How to Set Up a Business in the UAE: Company Formation, Licensing and FAQs
The UAE offers a wide range of opportunities for businesses, but choosing where and how to establish a company is as important as the business idea itself. The choices made at the outset can shape how your business operates, reaches customers and grows in the UAE. This guide provides a practical overview of the principal setup options, the formation process, and the key regulatory, financial and operational considerations.
Mainland, Free Zone or Financial Free Zone?
- Mainland: Companies are licenced by the economic authority of the relevant emirate. Full foreign ownership is available for most activities, but strategic-impact activities and some regulated sectors are subject to additional requirements.
- Commercial and sector-focused free zones: Each free zone sets its own permitted activities, legal structures and facilities. Confirm that its licence supports your operating model and intended market access. A free zone licence, by itself, does not provide unrestricted access to the UAE mainland.
- Financial free zones (DIFC and ADGM): These accommodate financial, non-financial and retail businesses. Regulated financial services require permissions from the DFSA or FSRA, which are separate from incorporation and commercial licensing. Table 2 gives a short overview of the applicable fees and capital requirements.
| Option | Who Licences You | Market Access | Points to Confirm |
| Mainland | The economic authority of the relevant emirate | Direct access to the UAE market, subject to the licenced activity | Sector-specific approvals; foreign-ownership restrictions for strategic-impact activities; premises requirements |
| Commercial and Sector-Focused Free Zones | The free zone authority | Within the zone and internationally; mainland access needs separate authorisation | Permitted activities, legal structures, facilities and mainland-access route |
| Financial Free Zones (DIFC and ADGM) | The registrar or licensing authority, plus DFSA or FSRA for regulated activities | Within the centre and internationally; wider UAE access depends on the activity | Whether the activity is regulated; regulatory permissions and capital, substance and compliance requirements |
Key Decisions Before Forming a Company
Before selecting a jurisdiction, consider:
- Activities and customers: What will the company do, and where are its customers?
- Structure and ownership: Who will own and control the business?
- Operations: What premises, staffing, visas and facilities will you need?
- Approvals: Does the activity need sector-specific or financial services authorisation?
- Banking and funding: How will the company be funded, and what transactions do you expect?
- Tax and compliance: Which registrations, records and ongoing obligations apply?
- Growth: Can the structure accommodate future activities, investors and locations?
The Company Formation Process
The sequence varies by jurisdiction and activity. It typically involves:
- Defining your business activities and selecting the jurisdiction and legal structure.
- Checking the company name and identifying the approvals required.
- Preparing the application, ownership and corporate documents.
- Arranging suitable premises and completing incorporation and licensing.
- Completing the applicable banking, immigration, employment, tax and customs arrangements.
Table 1 (below) brings together indicative fees, timelines and documents for the main mainland and free zone options, and Table 2 gives a short overview of the financial services requirements in ADGM and DIFC. Both are intended as a starting point only.
Indicative Fees, Timelines and Documents
Indicative comparison for Abu Dhabi mainland, Dubai mainland, DMCC, RAKEZ, JAFZA and SAIF Zone. Figures are compiled from publicly available sources current to 2026 and should be confirmed with the relevant authority before reliance.
Table 1A: Mainland – Abu Dhabi and Dubai
| Item | Abu Dhabi mainland | Dubai mainland |
| Trade name reservation | About AED 620–1,000. | About AED 620–1,000, valid for six months. |
| Initial approval | Not separately published; one adviser estimates AED 100–300. | AED 120 government fee. |
| Basic licence fee | Standard Economic Licence: AED 1,200 basic, covering 6 activities, plus AED 100 for each extra activity. Tajer Abu Dhabi, Virtual and Instant licences: AED 790–5,500. ADRA publishes these as basic costs; the final fee depends on activities and legal form. | No single published fee. Total DET government fees typically run AED 10,000–50,000, depending on licence type, activities and legal form. |
| Indicative year-one cost (lean setup) | AED 12,000–40,000 in government and setup fees, before office rent, visa & immigration cost and external approval fee (if applicable). | AED 15,000–45,000 all-in for a lean professional licence. |
| Other cost items | Tawtheeq lease registration, Chamber of Commerce membership and establishment card. Indicative cost could be AED 2,700 – 4000 appx. | Ejari lease registration, a Municipality market fee (calculated according to the rental value) and establishment card. |
| Indicative timeline |
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| Documents: individual shareholders and managers |
The Virtual Licence needs only a passport and photo (specific to the selected activity). |
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| Documents: company |
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| Additional or conditional items |
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| Corporate shareholders | Certificate of incorporation, constitutional documents, a board resolution and a power of attorney, UBO details, all legalised/ notarized/ attested (as applicable). | Same. |
Note
- In both emirates, initial approval is not permission to start operating.
