Introduction: Why the UAE Remains a Business Hub in 2025
Imagine waking up to year-round sunshine, zero income tax, and access to one of the most dynamic economies in the Middle East. That’s the UAE for entrepreneurs—a blend of lifestyle and limitless opportunity.
With initiatives by the government such as the National Entrepreneurship Agenda 2031 and easy processes through platforms such as Basher and Invest in Dubai, opening a business here has never been easier.
Whether you’re a homegrown dreamer or driven expat, this guide will take you step-by-step through how to set up and register your business in the UAE, detailing every important fact—from selecting the proper jurisdiction to understanding license types and start-up fees.
Step 1: Select the Proper Business Jurisdiction
Your UAE business location dictates your operations, rights of ownership, taxation, and even visa limits. You’ll select from:
Mainland, Free Zone, or Offshore
Mainland:
- Complete access to UAE markets and government contracts.
- 100% investment abroad is now permitted in the seniority of industries.
- Controlled by the Department of Economic Development (DED) per emirate.
- Suitable for service-oriented firms such as consultancies or retail.
Free Zone:
- Perfect for trading, IT, logistics, media, and start-ups.
- 100% ownership, no import/export charges, and tax benefits.
- Has its own independent Free Zone Authorities.
- Restricted to Free Zone or foreign trade business—can’t sell directly to the local market without a distributor.
Learn more: Free zone vs Mainland Business Setup in UAE
Offshore:
- Mainly used for holding companies, international trading, or IP holding.
- No physical presence or business operations in the UAE.
Pro tip: If you’re planning to do B2B or work with UAE government clients, go for a Mainland license. For tech startups and freelancers, a Free Zone is more cost-effective and flexible.
Step 2: Decide on Your Business Activity
The UAE government provides more than 2,000 licensed business activities—from management consultancy and e-commerce to construction and food delivery.
You need to align your selected activity with an approved list released by the DED or respective Free Zone Authority. Combining unconnected activities (e.g., consulting + general trading) can make licensing harder.
Typical Business Categories:
- Professional (consultancy, design, digital marketing)
- Commercial (trading, retail, logistics)
- Industrial (manufacturing, production)
Step 3: Select a Legal Structure
Legal structure varies depending on your activity, ownership model, and number of shareholders. Popular options are:
- Sole Proprietorship
- Limited Liability Company (LLC) – perfect for most businesses
- Civil Company – for professional services
- Branch of Foreign Company
- Freelance Permit – ideal for solo professionals
For expats who wish to establish themselves in Free Zones, the Free Zone Establishment (FZE) or Free Zone Company (FZC) are favored.
Step 4: Register Your Trade Name
Your trade name must be consistent with your business activity and be approved by the competent authority.
Key Rules:
- No offensive or religious words.
- No abbreviations of personal names (e.g., “A.S. Consultancy” is not permitted).
- You may use Arabic or English.
- Registration charges are between AED 620 and AED 2,000, depending on the emirate and other branding options (e.g., foreign names, group names, etc.).
Step 5: Obtain a Business License
There are four primary types of licenses in the UAE:
License Types:
- Commercial License – For trading and commercial purposes.
- Professional License – For service professionals and freelancers.
- Industrial License – For industrial and manufacturing operations.
- Tourism License – For tour operators, travel agencies, etc.
- Discover in depth: Business Licenses in the UAE
Step 6: Select an Office Space
Whether a Flexi-desk, shared offices, or actual office, UAE laws typically demand a business address registered.
Choices:
- Mainland: Need to rent an actual office.
- Free Zones: Provide Flexi-desks, shared offices, or individual offices.
- Virtual Offices: On offer in some Free Zones for freelancers and individual entrepreneurs.
Tip: Certain Free Zones such as IFZA, SHAMS, and RAKEZ have startup packages with Flexi-desks and 1–3 visa quotas available.
Step 7: Submit Documents and Pay Fees
- You’ll need to prepare and submit:
- Passport copies of shareholders
- Emirates ID (if applicable)
- Business plan (for certain activities)
- NOC (No Objection Certificate) if you’re a UAE resident on a work visa
- Lease agreement (Ejari for mainland)
- MOA (Memorandum of Association) for LLCs
- License issuance typically takes 3–7 working days, depending on approvals.
Step 8: Open a UAE Business Bank Account
Opening a business bank account might be the most challenging step, particularly for startups or freelancers who have no financial record.
Documents Needed:
- Trade license
- MOA
- Shareholder documents
- Office lease
- Business plan
- KYC compliance documents
Favourite banks for business accounts:
- Emirates NBD
- Mashreq NeoBiz (excellent for SMEs)
- RAKBANK
- ADCB
- FAB
Step 9: Apply for Visas (Yourself and Employees)
After your license is received, you can apply for residency visas attached to your business.
