Establishing a company in Dubai and other key regions of the UAE like Sharjah is a lot easier for foreigners now than it was a decade ago. It’s undeniable that Dubai is a very attractive place for foreigners looking to establish a company, what with its strong infrastructure and helpful policies that support entrepreneurs on the path to success. Beyond just the ability to establish a company in Dubai, non-UAE residents/foreigners also have the ability to fully own their company in the UAE without any restrictions at all.
Being able to own a company in the UAE without restrictions means that non-UAE residents are now more motivated than ever to establish their setup in the UAE. It also means there’s streamlined processes that can help with business setup. Non-UAE residents have the option to establish either free zone or mainland companies, and if they choose the right setup that caters to their specific needs, they can even manage and operate their business remotely.
This guide is here to outline essential information on how foreigners can start business in Dubai, along with everything non-residents need when it comes to legal eligibility and options, costs, visas, and typical hurdles that new entrepreneurs in the UAE face during business setup.
So, here’s a step-by-step look at how to get your Dubai business license, along with everything else you’ll need during your initial business venture in the UAE.
Can Foreigners Start a Business in Dubai?
Yes. Dubai and Sharjah in the UAE are perfect regions for starting a business in Dubai as a foreigner, owning it completely, and driving it to success. Regardless of nationality, the UAE has strong policies that encourage entrepreneurs to explore a wide range of business activities, as long as they are compliant with country regulations.
If you set up in a free zone, things get easier for you. You can set up for most commercial and professional activities without a local sponsor, ensuring that you get full control over the business, including decisions and profit distribution. Simply put, your business is in your hands.
Foreigners are allowed to businesses either on the mainland or in free zone jurisdictions. In both arenas, rules of ownership can differ, and licensing authorities will make sure you follow all the right guidelines for registration and compliance.
If you’re wondering how foreign nationals can start businesses in Dubai, the legal guidelines are more open, consistent, and encouraging than ever before.
Mainland vs Free Zone – Which Is Better for Foreigners?
Selecting either the mainland or a free zone is absolutely the most critical choice to make as a foreign national starting a business in Dubai. Each option gives many unique benefits depending on the business type, target market, and long-term objectives. But there is definitely one setup that’s more right for you.
Operating with government entities, local businesses, and consumers across the various emirates is unrestricted under a mainland license. So, businesses that absolutely need physical locations, such as offices and retail stores may find the mainland structure more suitable. However, this type of setup often comes with higher setup and running costs.
On the flip side, businesses in free zones tend to be more cost-effective. They offer very straightforward regulatory requirements, quicker business licensing procedures, and flexible office arrangements.
Free zone establishments are generally very common among startups, consultancies, online retail ventures, and foreign entrepreneurs who do not require a physical retail operation. This makes free zones an easier and lower-risk entry point for many first-time business owners. It also gives you the room to grow and an ecosystem that grows with you.
When considering ownership, both mainland and free zone structures now permit total foreign ownership for the majority of activities. Cost structures and growth potential still differ though. Setting up on the mainland will almost always involve higher commitments for office rent and compliance obligations, whereas free zones provide packages that bundle licensing, visa quotas, and support services.
Remember, choosing the wrong jurisdiction early on can create limitations later, such as restrictions on where you can trade or the need for costly restructuring. If you choose the wrong structure at the start, it can stunt your growth as a company that’s trying to grow and thrive in the MENA region.
For non-UAE entrepreneurs looking into starting a business in Dubai as a foreigner, the decision should be guided by how and where the business plans to operate in the future. Free zones are ideal for testing the market and keeping overheads low. Taking time to align the license type with long-term goals is incredibly important in preventing expensive changes and helping the business grow smoothly from day one.
Business License Options for Non-Residents in Dubai
Let’s talk about Dubai business license for non-residents. Non-residents can obtain various business licenses and must assess their intended activity to understand these options when determining the most appropriate business structure.
Commercial License for Foreign Entrepreneurs
A commercial license applies to all trading activities, including import-export, wholesale, retail, and ecommerce. It enables foreign trading entrepreneurs to buy, sell, and distribute any products in the UAE and in other countries.
Since foreign entrepreneurs mainly engage in physical or online trading, this license provides the most operational flexibility and is preferred over others. It can be obtained in either the mainland or free zone, depending on the operational requirements.
Professional License for Foreigners
Service-based businesses require a professional license. This includes consultancy, marketing services, IT services, education, coaching, and other activities of the profession. This license is also in high demand among freelancers, consultants, and other professionals moving to Dubai, as it empowers them to conduct activities going their area of specialization without any trading or manufacturing activities.
Industrial License (High-Level Overview)
Activities categorized under manufacturing, production, and other industrial activities require an industrial license. This category comes with its own set of additional approvals and compliance requirements, including leasing of industrial facilities and environmental assessments.
Although industrial licenses tend to be on the more rare side for first-time foreign entrepreneurs, they do remain available for more developed manufacturers looking to enter the UAE market.
5 Key Steps to Start a Business in Dubai as a Non-Citizen
Starting a business in Dubai as a foreigner is a step-by-step process with some variation depending on the jurisdiction and the business activity involved. Dubai is a great business destination but starting a business here as a foreigner can be a long and tedious process.
