Complete Legal and Administrative Guide for New Businesses in Dubai (2025)

Dubai represents more than a city; it embodies the future of international business. Every year, thousands of entrepreneurs and investors come to Dubai to start companies in different industries. With a supportive government, modern infrastructure, and a tax-friendly environment, starting a business in Dubai in 2025 is a smart move.

However, there are several legal and administrative steps to set up a company in UAE. If you're wondering how to legally start a business in Dubai in 2025, this guide will help you understand everything from the type of license to the documents required to start a business in Dubai.

Why Choose Dubai for Business in 2025?

Dubai is a safe, stable, and fast-growing economy. The city offers:

• No personal income tax
• Full foreign ownership in most sectors
• Quick company formation
• Different zones for business establishment (Mainland, Free Zones, Offshore)
• Easy access to global markets

Whether you're launching a startup, opening a branch, or starting an online store, Dubai gives you the tools and environment to succeed.

 

Step 1: Decide Your Business Activity

Your business activity will decide the type of Dubai business license you need. Some common activities include:

• Trading goods
• Providing professional services (consulting, marketing, etc.)
• E-commerce
• Manufacturing
• Real estate
• Education

Each activity is regulated by specific authorities. For example, if you are opening a restaurant, you may also need approvals from the Dubai Municipality.

Step 2: Choose a Jurisdiction

In the UAE, businesses can be set up in three different zones:

1. Mainland: Ideal for businesses targeting the local UAE market, mainland companies are licensed by the DED and can operate without geographic restrictions within the country.
2. Free Zone: These zones enable foreign entrepreneurs to fully own their companies, enjoy simplified incorporation, and benefit from tax exemptions. But you are limited to operating within the free zone or internationally unless you appoint a local distributor.
3. Offshore: Best suited for international trade or holding companies. You cannot trade within the UAE.

For many, DED business setup is ideal if they want to serve the local market.

Step 3: Choose a Legal Structure

Your business structure affects your ownership, operations, and liability. Some common legal structures are:

• Sole Proprietorship: Owned by one person. Suitable for professionals and freelancers.
• Limited Liability Company (LLC): Most popular. Allows multiple partners.
• Civil Company: For professionals like doctors, lawyers, and engineers.
• Free Zone Company (FZC/FZE): Formed in free zones. Allows 100% foreign ownership.
• Branch of a Foreign Company: Useful for expanding into Dubai without creating a new legal entity.

Thanks to new rules in 2025, most businesses can now be 100% foreign-owned, even in the mainland.

Step 4: Reserve a Trade Name

Your business needs a legal name. Follow these guidelines:

• Name must match your business activity
• No offensive, religious, or political terms
• No abbreviations or global brand names (unless you own them)

You can reserve your trade name online via the DED website or your chosen free zone authority.

Step 5: Get Initial Approval

Before proceeding, you must apply for an Initial Approval Certificate. This confirms that the UAE government has no objection to your proposed business.

To apply, you need:

• Passport copies of all shareholders
• Chosen business activity
• Trade name reservation

This certificate is usually valid for six months and is non-renewable.

Step 6: Draft the Legal Documents

The list of required documents depends on the business structure and the jurisdiction—Mainland, Free Zone, or Offshore—where you plan to operate:

• Memorandum of Association (MoA): A legal document that details shareholders’ ownership percentages and their respective roles within the business.
• Articles of Association (AoA): Internal rules and policies (sometimes required).
• Local Service Agent (LSA) Agreement: Required for some professional licenses (if no Emirati partner is involved).

These documents must be signed by all parties and often notarized in Dubai.

Step 7: Find a Business Location

You cannot complete your license without a business address. You must rent or lease:

• An office
• A shared desk (in free zones)
• Virtual office services (allowed in some free zones)

For mainland businesses, the tenancy agreement must be registered via the Ejari system. Additionally, your chosen business activity must be authorized at the selected location.