Typical visa quotas:
- Mainland: Visa quota based on your office space (1 visa per 80 sq. ft.).
Every visa process involves:
- Entry permit
- Emirates ID application
- Medical fitness test
- Residency stamping
Step 10: Register with Government Portals
- Based on your business type and emirate, register with:
- Federal Tax Authority (FTA) – If you meet the VAT threshold (AED 375,000+ revenue per annum)
- Wage Protection System (WPS) – If you’re employing staff
- Chamber of Commerce
- Online platforms such as Basher, Invest in Dubai, or TAMM Abu Dhabi for digital establishment
Fees of Starting a Business in the UAE in 2025
While prices differ by location, here’s a rough estimate for a startup:
Item Estimated Cost (AED)
Trade Name & Initial Approval 1,000 – 2,500
License Issuance 7,500 – 15,000
Office Space / Flexi Desk 5,000 – 20,000
Visa (Per Person) 3,000 – 6,000
MOA & Legal Fees 2,000 – 5,000
For Free Zone startups, packages including everything start from AED 12,000 per year.
Roots for Expats Starting a Business in the UAE
- Do your homework: Each emirate and Free Zone has unique rules. Consult professionals.
- Understand cultural nuances: Business is often relationship-based.
- Hire a PRO: Paperwork can be tedious—professional services save time.
- Consider a co-founder: Especially if you’re new to the region.
- Plan for renewal costs: Licenses and visas need annual renewals.
Advantages And Disadvantages off set up a Business in the UAE
Pros:
- 0% personal income tax
- Strategic geographical position between Asia, Europe, and Africa
- Latest infrastructure and connectivity
- Business-friendly laws
- Access to various markets
Cons:
- Exorbitant initial set-up and renewal fees
- Limited access to finance for startups
- Sophisticated paperwork in the absence of proper counsel
Freezone vs Mainland Business Setup in the UAE: Which Is Suitable for You in 2025?
Considering opening a business in the UAE but stuck between Freezone and Mainland? You’re not alone. It’s one of the most frequently asked questions small business owners have—and for good reason. Where you incorporate your business will determine everything from whom you can sell to, to how much equity you own, and even your overall overhead costs.
In this section, we’ll break down the advantages, disadvantages, and the main differences between Freezone and Mainland setups—so you can make an informed choice that suits your business objectives in 2025.
What is a Freezone Company?
Free Zones (or Free Trade Zones) are specifically designed places within the UAE that provide business-friendly regulations and incentives.
- DMCC (Dubai Multi Commodities Centre)
- IFZA (International Free Zone Authority)
- RAKEZ (Ras Al Khaimah Economic Zone)
- SHAMS (Sharjah Media City)
- DIFC (Dubai International Financial Centre)
All Free Zones have their own jurisdiction and provide industry-specific advantages (e.g., media, logistics, tech, finance).
What is a Mainland Company?
Mainland business facilitates full access to the UAE marketplace, both individual and government clients.
Due to UAE reforms, 100% foreign ownership is permitted in most sectors (as of 2023), and Mainland is becoming even more appealing to foreign investors.
Free zone Pros & Cons
Pros:
- 100% ownership and repatriation of profits
- Sector-specific zones with specialized assistance
- Lower setup fee and minimal office demands
- Rapid registration process
- Tax relief (0% corporate tax for the majority of Free zone entities up to AED 375,000 profit)
Cons:
- Limited visa allocations
- No qualification for local government contracts
Mainland Pros & Cons
Pros:
Full access to UAE local market
Eligibility for tenders and government projects
No limit on visa quotas (dependent on office size)
Ability to open retail stores, cafes, clinics, etc.
Cons:
- Increased cost due to obligatory office space and compliance
- Slower registration (may include external approvals)
- Annual audits usually necessary
Types of Business Licenses in the UAE: Ultimate Guide for 2025
One of the first—and most significant—things to do is decide on the appropriate business license. It defines what you can legally do, what you need to get approval for, and where you are allowed to operate.
With more than 2,000 approved business activities in more than one jurisdiction, figuring out license types can be daunting. This guide makes it all straightforward—freelancing, trading, manufacturing, or providing services.
Why Your License Type Is Important
Selecting the inappropriate license can:
- Hold up your company registration
- Keep you from lawfully operating
- Result in fines or conformity issues
- Your license must match perfectly with your business activity, jurisdiction (Mainland or Free zone), and legal formation.
The 4 UAE Main Business License Types
1. Commercial License
What it is used for:
- Trading (import/export)
- Retail and wholesale
- E-commerce
- General trading
- Who should obtain it:
- Companies selling products
- Online stores
- Car dealerships
- Construction material traders
Example: A company that generally trades in importing electronics and selling them locally would require a commercial license.
