateel Tosniwal to start your registration process.
FAQs
What is the best business structure in the UAE for foreign entrepreneurs?
The ideal choice are Free Zones, because first of all they allow 100% foreign ownership, on top of that, they offer tax exemptions and minimal operational costs. Although, if your business requires to continuously trade within mainland UAE or you are looking into getting government contracts then a Mainland License is more suitable.
How long does it take to register a company in the UAE?
Well, the time-period often depends on your type of business activity. For Free Zones and Offshore companies, it can take up to 3-10 days. Mainland ones may require 2-4 weeks for additional approvals.
Do I have to live in the UAE to register my business?
The answer is yes and no. It depends what license you are registering for. Foreign investors can register and operate their business remotely, especially in Free Zones and Offshore jurisdictions. Mainland and Free Zone ones however do require a UAE residency visa.
How expensive is it to start a business in the UAE?
Every license has a range of fees which depends on the sector your business will operate in and the location. Free Zones businesses start as low as AED 5000 whereas Mainland ones have higher costs because of physical office space requirement. Offshore ones have comparatively lower setup costs but limited operational flexibility.