Setting up a business in the UAE involves far more than simply filling out a form. Entrepreneurs must choose the right jurisdiction, pick a legal structure, secure immigration approvals and register for tax. The following step‑by‑step guide covers everything from choosing your activity to obtaining residency visas and a corporate bank account.
Choose your jurisdiction & business activity
The UAE offers three broad jurisdictions for company formation: mainland, free zones and offshore. Each has its own rules on ownership, office requirements and permitted activities. Mainland companies can trade anywhere in the UAE and require a professional licence. Free zones such as IFZA, Meydan, Sharjah Publishing City, Ajman Free Zone and RAKEZ offer 100 % foreign ownership, simplified setup and sector‑specific clusters for services businesses. Offshore options (e.g., RAK ICC, JAFZA Offshore) are useful for holding companies but cannot trade inside the UAE.
After selecting a jurisdiction, define your business activity precisely. Activities range from management consultancy to IT services to import/export. Some activities (for example, financial services or education) require additional approvals from regulators.
Select the legal structure
Next, choose a legal structure. The most common options are Limited Liability Company (LLC), Free Zone Company (FZ LLC) and Sole Establishment. Branch offices and subsidiaries of foreign companies are also allowed. If your shareholder is a foreign corporation or you set up a branch, you will need to legalise corporate documents at your home country’s notary, embassy and the UAE Ministry of Foreign Affairs before proceeding – this will add time and cost. Plan accordingly.
Reserve your trade name
Every company must have a unique name that meets the guidelines of the relevant free zone or mainland authority. Names cannot include offensive language, may not infringe trademarks and often must reflect the activity. Submitting two or three options can speed up approval. Once approved, you usually have 30 days to complete the licence process.
Apply for your licence & immigration approvals
Prepare your application dossier: passport copies, proof of address, business plan, Memorandum and Articles of Association, and any special approvals (for example, from the Department of Health for clinics). Free zones may process everything online, whereas mainland applications are submitted through Department of Economic Development (DED) portals. Immigration clearance runs in parallel to ensure your shareholders and managers are eligible to reside in the UAE.
Receive your licence
When your application is approved and the fees are paid, the authority will issue the trade licence. Check that all activities are listed correctly – mistakes at this stage can delay bank accounts or visas. Some free zones provide an incorporation certificate as a separate document.
Obtain your establishment card & e‑Channel registration
Free zone companies must obtain an establishment card from the General Directorate of Residency and Foreigners Affairs (GDRFA). This card enables you to sponsor visas for shareholders and employees. Mainland companies register through e‑Channel, the federal immigration portal, which streamlines visa applications.
Apply for entry permits & residency visas
If your shareholders or employees are outside the UAE, apply for an entry permit. Once they enter the country, change their status to resident by completing a medical test, biometric scan and Emirates ID registration. Finally, their passport will be stamped with a residency visa valid for two or three years.
Obtain your Emirates ID & finalise formalities
Every resident must carry an Emirates ID. After the medical test, provide biometrics at a Federal Authority for Identity, Citizenship, Customs & Port Security (ICP) office. When the ID is issued, your residency is confirmed and you can access various services.
Open a corporate bank account
Banks in the UAE require proof of residency and evidence of business activity. Schedule meetings with several banks to compare requirements. Provide copies of the licence, shareholder documents, business plan and proof of address.
Register for corporate tax within three months & for VAT if applicable
Under UAE Corporate Tax Law, every company (including free‑zone entities) must register with the Federal Tax Authority (FTA) within three months of obtaining its licence. Companies with annual taxable supplies exceeding AED 375 000 must register for VAT. Do not wait until the last minute; penalties apply for late registration.
Comply with AML & UBO requirements
Maintain a Register of Beneficial Owners (UBO), file declarations with the relevant authority and implement anti‑money laundering (AML) policies proportionate to your risks. These obligations apply to both mainland and free‑zone companies.
Implement accounting & HR systems
Invest in cloud accounting software and HR/payroll tools early. Accurate bookkeeping and payroll records help you meet corporate tax and VAT filing deadlines, support immigration audits and simplify future fundraising.
Summary
Setting up a business in the UAE involves careful planning. Choosing the right jurisdiction and structure will minimise costs and maximise flexibility. Work with tax advisors in the UAE who understand both the legal process and the operational realities so you can focus on growing your business.