Bonus Tip: In Dubai, a commercial license can be combined with a “general trading” activity including various product categories.
2. Professional License
What it includes:
- Consultancy (management, IT, HR, legal)
- Freelance services (graphic design, writing, web development)
- Education and training
- Healthcare and wellness
Who needs it:
- Service providers
- Individual professionals
- Agencies and consultants
Example: An individual UX designer or a marketing agency would need a professional license.
If you’re in Dubai Mainland, you can register as a Civil Company with a professional license.
3. Industrial License
What it includes:
- Manufacturing
- Fabrication
- Packaging
- Production-based businesses
Who needs it:
- Factories and production plants
- Food and beverage manufacturers
- Textile or furniture manufacturers
Illustration: A water bottled factory or furniture manufacturing factory would need an industrial license.
Note: This license usually involves approvals from municipalities, environmental authorities, and industrial authorities.
4. Tourism License
What it covers:
- Travel agencies
- Tour operators
- Hospitality management
- Event and leisure companies
Who should obtain it:
- Inbound and outbound tour operators
- Hotel and resort managers
- Desert safari or yacht charter companies
Example: A travel company offering customized desert experiences or visa services would require a tourism license from the Department of Tourism and Commerce Marketing (DTCM).
Additional or Hybrid License Types (2025 Updates)
As of 2025, some jurisdictions have introduced hybrid or specialized licenses, including:
Freelance License
- Issued by Freezones (like RAKEZ, SHAMS, and Abu Dhabi’s Media Zone).
- Ideal for solo professionals.
E-Commerce License
- Tailored for online businesses.
- Offered in Free Zones like Dubai CommerCity, DIFC, or SHAMS.
- May require integration with UAE-based payment gateways and logistics platforms.
Home Business License
- Offered by some emirates (like Abu Dhabi’s License).
- For residents running small-scale businesses from home (e.g., cake baking, tailoring).
How to Choose the Right License Type
Ask yourself:
- What is the product/service that I will be offering?
- Do I intend to sell locally, online, or abroad?
- Do I require physical space, or do I work remotely?
- Am I working alone, or with staff?
Here’s a handy cheat sheet:
Business Type Recommended License
Import/export or trading Commercial License
Digital marketing agency Professional License
Bakery/factory Industrial License
Tour and visa services Tourism License
Freelance copywriting Freelance License
Online store (UAE delivery) E-Commerce License
License Fees in 2025
License fees differ by:
- Emirate (Dubai, Abu Dhabi, Sharjah, etc.)
- Jurisdiction (Mainland vs Freezone)
- Activity (some require specific approvals)
Rough Estimates:
- Professional License: AED 7,500 – AED 15,000
- Commercial License: AED 8,000 – AED 20,000
- Industrial License: AED 15,000 – AED 35,000
- Tourism License: AED 10,000 – AED 30,000
- Freelance Permit: AED 6,000 – AED 9,000 (Freezone)
License Add-ons: Activities and Approvals
You may group several activities under a single license if they belong to the same category.
For instance:
- A “Digital Marketing & Design” company can be run under a single professional license.
- But “Consulting” + “Trading” would necessitate two licenses or dual licensing (which is now permitted in some Free Zones).
Some activities require external approvals:
- Medical: Dubai Health Authority (DHA)
- Food: Municipality + Food Safety Dept.
- Legal: Ministry of Justice
- Education: KHDA / ADEK
Conclusion: Making Your UAE Business Dream a Reality
Launching a business in the UAE in 2025 is not only a wise business decision—it’s an opportunity to create something valuable in one of the globe’s most entrepreneurial settings.
With 100% foreign ownership becoming commonplace, first-rate infrastructure, and a government actively supporting innovation, the UAE is well on its way to becoming a global startup hub.
But keep in mind—success begins with structure. Making Freezone or Mainland a choice, deciding on the appropriate license type, planning your startup budget, and registering on the proper government websites are all key choices that determine your trajectory.
Whether you’re a remote working expat consultant, a trader looking to target the GCC market, or a tech entrepreneur seeking to scale globally, the UAE provides you with the legal context, financial benefits, and geographic location to make it real.
So go ahead and take the first step. Research your choices, consult with the authorities, and create a foundation that will endure. The journey that follows may not be simple—but with the proper setup, it will definitely be worth it.
Final Thoughts
The selection of the right license isn’t merely a checkbox—it’s the law that holds your whole business together. A misfit can hold up your operations or even expose you to fines.
Whether you’re creating an e-commerce store, starting a health brand, or providing B2B consulting, there’s a license designed for you in the UAE.
