How to Create a Company in Dubai: A Lawyer's Practical Guide

If you're trying to create a company in Dubai and you've already spent an evening scrolling free-zone brochures, you know the noise is unbearable. Every consultant promises 24-hour setup and zero tax. The reality is messier — and a lot of clients sign the wrong structure because nobody told them what the trade-off actually costs.

Quick answer

To create a company in Dubai, you pick between three jurisdictions: mainland (licensed by Dubai Department of Economy and Tourism, the DET), a free zone (over 30 to choose from), or a financial free zone (DIFC, the Dubai International Financial Centre). Mainland lets you trade freely across the UAE and bid for government work. Free zones are cheaper and quicker but restrict onshore trade unless you appoint a local distributor. DIFC suits regulated finance and holding structures. Budget AED 15,000 to AED 50,000 for setup in year one depending on the route.

Mainland vs free zone: pick the structure before the name

Most clients get this backwards. They fall in love with a trade name, lodge it, then discover the activity isn't available in the free zone they chose. Sort the legal form first.

A mainland LLC under Federal Decree-Law No. 32 of 2021 (the Commercial Companies Law) now allows 100% foreign ownership for most activities — the old 51% Emirati partner rule is gone for commercial and industrial categories.[1] Professional firms still typically use a local service agent, which is a paid representative, not a shareholder. You'll deal with DET for the licence, MOHRE (the Ministry of Human Resources and Emiratisation) for labour files, and the General Directorate of Residency and Foreigners Affairs (GDRFA) for visas.

A free zone company is regulated by the free zone authority itself — IFZA, Meydan, DMCC, JAFZA, DAFZA, and so on. Each has its own companies regulations. You get a licence, an establishment card, and visa quotas tied to your office package. The catch: you cannot directly invoice mainland UAE clients for most activities without a distributor or branch. People forget this and end up restructuring 18 months in.

DIFC and ADGM (the latter is in Abu Dhabi but worth flagging) run on common law. DIFC operates under DIFC Companies Law DIFC Law No. 5 of 2018, and the regulator for financial activities is the DFSA (Dubai Financial Services Authority).[2] Setup is more expensive — think USD 8,000+ in year one for a non-regulated Prescribed Company — but you get English-language courts, robust shareholder protections, and a regime international investors actually recognise.

If your business is e-commerce sold to UAE consumers, default to mainland. If you're consulting to overseas clients, a free zone is fine. If you're a fund manager or holding international assets, DIFC.

What it actually costs to create a company in Dubai

Published prices and real prices are different animals. Here's what I see in 2024-2025 invoicing.

Costs (2024-2025, indicative)
- IFZA package with 1 visa: AED 12,900–17,500
- Meydan free zone licence: from AED 12,500
- DMCC standard licence + flexi-desk: AED 34,000–50,000
- DET mainland commercial licence: AED 15,000–25,000 plus Dubai Chamber and tenancy
- DIFC Prescribed Company: USD 1,000 application + USD 2,150 annual + registered office
- Establishment card: AED 2,000
- Per visa (medical, Emirates ID, stamping): AED 3,500–5,000

Add VAT registration if your turnover crosses AED 375,000 (mandatory) or AED 187,500 (voluntary).[3] Add corporate tax registration — every UAE company must register with the Federal Tax Authority regardless of turnover, and the 9% rate kicks in above AED 375,000 of taxable profit under Federal Decree-Law No. 47 of 2022.[4]

The "free zone 0% tax" headline still works for Qualifying Free Zone Persons earning Qualifying Income, but the conditions are strict and most trading companies don't actually qualify. Don't structure around a tax assumption without a written opinion.

The paperwork sequence that actually works

Order matters. Doing visas before the establishment card or signing a tenancy before licence approval are both classic own-goals.

