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Company Formation in the UAE in 2024

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Company formation in the UAE involves selecting a jurisdiction, business activity, legal structure, and trade name, obtaining government approvals, and registering with local authorities.

The UAE’s economy has developed greatly over a very short amount of time, providing opportunities for expanding businesses and new entrepreneurs alike.

The UAE is an ideal hub for operations in the Middle East, North Africa, and South Asia.

Overview of the UAE

If you have chosen to do business in the United Arab Emirates (UAE), this article will give you the tools and information to make the right decisions towards company creation in the UAE.

As the popularity of having a business setup in Dubai grows, you may wonder what company formation in the broader UAE region might be like. While this article is a guide specifically for company formation, we also made a start-to-finish guide to setting up your business in the UAE if that suits you better.


The UAE's transition from an oil-dependent economy to a diversified one presents a myriad of opportunities for entrepreneurs. Non-oil sectors used to be less than 10% of the UAE’s GDP, but now they make up over 70%, crossing over to AED 2 trillion for the first time in history.

This diversification has been fueled by strategic initiatives, fostering sectors like finance, trade, and tourism, which now serve as pillars of the UAE's economy.

Business and Finance

The UAE ranks 15th globally and 1st in the region on Kearney's Foreign Direct Investment Confidence Index. For comparison, Hong Kong ranks 12th, Singapore ranks 16th

The UAE’s credit was also rated Aa2 by Moody’s Investors Service, which is high quality and very low credit risk. This rating shows that the United Arab Emirates is financially stable and a relatively safe place for people to invest their money.

Why Company Formation in the UAE?

Company formation or incorporation in the UAE is a compelling proposition for many kinds of entrepreneurs. Whether you are starting your business for the first time, you have been in business for a while but are incorporating for the first time, or are expanding your global presence, the UAE boasts many advantages.

Access to the Middle East, North Africa, and South Asia

Not only is half the world’s population accessible within an 8-hour flight, but strong cultural, economic, and political ties also link this region together. 

For instance, the Gulf Cooperation Council (GCC) endeavors towards the advanced integration of the region’s military, economic, and political coordination. Most notably for business people, GCC members have unified a number of their tax policies

📌 Did You Know? The UAE is home to more than 200 nationalities, making it one of the most cosmopolitan countries in the world. Nearly 90% of the population are expatriates who mostly moved to the UAE for work. 

Variety of Legal Systems

The UAE offers a unique blend of legal systems, including mainland, free zone, and offshore jurisdictions, each with its own set of rules and benefits. 

While the UAE’s legal system is a mix of Western law and Islamic Sharia, parties can generally choose foreign laws for contracts with few exceptions. Legal disagreements can be submitted to courts or arbitration centers in or outside of the UAE, thanks to treaties that facilitate the enforcement of foreign judgments.

The diversity and flexibility in legal frameworks offer businesses flexibility in choosing the setup that best aligns with their operational needs and strategic goals. 

Low Tax Regime

The UAE corporate tax rate stands at a flat 9%, but it could be reduced to 0% for income less than AED 375,000 or if your business is registered in a tax-free zone, mainly in the Free Zones. While it is popular to have one’s business setup in Dubai, the difference in tax rates is the main reason it is recommended to explore other jurisdictions to do business in the UAE. 

🔍 Wondering where else is right for you? Company formation in Hong Kong is also highly popular. 

Company Formation in the UAE Process


The process of company setup in Dubai involves various steps with nuances to each, but we have summarized them as follows:

  1. Choose Your Business Jurisdiction
  2. Choose Your Business Activity
  3. Choose Your Legal Structure
  4. Choose Your Trade Name
  5. Obtain Initial Government Approval
  6. Complete and Sign a Memorandum of Association or Local Service Agent Agreement
  7. Determine Your Business Location
  8. Additional Government Approvals
  9. Pay Fees and Collect License
  10. Register With the Chamber of Commerce

🚀 Industry Insight: Before you start your business in UAE, you should check out our guide on 12 things to know before starting a business in 2024.

