Company Formation in Dubai : Process, Cost Involved - 2025

Key Takeaways

• Choosing the right jurisdiction—Mainland, Free Zone, or Offshore—is essential to align your business structure with your goals, market access, and operational needs.
  
  
• Careful planning, including a detailed business plan, feasibility assessment, and budget analysis, ensures your company formation process is efficient and cost-effective.
  
  
• Meeting all eligibility criteria, preparing the required documents, and following proper licensing and compliance steps allows your business to operate legally and thrive in Dubai’s dynamic market.

What is Company Formation in Dubai?

Company formation in Dubai refers to the process of legally setting up a business in the city. This involves licensing your company with the relevant authorities, obtaining the necessary licenses, and meeting all regulatory requirements to operate within the UAE. 

Whether you’re launching a small startup, a medium-sized enterprise, or a large corporation, company formation in Dubai needs to be fully compliant with local laws and positioned for growth.

Dubai offers three business jurisdictions for company formation, including mainland, free zone, and offshore, each with its own benefits, costs, and operational flexibility. Entrepreneurs can choose the structure that best suits their business goals, whether it’s accessing the UAE market, enjoying tax advantages, or expanding internationally.

With its strategic location, world-class infrastructure, and investor-friendly policies, Dubai has become a top destination for global entrepreneurs. Properly forming your company here not only provides legal recognition but also opens doors to the city’s thriving economy, partnerships, and opportunities for long-term success.

Over the past decade, we’ve seen countless startups thrive in Dubai simply because they chose the right structure and followed the formation process carefully. Getting it right from the start saves time, money, and headaches down the line.

This guide delves into the types of company formations, processes, and costs involved in forming a company in Dubai.

Types of Company Formation in Dubai

Dubai offers multiple pathways for entrepreneurs to establish a business, each designed to meet different operational needs, ownership structures, and market access. 

Understanding the differences between mainland, free zone, and offshore companies is key to choosing the right setup for your business.

1. Mainland Company Formation

A mainland company is licensed under the UAE’s Department of Economy & Tourism (DET) and allows businesses to operate anywhere in Dubai and across the UAE without geographic restrictions.

2. Free Zone Company Formation

A free zone company is set up within one of Dubai’s many specialized free zones, each tailored for specific industries and limited to operating within those zones and internationally.

3. Offshore Company Formation

An offshore company in Dubai is licensed under Dubai’s offshore authorities, designed primarily for international business operations, asset protection, and tax efficiency.

‍

Types of Business Structures in Dubai

Business structures in Dubai refer to the different legal forms a company can take, defining ownership, liability, and operational framework for conducting business.

‍

Step-by-Step Process of Company Formation

1. Choose the Right Business Structure

Start by selecting a business structure that fits your goals and operations. Common options include a Mainland LLC, Free Zone Company (FZE/FZC), Offshore Company, or a Branch Office of an existing business. Your choice affects ownership rights, legal obligations, and where you can operate within the UAE.

2. Reserve Your Company Name

Pick a unique trade name that follows the DET or relevant free zone authority guidelines. The name should reflect your business activity, avoid offensive or religious references, and not duplicate existing names.

3. Apply for Initial Approval & Business License

Submit your business plan, shareholder details, and proposed activities to obtain initial approval. Then, apply for the appropriate business license—Commercial, Professional, or Industrial—depending on your operations. This step legally authorizes your business to operate in Dubai.

4. Choose Your Office Space or Flexi-Desk

Select a workspace that meets your business needs and jurisdiction rules. Mainland companies require a physical office lease (Ejari), while free zones often offer flexi-desk or virtual office options to reduce setup costs.

5. Prepare Documents & Complete Company Enrollment

Submit all required documents—passport copies, MOA, AOA, and lease agreements—to complete enrollment with the DET or free zone authority. Once approved, you’ll receive your trade license and can officially start operations.

6. Apply for Investor & Employee Visas

After obtaining your license, apply for your investor visa to gain UAE residency. You can then sponsor employee visas, ensuring compliance with UAE labor and immigration regulations.

