How to Start a Business in Dubai as a Foreigner in 2025

Dubai is one of the most business friendly cities in the world as it offers a strategic location, tax advantages, and a thriving economy. If you are a foreign investor who look for how to start a business in Dubai as a foreigner in 2025, this guide will walk you through all the necessary steps, costs, and requirements to set up your company successfully.

The government has provided some serious comforts to foreign investors in recent years to take the business landscape to the next level. I have compiled all the details here so that you can pocket the maximum advantages possible.

Dubai offers numerous benefits for foreign entrepreneurs that make it an attractive destination for startups and businesses. Below are some of the key advantages

• 100% Foreign Ownership: Recent changes in business laws allow full foreign ownership in many sectors.
• Tax Benefits: Dubai offers a 0% personal income tax and a low corporate tax rate.
• Strategic Location: Dubai connects businesses to markets in Asia, Europe, and Africa.
• Business Friendly Regulations: Streamlined business setup processes make it easy to establish a company.
• World Class Infrastructure: The city has state of the art facilities, transportation, and logistics hubs.

In the under section, I have mentioned all the essential steps to start a business in Dubai. You should understand and follow them properly to ensure you will face no challenges when launching a business in this dynamic city.

1. Choose a Business Activity

The first step in how to start a business in Dubai is selecting the right business activity. The Department of Economy and Tourism (DET) provides a list of over 2,000 permitted business activities. These include:

• Commercial: Trading businesses like import/export.
• Industrial: Manufacturing and production companies.
• Professional: Service based businesses like consulting and IT services.

2. Decide on a Business Structure

Your business structure determines ownership, legal obligations, and tax liabilities. Below is a list of the most common options which include:

• Sole Proprietorship: Only available for professionals (e.g., consultants, freelancers) in the mainland.
• Free Zone Entities: Specify the difference between FZE (Free Zone Establishment – 1 owner) and FZCO (Free Zone Company – multiple owners).
• LLC: The most common structure for businesses outside Free Zones and allows flexibility in ownership.

3. Select a Business Location

Dubai offers two main options for setting up a business. You have to determine your requirements to make an informed decision that can resonate with your plans and let you promote your company comfortably.

a) Mainland Business

• Requires a license from the Dubai Department of Economy and Tourism (DET).
• Allows you to operate anywhere in the UAE.
• Ideal for businesses targeting both local and international markets.

b) Free Zone Business

• Allows 100% foreign ownership.
• Offers tax exemptions and simplified customs procedures.
• Limited to operating within the free zone or internationally.
• Popular free zones include Dubai Multi Commodities Centre (DMCC), Dubai Internet City (DIC), and Jebel Ali Free Zone (JAFZA).

4. Register Your Business Name

Choose a unique business name that complies with UAE naming conventions. This steps holds much importance as the name you choose should not get any copyright claim from any portion of the globe.

• No offensive or religious terms.
• Must reflect the business activity.
• Cannot include political references.
• Approval is required from the Dubai Department of Economy and Tourism (DET).

5. Obtain a Business License

Your business license depends on the type of business activity. When you start a business in Dubai, it is compulsory to obtain a license to get a legal permit for launching and growing your brand.

• Commercial License: For trading and general businesses.
• Professional License: For service oriented companies like legal consulting.
• Industrial License: For manufacturing or production companies.

6. Get Initial Approvals

Before proceeding, you must get approvals from various government bodies. These initial approvals can streamline the further steps when starting a business in Dubai. The departments from where you have to get these initial approvals are:

• Dubai Department of Economy and Tourism (DET)
• Dubai Municipality (if required for specific activities)
• Relevant Free Zone Authority (for free zone companies)

7. Draft the Memorandum of Association (MOA)

An MOA is required for LLCs and other business structures. You have to create a comprehensive memorandum to make sure it outlines:

• Business activities and objectives.
• Shareholding structure.
• Profit and loss distribution among partners.

Notarization of MOA & Legal Documents: The Memorandum of Association (MOA) and other required documents need to be notarized by a notary public in Dubai, which is an essential legal step.

8. Secure a Business Location

Businesses must lease or buy office space depending on their setup to start a business in Dubai. Free zone businesses must operate within the designated zone, while mainland businesses need Ejari registration for office spaces. 

• Customs Registration (if applicable): Businesses dealing with import/export must register with Dubai Customs to obtain an importer’s code.

9. Apply for Visas

Entrepreneurs and employees must obtain UAE residency visas. The following are the key steps you have to follow in this regard:

• Applying for an entry permit.
• Completing a medical test and Emirates ID registration.
• Obtaining a UAE residence visa (valid for 2-3 years).

10. Open a Business Bank Account

A UAE based corporate bank account is necessary for business transactions, property management, and making investments. That’s why you have to open your account to send and receive payments conveniently. The requirements to open a business account in Dubai include:

• Business License
• MOA
• Shareholder details

If your business generates an annual revenue exceeding AED 375,000, you are required to register for Value Added Tax (VAT) with the UAE Federal Tax Authority (FTA). Further, if your revenue is between AED 187,500 and AED 375,000, VAT registration is optional but recommended.

If you are wondering how to start a business in Dubai free zone, follow these steps:

1. Choose a free zone that suits your business activity.
2. Apply for a trade license through the free zone authority.
3. Get approvals and submit required documents (passport copies, MOA, business plan).
4. Lease an office space in the free zone.
5. Register for a residency visa (if required).
6. Open a business bank account.

The cost to start a business in Dubai depends on the business type, license, and location. Estimated costs in 2025 include:

These are the details on how to start a Business in Dubai as a foreigner in 2025. Dubai is a lucrative destination for entrepreneurs due to its tax advantages, business friendly environment, and global market access. Whether you choose the mainland or a free zone, understanding the steps to start a business in Dubai ensures a smooth and successful setup.

If you are still wondering how can I start a business in Dubai, it is advisable to consult business setup experts or legal advisors to streamline the process and ensure compliance. In this way, you can make an informed decision when launching a brand in this amazing city.