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In the dynamic landscape of global business, the UAE has been steadily making a name for itself alongside established hubs like Hong Kong or Singapore. Entrepreneurs stepping into the UAE’s vibrant market must navigate with cultural intelligence, leverage technological advancements, and embrace the agility needed to thrive.

Bertrand Theaud
Founder, Statrys


What do you recommend business people who have never done business abroad to do in order to familiarize themselves with global business from a hub like the UAE?


First, invest time in understanding the global economic landscape. This means staying informed about international market trends, trade regulations, and economic policies that could impact your business.

Next, networking is crucial. Attend international business conferences, seminars, and webinars where you can connect with like-minded professionals. These events are not only learning opportunities but also platforms to exchange ideas and experiences. Platforms like LinkedIn can also be instrumental in building your global network. In the UAE, your local chamber of commerce, among other organizations, will certainly provide networking opportunities.

Can you share a specific example of a challenge that you or someone you worked with faced when setting up a company in the UAE and how you helped them overcome it?


How do you navigate the complexities of setting up a business in a country with a blend of Western and Islamic legal systems?


Detailed Company Formation in the UAE Process

Now, let us look at the process of setting up your business in the UAE in more detail. 

1. Choose Your Business Jurisdiction: Mainland vs Free Zones*

*Or offshore company.

The reason we do not focus on offshore companies is that they are not allowed to operate in the UAE and are merely used as a holding company or an intermediary for doing international business.

Mainland Free Zones
Requires 51% local ownership, but you may control the business fully Does not require a local sponsor for full foreign ownership
Needs physical office address registered with Ejari (UAE real estate registration system)  Virtual or physical business setting tailored to its needs.
No visa restrictions, but mandatory minimum office space scales with the number of visas approved Maximum of 6-7 visas for your employees
Financial audit mandatory No mandatory financial audit

External approvals from UAE authorities are required. Approval required from Freezone regulating body (independent or government)

Mainland Companies

Mainland companies are registered with the UAE's Department of Economic Development (DED) in any of the seven main jurisdictions called Emirates. These companies can operate in any of the United Arab Emirates free zones or emirates, but they must adhere to the regulations of each zone.

Mainland companies in the UAE offer visa flexibility without strict limits, provided office space can accommodate. 

However, they typically require local sponsorship, with a UAE national owning at least 51% of shares, except for some exceptions allowing full foreign ownership. Full foreign control of the company is still possible with the appropriate legal agreements.

A physical office in the UAE is mandatory, and financial audits are required.

Free Zone Companies

Free zones are designated economic areas offering tax breaks and more lax regulations. Each free zone is designed around one or more business industry categories and only offers licenses to companies within those categories. They are also typically very economically productive. For example, Dubai's free trade zones achieved $118 billion in trade in 2017. The Jebel Ali Free Zone accounts for over 31% of foreign direct investment in the UAE.

However, they're generally restricted to operating within the free zone or outside the UAE, requiring a local service agent for mainland operations. 

Visa issuance may be limited, up to 7 per company. Financial audits are not mandatory.

Choose a Mainland Company If:

  • You want a large operation with many employees.
  • You want a physical presence in the UAE.
  • You want to work with local agents who will be required to have shares in your company.

Choose a Free Zone Company If:

  • You do not seek to hire many employees.
  • You need the option for a virtual presence / online presence in the UAE.
  • You seek 100% ownership of the company.
  • You prioritize lowest possible taxes (as low as 0%).

While choosing your major jurisdiction is the first major decision, there are still numerous nuances and differences in each of the free zones and emirates, reflecting the diverse business landscape of the United Arab Emirates. 

It is recommended to find a local partner in the UAE or a consultant to assist with the details. 

💡 Tip: To benefit from low-tax jurisdictions, company formation is not the only way. See our top 11 countries list for offshore banking, and see where the UAE ranks. 

2. Choose Your Business Type:

Select the business activity you'd like to pursue, and then choose from one of the following six types of licenses: Industrial, Commercial, Professional, Tourist, Agricultural, or Occupational. 