7. Open a Corporate Bank Account

Finally, open a business bank account with a UAE-based bank to manage company finances. Banks may require your trade license, MOA, passport copies, and proof of business activity for account activation.

‍

Cost of Company Formation in Dubai (2025)

The cost of starting a company in Dubai in 2025 depends on the jurisdiction: mainland, free zone, or offshore. Free zones remain the most affordable, while mainland setups cost more due to mandatory office space.

Typical Cost Breakdown:

• Trade name & initial approvals: AED 600–1,200 ($163–$327)
  
  
• License issuance: AED 7,000–15,000 ($1,905–$4,085)
  
  
• Office rent: From AED 15,000+ annually ($4,085+)
  
  
• Visa costs: AED 3,000–7,000 ($817–$1,905)
  
  
• Bank account minimum balance: AED 10,000–25,000 ($2,722–$6,805)
  
  
• Other costs: Immigration card, MOA drafting, PRO fees
  
  

Estimated First-Year Total:

• Mainland: AED 30,000–50,000+ ($8,167–$13,612+)
  
  
• Free Zone: AED 15,000–35,000 ($4,085–$9,526)
  
  
• Offshore: AED 15,000–25,000 ($4,085–$6,805)

Dubai offers setup options for every budget, free zones for cost-conscious entrepreneurs, and the mainland for full market access.

Eligibility Criteria for Company Formation in Dubai

The requirements for setting up a business in Dubai vary depending on whether you choose a mainland or free zone jurisdiction. However, the general eligibility criteria include:

• Age: You must be at least 18 years old to establish a company.
  
  
• Nationality: Most jurisdictions have no nationality restrictions, though certain free zones may have specific guidelines for foreign investors.
  
  
• Criminal Record: Applicants must have a clean criminal record in the UAE and internationally.
  
  
• Financial Capability: You should have sufficient funds to start and operate the business, including covering licensing and setup costs.
  
  
• Business Plan: A clear business plan outlining your objectives, activities, and growth strategy is often required.

Documents Required for Company Formation in Dubai

‍

Company Formation in Dubai with RadiantBiz

We begin by assessing the eligibility of business owners, as the UAE has specific criteria that must be met. Eligibility may vary, especially for certain nationalities, due to changing visa and immigration rules.

Once eligibility is confirmed, our business consultants help you develop a detailed business plan. We then evaluate the feasibility of the plan and, based on this, analyze your budget and determine the most suitable jurisdiction for your business.

If your business budget falls outside Dubai’s cost threshold, we recommend exploring other emirates and their free zones located near Dubai, offering cost-effective alternatives without compromising operational efficiency.

FAQs

1. Who can set up a company in Dubai?

Anyone over 18 years old can establish a business in Dubai. Most nationalities are allowed, though eligibility may vary depending on visa and free zone regulations.

2. What are the main types of business jurisdictions in Dubai?

Dubai offers three main options: Mainland, Free Zone, and Offshore. Mainland allows full access to the local market, Free Zones offer 100% foreign ownership and tax benefits, and Offshore is ideal for international trade without UAE residency requirements.

3. Can I get a UAE residence visa immediately after company licensing?

Non-UAE nationals can apply for a residence visa after obtaining the business license, which allows them to live and work in the UAE legally.

Why Company Formation in Dubai is a Smart Business Move

Company formation in Dubai provides entrepreneurs with a legal, structured, and growth-oriented foundation to operate in one of the world’s most dynamic business hubs. 

By choosing the right jurisdiction—mainland, free zone, or offshore—and following the proper steps, businesses can benefit from market access, tax advantages, and investor-friendly regulations.

Careful planning, including eligibility assessment, business plan evaluation, budget analysis, and selecting the appropriate setup, ensures a smooth formation process. For those whose budget exceeds Dubai thresholds, exploring nearby emirates and free zones can offer cost-effective alternatives without sacrificing operational efficiency.

Ultimately, setting up a business in Dubai opens doors to long-term growth, strategic partnerships, and international opportunities, making it an attractive destination for startups and established businesses alike.

Seek our professional on-the-ground guidance, contact us via mail at info@radiantbiz.com, WhatsApp‬, or call us at +971521322895‬!