Business Setup in UAE 2025: Complete Guide (Cost, Process & Requirements)
Why Choose UAE for Business Setup in 2025?
The UAE offers numerous advantages that make it an ideal choice for entrepreneurs considering business setup in UAE.
Types of Business Setup in UAE: Mainland vs Free Zone vs Offshore
Understanding the different types of company formations available is crucial for making the right decision for your business.
A mainland company is registered with the Department of Economic Development (DED) and can operate anywhere within the UAE and internationally.
Advantages:
- Ability to conduct business directly with the UAE market and government entities
- No restrictions on office location within the emirate
- Can bid for government contracts
- Flexibility to conduct business anywhere in the UAE
- Access to local market without restrictions
Key Considerations:
- Requires a physical office space (no flexi-desk options)
- Some activities may require a local service agent (though 100% foreign ownership is now allowed in most sectors)
- Generally higher setup and operational costs compared to free zones
Best For:
Businesses targeting the local UAE market, those requiring government contracts, retail operations, and service providers needing local market access.
Free zones are designated areas with special economic regulations designed to attract foreign investment. The UAE has over 45 free zones, each specializing in different industries.
Advantages:
- 100% foreign ownership guaranteed
- Zero corporate tax for up to 50 years (subject to free zone policies)
- 100% repatriation of capital and profits
- No currency restrictions
- Simplified setup process
- Exemption from import and export duties
- Access to world-class infrastructure
Key Considerations:
- Cannot directly trade with UAE mainland market (requires a distributor)
- Must operate from within the free zone premises
- Restrictions on physical retail presence outside the free zone
- License type determines business activities allowed
Best For:
International businesses, consultancy firms, e-commerce operations, trading companies, and businesses focused on export markets.
Popular Free Zones:
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Free Zone
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Ideal For
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Notable Benefits
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Offshore Company Setup
Offshore companies are formed in jurisdictions like RAK ICC and Jebel Ali Offshore, designed primarily for international business activities.
Advantages:
- Asset protection and wealth management
- 100% foreign ownership
- Zero taxation
- Complete confidentiality
- No minimum capital requirements
- No currency controls
Key Considerations:
- Cannot conduct business within the UAE
- No physical office space in UAE
- Cannot apply for UAE residence visas
- Used primarily for holding assets, international trading, and intellectual property management
Best For:
Holding companies, international consultancy, asset protection, and businesses operating outside the UAE.
Step-by-Step Business Setup Process in UAE
If you’re considering business setup in UAE, the process involves several stages. Here’s a comprehensive breakdown to guide you:
Step 1: Choose Your Business Activity
Determining your business activity is the foundation of your company formation. The UAE categorizes business activities into several types:
Trading, import/export, retail, wholesale, distribution
Consultancy, legal services, accounting, marketing, IT services
Manufacturing, processing, assembly operations
Travel agencies, tour operators, hotel management
Your chosen activity will determine the type of license required and may influence whether you should set up in a free zone or mainland.
Step 2: Select Your Business Structure
Choose the legal structure that best suits your business needs:
Most common for mainland, requires minimum 2 and maximum 50 shareholders. Foreign investors can now own 100% in most sectors.
Single shareholder company in a free zone
Multiple shareholders (2-5) in a free zone
Extension of a foreign company
For market research and promotion only, no commercial activities
Single owner, unlimited liability (mainland)
Step 3: Choose Your Trade Name
Selecting an appropriate trade name is an important step in business registration:
- Must not conflict with existing registered names
- Should not contain offensive or religious terms
- Must relate to your business activity
- Cannot use abbreviations like LLC, FZE, or FZCO in certain contexts
- Should comply with the naming conventions of your chosen jurisdiction
Most authorities provide online name pre-approval services to check availability.