Step 1 – Choose the Right Business Activity
The first step in starting your business is selecting a business activity. Business activities in Dubai cover a constructable number of business activities across a number of sectors. The activity you select will need to be approved, and that will determine your compliance requirements, the licensing authority you will need to deal with, and your visa eligibility.
Foreigners need to ensure that the business activity selected is in line with the long-term business activity.
Step 2 – Select Mainland or Free Zone Jurisdiction
The first step after you have a business activity is to select a jurisdiction, either a free zone or the mainland. Each comes with its own requirements and levels of compliance.
This will dictate so many of the other things involved in starting your business, including how much will be involved to get things going, how much you will be paying in the long run, how much control you will have, what your office requirements will be, and what your visa options will be.
Step 3 – Apply for Initial Approval and Trade Name
Initial approval means business authorities have no issue with the intended business. At this point, entrepreneurs also begin to reserve a trade name, abiding by the UAE trade name regulations. Trade names cannot contain prohibited/restricted words and cannot be the same as already registered companies.
Step 4 – Obtain Business License in Dubai
After obtaining the approvals and submitting the necessary documents, the business license is then issued. This step formally registers the company and operations can fully commence. Licenses can take varying amounts of time to be issued, however, a majority of free zone business licenses get processed in a matter of days.
Step 5 – Apply for Investor Visa and Emirates ID
After the company registration is completed, foreign owners are then eligible to apply for investor visas. This step has a medical examination, biometric capturing, and Emirates ID processing. This visa grants them the right to stay in the country and provides them with the ability to open bank accounts and use other services in the UAE.
Documents Required to Start a Business in Dubai as a Foreigner
While requirements vary, most foreign entrepreneurs need to prepare the following documents when figuring out how to start a business in Dubai as a foreigner:
- Passport copies of shareholders and managers
- Entry visa or residency status, if applicable
- Business plan for certain activities
- Memorandum of Association or legal incorporation documents
- Office lease or flexi-desk agreement
Having documents prepared in advance helps avoid delays during licensing.
Cost of Starting a Business in Dubai for Foreigners
Starting a business in Dubai for foreigners depends on various factors. Business licenses fees differ by activity and jurisdiction. They could range from inexpensive packages in free zones to costly packages in the mainland. There are also costs for visas and immigration, Emirates ID, and medical testing.
There are also costs for office or flexi-desk rentals, especially for mainland companies. There are also annual renewal costs for license renewals, visa renewals, and office lease renewals. You must plan for recurring costs in order to sustain your business in the long run.
Business Visa Options for Foreign Business Owners in Dubai
Depending on the role foreign business owners have in the company, they can apply for different visas. Investor visas are for company owners, and they allow long-term residency. Partner visas are for shareholders who are active in the business.
These visas are usually for 2-3 years, and they can be renewed. Visa holders are also able to sponsor their family, depending on income and housing requirements.
Common Challenges Foreigners Face When Starting a Business in Dubai
Even with the well-structured procedures, challenges still remain for newcomers. A company’s potential can be hindered by poor jurisdiction selection. Unsurprisingly, newcomers with no local company history will face delays in banking. Some business owners miscalculate their budget assuming all setup, renewal, and compliance costs will be low. These problems could have been avoided if proper instructions were in place.
Tips for Foreign Entrepreneurs to Start Smoothly in Dubai
Entrepreneurs need to make sure they plan properly and precisely. It is important to set the business model and the budget, and then make the right jurisdiction and business choices. Business setup professionals can help avoid costly mistakes and save time. The scalability potential should always be considered in the initial setup.
How SPC Free Zone Helps Foreigners Start a Business in Dubai
SPC Free Zone provides foreign entrepreneurs with simple and quick licensing, cheaper packages, and visa assistance. The process of setting up is designed to be quick and affordable, with instant licensing and pay-as-you-go options for all applicants. SPC Free Zone also gives you a range of services, including personalised support, corporate banking setups, visa approvals, and more, to make business compliance and scalability in the UAE easier for non-resident entrepreneurs.
Conclusion
Starting a business in Dubai as a foreigner is no longer a difficult or restrictive process. With the right structure, clear planning, and professional support, non-residents can truly establish and grow successful businesses in the UAE.
Don’t forget, choosing the right jurisdiction and setup partner plays a critical role. For many foreign entrepreneurs, SPC Free Zone offers a practical and cost-efficient entry point into the Dubai market.
FAQs – Starting a Business in Dubai as a Foreigner
Can foreigners fully own a business in Dubai?
Yes, most business activities allow 100 percent foreign ownership.
Do non-residents need a local sponsor in Dubai?
In most cases, no. Local sponsors are no longer required for many activities.
What is the minimum cost to start a business in Dubai as a foreigner?
Costs vary by jurisdiction and activity, but free zone packages are generally more affordable.
Can a foreigner open a bank account in Dubai?
Yes, once the company is licensed and residency is issued, bank accounts can be opened.
How long does it take to start a business in Dubai?
Depending on the setup, it can take anywhere from a few days to a few weeks.
