Scaling from the Sand: A Founder’s Guide to Starting a Business in the UAE

What exactly are you offering? Whether it’s a SaaS platform or a luxury fashion label, every UAE business begins with declaring a specific activity. It determines the license, location, and legal framework you’ll operate under. 

Tip: Some regulated activities like healthcare, education, or financial services require extra permissions. Research the activity list provided by the DED or Free Zone authorities before choosing.  

 There are three main options for company setup in the UAE. Choose based on your target market, ownership preference, and operational needs: 

Mainland Company 

• Operate anywhere in the UAE, including taking government contracts. 

• Provides an option in a wide array of commercial and industrial activities, offering greater operational flexibility 

Free Zone Company 

• Ideal for international trade and online businesses. 

• Enjoy 100% foreign ownership, tax incentives, and easy setup. 

• Limited to operating within the Free Zone or for export purposes. 

Offshore Company 

• Suitable for holding assets and international operations. 

• Cannot trade directly within the UAE. 

• Choosing the wrong type can limit growth or raise costs. Always align your choice with long-term plans. 

Each jurisdiction has its own authority, rules, and benefits. Picking the right one is crucial for aligning with your business model and long-term goals. 

• Dubai Mainland and Abu Dhabi Mainland – Great for general business and B2C services. 

• Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC) – Ideal for financial entities like banks, asset management firms, wealth management, and capital market participants. 

• Sharjah Media City (Shams), Meydan Free Zone, Ras Al Khaimah Economic Zone (RAKEZ), etc. - Designed to empower creative entrepreneurs, startups, SMEs, companies, and freelancers. 

• DMCC – Suits businesses in commodities trading, crypto, and blockchains. 

Jurisdiction matters. Where you choose to register impacts compliance, speed of approval, and future expansion. For founders starting a business in the UAE, understanding each zone’s strengths helps ensure you don’t limit your growth potential.

Your company’s legal structure affects taxes, liability, and how you raise capital. Common structures include: 

• LLC (Limited Liability Company) – Suitable for most mainland businesses. 

• Sole Establishment – Owned by one individual. 

• Free Zone Entity (FZE/FZCO) – Used within Free Zones for full foreign ownership. 

Choose a company name that fits UAE naming rules: 

• Avoid religious or offensive terms. 

• Descriptive names are recommended. 

• Words like “International” or “Global” may need special approval. 

 Apply for initial approval from the Department of Economic Development (DED) or the Free Zone authority, depending on your chosen jurisdiction.  Approvals are mandatory in most jurisdictions before you can proceed. For anyone starting a business in the UAE, this step confirms that your idea aligns with national and local economic guidelines. 

You'll need: 

• Passport copies of shareholders and managers 

• UAE residence visa (if applicable) 

• Lease agreement (for office space) 

• Memorandum of Association (MOA) 

• Legal certifications based on your business type and jurisdiction 

Based on your business activity, apply for one of the following: 

• Industrial License – Manufacturing and production activities. 

• Professional License – For businesses offering services like consulting, marketing, etc. 

• Crafts license - Businesses specializing in craftsmanship and handmade products. 

• Tourism license - Required for businesses in the tourism sector, such as travel agencies, tour operators, or hotel management. 

• Commercial License – Trading and sales activities 

• Agricultural license -  Agriculture and farming related businesses 

 Getting your business license is a core milestone when starting a business in the UAE. It legally allows you to operate and determines what services or products you can offer. Starting a business in the UAE doesn’t have to be overwhelming. With the right information and a clear plan, you can launch quickly and stay compliant from day one. 

Note: Costs vary by jurisdiction. Free Zones usually offer bundled packages. Mainland setups may include local agent fees and mandatory office rentals. 

To carry on business in this country, a corporate account is one of the prerequisites. A business bank account is mandatory. Requirements vary by bank but typically include 

• Valid business license 

• Shareholder documents 

• Minimum deposit (depends on the bank) 

Pro tip: This step can take time for non-residents. Choose a bank that fits your transaction needs and activity profile. 

 You can apply for investor, partner, and employee visas depending on your license type and office space. Visa quotas depend on the jurisdiction and office size.

 You must register with the Federal Tax Authority if: 

• Your annual taxable revenue exceeds AED 375,000 (for VAT) 

• You are eligible for Corporate Tax as per UAE regulations 

Important Note: Corporate Tax (CT) registration is required within 3 months of your company’s incorporation, even if your business does not meet the VAT threshold.  

Starting a business in the UAE doesn’t have to be overwhelming. With the right information and a clear plan, you can launch quickly and stay compliant from day one. Make the right decisions early to save time, money and avoid legal headaches.  Start smart, stay compliant, and scale from the sand.  

Disclaimer: Content posted is for informational & knowledge sharing purposes only and is not intended to be a substitute for professional advice related to tax, finance, legal, compliance or accounting. No warranty whatsoever is made in this regard, and it is not intended to provide and should not be relied on for tax/ finance/ legal/ compliance or accounting  advice. The content posted is subject to future amendments / changes / clarifications in the regulation by the authorities. For any clarifications, you may contact our finance, tax, compliance, legal team.