Step 8: Apply for the Business License

Once you’ve completed all the above steps, you can officially apply for your Dubai business license. This includes submitting:

• Trade name certificate
• Initial approval
• MoA/AoA/LSA documents
• Ejari contract
• Passport copies

The type of license depends on your activity:

• Commercial License – For trading
• Professional License – For services
• Industrial License – For manufacturing
• Tourism License – For travel-related businesses

The application is submitted either to DED or your free zone authority.

Step 9: Submit All Required Documents

Below is a list of essential paperwork needed to launch your business in Dubai:

• Passport copies of shareholders/owners
• Visa and Emirates ID (if available)
• Trade name certificate
• Initial approval
• Signed MoA and LSA (if needed)
• Ejari (rental agreement)
• Passport-size photographs
• NOC (if applicable)
• Business plan (optional but recommended)

Incomplete paperwork can delay your license, so double-check all entries.

Step 10: Obtain Special Approvals (If Required)

Some businesses require approvals from additional government bodies:

• Dubai Municipality: For food, salons, and cleaning companies
• Dubai Health Authority (DHA): For clinics and pharmacies
• Knowledge and Human Development Authority (KHDA): Governs licensing for schools and training institutions.
• Telecommunications Regulatory Authority (TRA): For tech and communication companies

Obtaining these approvals might require additional time, so it’s important to plan ahead.

Step 11: Register for VAT (If Needed)

Any business generating over AED 375,000 annually must comply with VAT registration under the Federal Tax Authority.

• Valid business license
• Owner’s Emirates ID
• MoA and trade documents
• Utility bill or lease agreement
• Estimated revenue details

Once registered, you must issue tax invoices and file VAT returns regularly.

Step 12: Open a Business Bank Account

Every legal business in Dubai must have a corporate bank account. To open one, you need:

• Trade license
• Passport and visa copies
• MoA and share certificate
• Proof of office address
• Initial deposit (varies by bank)

Popular banks in Dubai include Emirates NBD, Mashreq, ADCB, and international banks like HSBC and Standard Chartered.

Step 13: Hire Staff and Apply for Visas

After getting your license, you can apply for:

• Investor/partner visa
• Employee visas
• Dependent visas (for family)

The number of visas you can apply for depends on your office size and business activity. Registration with the Ministry of Human Resources and Emiratisation (MOHRE) is required, along with securing a labor card.

Step 14: Launch and Market Your Business

Once all necessary legal steps have been completed, you may start running your business officially. Make sure to:

• Build a professional website
• Create business social media profiles
• Get listed on Google Business
• Start digital marketing and SEO
• Build relationships with local clients

You can also attend networking events and trade shows in Dubai to find partners and customers.

What It Costs to Launch a Business in Dubai in 2025

The cost of starting a company depends on:

• Business license type
• Jurisdiction (Mainland or Free Zone)
• Office rent
• Approvals and visa charges

On average, company setup in a Free Zone starts from AED 12,000–15,000, while Mainland setup starts around AED 20,000 and goes up depending on your activity.

Common Mistakes to Avoid

• Choosing the wrong business activity
• Not checking name availability
• Submitting incomplete documents
• Ignoring special approvals
• Opening a bank account without expert help

To avoid these issues, it’s best to take help from business setup consultants like Irha Businessmen Services, who handle everything from start to finish.

Conclusion

Dubai is a land of opportunity, and starting a business in Dubai in 2025 is easier than ever — if you follow the right steps. From choosing your business activity to getting the right Dubai business license, every step must be done carefully.

Let’s recap the key steps:

• Choose your business activity and jurisdiction
• Reserve a trade name
• Get initial approval
• Prepare legal documents
• Secure an office space
• Apply for a license
• Submit all required documents
• Complete VAT registration and set up a business bank account
• Apply for visas and start your operations

With the right support, your company formation in UAE can be smooth and fast.

If you're unsure where to start, let Irha Businessmen Services help you turn your business idea into a reality — legally and confidently.