One license may engage in more than one type of business activity. There are over 2,000 types of business activities in the UAE, and each jurisdiction lists the type of business activity you may be engaged in. While the sheer amount of options can seem overwhelming, this aspect of the setup in Dubai, among other popular Emirates, is what entrepreneurs appreciate – the availability of diverse business structures to choose from. 

For example, if you remember the Jebel Ali Free Zone mentioned earlier, they allow activities ranging from advertising requisites trading (for example, selling billboards) to seeds trading.

💡Tip: General trading companies are under heightened scrutiny because of their associations with illegal activities, particularly money laundering. Unless needed, it is advised to opt for a more specialized business activity. 

3. Choose Your Legal Structure:

The UAE offers a variety of legal structures to accommodate the diverse needs of its business community. 

These include:

  • General Partnerships
  • Limited Partnerships
  • Limited Liability Companies (LLC)
  • Public and Private Joint Stock Companies
  • Civil Companies
  • Branches of Local, GCC, and Foreign Companies
  • Free Zone Company Branches
  • Sole Establishments
  • Holding Companies

4. Choose the Trade Name of Your Business:

In the UAE, trade names must adhere to specific guidelines: they should not include any offensive language, religious references, or names of governing bodies. The name must also not have been previously registered.

5. Solicit Initial Approval From Government Authorities:

Once you have all this information, you can submit the initial approval online with the Department of Economic Development or the respective Free Zone authority. This is merely approval to continue your application. This step helps save you time in case your application is going to be rejected based on information you can readily provide now.

6. Complete and Sign a Memorandum of Association or Local Service Agent Agreement:

A Memorandum of Association (MoA) serves as the foundational document of a company, outlining critical information such as the company's name, objectives, registered office address, and shareholder details. It acts as a charter that governs the company's operations and interactions.

On the other hand, a Local Service Agent Agreement (LSA) is an arrangement tailored for companies with foreign ownership in the UAE. This agreement specifies the roles and responsibilities of a local partner, primarily in facilitating communications with governmental bodies.

The following entities are required to have an MoA:

  • Private Joint Stock Company
  • Public Joint Stock Company
  • Limited Partnership
  • Limited Liability Company

It's mandatory that these documents are prepared and authenticated by legal entities within the UAE, such entities are law firms, courts, and public notaries.

7. Determine Your Business Location:

Apart from selecting the jurisdiction at large, you will need to select the office location at a physical address that meets the requirements outlined by your jurisdiction’s governing authority. 

On the mainland, that will almost always be the Department of Economic Development and other local authorities. You will also need to provide proof of a rental agreement if you do not own the office space.

8. Additional Government Approvals:

Depending on your business activities, you may need to obtain additional approvals from relevant government entities. For instance, the Ministry of the Interior will need to issue authorization for operations associated with general transportation, say if your business were related to automobiles, such as driving schools, auto rentals, or a car dealership.

8. Submit Required Documents:

This will include receipt of initial approval and copies of all previously submitted documents—approvals from other government entities and so on. 

9. Pay fees and collect your license

After following these steps and paying all related fees, you should be able to collect your business license at a Department of Economic Development center or online for an electronic copy. 

10. Register your company with the local Chamber of Commerce and Industry

You will need to prepare the necessary documents, including copies of the trade license, passports of partners, and MoA, then pay the annual fee and finally receive the certificate of membership. You must register with the Chamber of Commerce and Industry in the same jurisdiction where your company was incorporated.

You will typically have access to market research, mentoring programs, and general networking events through the Chamber of Commerce and Industry.

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Can I convert my free zone company to a mainland company later?

Not all companies are eligible to transfer their trade license from a free zone to a mainland jurisdiction. You can check your eligibility with your free zone authority.

If your company is eligible, you will be able to go through the process, including obtaining additional approvals and potentially adjusting your business structure. You will also be required to pay a fee.

Is it possible to own real estate in the UAE as a foreign business owner?


What sectors are currently thriving in the UAE's economy?


Can I operate my business in multiple Emirates?


How long does it take to incorporate a company in the UAE?


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