Step 4: Apply for Initial Approval
Submit your initial approval application to the relevant authority:
Documents typically required:
- Completed application form
- Business plan (in some cases)
- Proposed trade name
- Intended business activities
- Passport copies of shareholders and managers
- No objection certificate (if currently employed in UAE)
Step 5: Prepare Your Legal Documents
Work with your business setup consultant to prepare all necessary legal documentation:
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Shareholder agreements
- Manager/Director appointment letters
- Power of attorney (if applicable)
These documents must be notarized and, in some cases, attested by the UAE Ministry of Foreign Affairs.
Step 6: Secure Your Office Space
Depending on your business type:
Must have a physical office with a tenancy contract (Ejari registered)
Can choose from:
- Flexi-desk (shared workspace)
- Private office
- Warehouse facility
- Industrial unit
The office space requirement varies by free zone and license type.
Step 7: Apply for Your Business License
For trading and commercial activities
For service providers and consultants
For manufacturing and production
For tourism-related activities
Processing time typically ranges from 2-7 business days, depending on the jurisdiction.
Step 8: Register with Authorities
Complete additional registrations as required:
Registration provides credibility and access to various services
For labor-related matters and employee sponsorship
Mandatory if annual turnover exceeds AED 375,000
Required for all businesses (9% on profits above AED 375,000)
Step 9: Open a Corporate Bank Account
Opening a corporate bank account is essential for business operations:
Required documents typically include:
- Trade license
- Memorandum and Articles of Association
- Passport copies and Emirates ID of shareholders
- Business plan
- Proof of address
- Board resolution
- Certificate of incorporation
Bank account opening can take 2-4 weeks, and banks may require minimum deposit amounts ranging from AED 25,000 to AED 100,000 or more.
Step 10: Apply for Visas
Once your business is established, you can apply for:
The visa process includes medical fitness tests, Emirates ID application, and documentation submission.
Business Setup Cost in UAE 2025 Explained
For entrepreneurs, understanding the business setup cost in UAE is essential for proper planning, as expenses can differ greatly depending on jurisdiction, business activity, and operational requirements.
Mainland Company Setup Costs
- Total Estimated Cost: AED 65,000 - AED 180,000 for the first year
Free Zone Company Setup Costs
Costs vary significantly between free zones. Here are typical ranges:
Free Zone Types
Visa and Other Costs to Consider
Documents Required for Business Setup in UAE
Having the right documentation ready can significantly speed up your business setup process.
For Individual Shareholders
For Corporate Shareholders
This process is known as document attestation or legalization.
Business License Requirements by Activity Type
Different business activities have specific requirements and regulations:
Trading License Requirements:
Professional License Requirements:
Industrial License Requirements:
100% Foreign Ownership in UAE: What You Need to Know
Since 2020, the UAE has made significant changes to foreign ownership laws, making it more attractive for international investors.
Key Changes:
Foreign investors were limited to 49% ownership in mainland companies, requiring a 51% UAE national partner for most activities.
As of June 2021, 100% foreign ownership is permitted for most commercial and professional activities in mainland UAE.
Activities Still Requiring Local Ownership:
Certain strategic sectors still require UAE national ownership:
- Oil and gas exploration
- Public Utilities (water and electricity)
- Public transportation
- Banking and insurance (subject to specific regulations
- Telecom services
- Security and military services
Advantages of 100% Foreign Ownership:
Complete decision-making authority over business operations
All profits belong to foreign shareholders
Elimination of annual fees previously paid to local partners
Clearer corporate governance and reduced complexity
Easier business sale or transfer without local partner approval
Why Choose POAssist for Your Business in UAE?
When it comes to business setup in UAE, entrepreneurs face complex regulations, documentation, and key decisions. POAssist streamlines the entire process with expert guidance and end-to-end services.
Our Services Include:
Why POAssist Stands Out:
Our team has a deep understanding of UAE business regulations and free zone requirements
We tailor solutions to your specific business needs and budget
From initial consultation to post-setup services, we’re with you every step
No hidden fees, clear cost breakdowns from the start
Leveraging our relationships with authorities for quicker approvals
We ensure your business remains compliant with all regulations
Get Started Today!
Setting up your business in the UAE? Call us now!
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