1. Reserve the trade name. DET portal or the free zone portal. Names containing "international", "Middle East", or anything religious need extra clearance.
2. Get initial approval on the activity list. Pull the activity codes from the DET activity database or the free zone's list. Pick narrowly — broader is not better, it triggers regulator clearances (KHDA for education, DHA for health, SCA for financial advice).
3. Draft the MOA. A Memorandum of Association notarised at Dubai Courts for mainland, or signed at the free zone registry. Single-shareholder LLCs are now allowed under the 2021 Companies Law.
4. Secure the office. Mainland requires a registered Ejari tenancy (Ejari is the Dubai tenancy registration system run by RERA, the Real Estate Regulatory Agency). Free zones offer flexi-desks that count as a registered address.
5. Issue the licence. This is the moment you legally exist.
6. Open the bank account. Honestly, this is now the hardest step. Plan four to ten weeks. Have source-of-funds documents ready, ultimate beneficial owner declarations, and a clear business plan. Compliance officers reject vague answers.
7. Establishment card, then visa quota, then visas. In that order.

Watch out
Signing a 12-month commercial lease before your licence is approved leaves you exposed if the activity gets rejected. Always make the tenancy conditional on licence issuance, or use a flexi-desk for year one.

Shareholders, directors, and the UBO file nobody reads

Under Cabinet Decision No. 109 of 2023, every UAE company (except those in financial free zones with their own regimes) must maintain a Ultimate Beneficial Owner register and file it with the licensing authority.[5] Anyone holding 25% or more, directly or indirectly, counts. Penalties for non-filing start at AED 50,000.

A mainland LLC needs at least one director, no nationality restriction post-2021. A free zone FZ-LLC follows the relevant free zone's rules — DMCC and IFZA require at least one director and one shareholder (can be the same person). DIFC companies need a registered office in DIFC and, for Prescribed Companies, a Corporate Services Provider.

If you're using a corporate shareholder, expect every layer above to be document-checked: certificate of incorporation, good standing, board resolution, passport copies of directors, all attested up to UAE Embassy level if foreign. Attestation alone runs three to six weeks and AED 2,000-5,000 per document.

Banking, tax registration, and the things that bite in month three

The licence is the beginning, not the end. Here's what catches people:

Corporate tax registration is mandatory within set deadlines tied to your licence issuance month — miss it and the FTA imposes AED 10,000 fines.[4] Free zone companies must register even if claiming the 0% rate.

Economic Substance rules were repealed for periods from 2023 onward, but if you operated before that, you may still have backfiling obligations.

Accounting records must be kept for at least seven years under the Commercial Companies Law and tax legislation. The FTA does spot audits. Cloud accounting from day one is non-negotiable, frankly.

WPS — the Wage Protection System run by MOHRE — applies to mainland employees and most free zones. Salaries flow through approved channels or you get blocked from issuing new visas.

Renewal. Licences are annual. Late renewal triggers AED 250 per month from DET plus immigration fines on every active visa. A AED 15,000 licence becomes a AED 22,000 problem fast.

Key dates
- Trade licence: renew before expiry, grace period 30 days then fines
- Corporate tax registration: within the FTA's deadline for your licence-issue month
- UBO updates: within 15 days of any change
- VAT returns: quarterly, due 28 days after period end

Which route should you actually take?

Three rough archetypes:

You're consulting to clients abroad, want one or two visas, watching cashflow. IFZA or Meydan free zone, single-shareholder FZ-LLC, flexi-desk. All-in year one around AED 20,000-25,000 with one visa.

You're selling to UAE consumers, opening a shop or restaurant, hiring locally. Mainland LLC under DET. Budget AED 40,000-60,000 year one plus tenancy. Worth it for direct market access.

You're moving family wealth, running a fund, or building a regulated fintech. DIFC. The Prescribed Company route for holdings is genuinely excellent; the regulated routes are expensive but defensible to international counterparties.

For more on the underlying corporate law framework, see our guides under /categories/business.

The mistake I see weekly: choosing the cheapest free zone because a consultant offered a deal, then needing to add a mainland branch six months later at triple the planned cost. Spend an hour with a lawyer before you spend a dirham on setup.

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Citations

[1] Federal Decree-Law No. 32 of 2021 on Commercial Companies, replacing Federal Law No. 2 of 2015. [2] DIFC Companies Law, DIFC Law No. 5 of 2018, and DIFC Companies Regulations. [3] Federal Decree-Law No. 8 of 2017 on Value Added Tax, Art. 13. [4] Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses; FTA Decision No. 3 of 2024 on registration timelines. [5] Cabinet Decision No. 109 of 2023 regulating the Real Beneficiary Procedures.

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