Table 1B: Free zones – DMCC, RAKEZ, JAFZA and SAIF Zone
| Item | DMCC (Dubai) | RAKEZ (Ras Al Khaimah) | JAFZA (Dubai) | SAIF Zone (Sharjah) |
| Published fees / packages | Official schedule (incl. VAT):
| Co-working package:
Visa tiers from a consultant’s summary of the official schedule. | JAFZA says licences start at AED 5,000 but publishes no itemised breakdown. Warehouse space from AED 400 per sqm. An online cost calculator is available. | No official licence price list is published. Advertised packages start at about AED 10,800, including a flexi-desk and 3 visa slots. |
| Indicative year-one cost |
| Close to the package price, as the visa price includes immigration processing. Banking is extra. |
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| Indicative timeline | About 10 working days, depending on documents and approvals. Bank account opening adds 2–6 weeks. | About 5–7 working days, according to consultants. | 3–14 business days. Visas take about 6–8 weeks in total. | 1–3 days, or as little as 24 hours. Visas and bank account take about 2–3 weeks. |
| Documents: individual shareholders |
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| Documents: corporate shareholders / branches |
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| For a branch:
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Must be notarized, legalised and attested by Ministry of Foreign Affairs (“MOFA”) and the UAE Embassy, as applicable. |
| Main facility / visa link | The visa quota depends on the office type. | Co-working space up to warehouse. | Built around facilities. A flexi-desk supports only 1–3 visas. | Visa quota depends on facility: about 3 for an office, 5 for an executive office, 8 for a suite. |
Notes
- Most free zone prices bundle the licence with a workspace, so they do not compare directly with mainland licence fees.
- All four free zones require UBO disclosure, and corporate documents issued abroad must be legalised.
Financial Services in ADGM and DIFC: A Short Overview
Regulated financial services require authorisation from the FSRA (ADGM) or the DFSA (DIFC), in addition to incorporation. Table 2 summarises, by regulatory category, the indicative activities, application fees and minimum Base Capital Requirement for Categories 1 to 4. All amounts are in US dollars.
Table 2: ADGM (FSRA) and DIFC (DFSA) – application fees and base capital requirements at a glance
| Category | Indicative activities | Application fee (USD) | ADGM (FSRA) base capital (USD) | DIFC (DFSA) base capital (USD) |
| Category 1 | Accepting deposits | 70,000 (both centres) | 10 million | 10 million |
| Category 2 | Providing credit; dealing in investments as principal | ADGM: 40,000–70,000 DIFC: 25,000–70,000 | 2 million | 2 million (500,000 if matched principal only) |
| Category 3A | Dealing in investments as agent; matched principal dealing (ADGM) | 25,000 (both centres) | 500,000 (2 million for matched principal in OTC leveraged products with retail clients) | 200,000 |
| Category 3B | Custody for funds; acting as trustee of a fund or investment trust | ADGM: 10,000–25,000 DIFC: 25,000 | 4 million (250,000 for Custody for a Fund other than Public Fund) | 500,000 to 2 million, depending on the service (1 million for Custody of Crypto assets) |
| Category 3C | Fund and asset management; other custody; trust services; money services; fiat-referenced tokens (ADGM) | ADGM: 10,000–70,000 DIFC: 2,000–25,000 | 250,000 (lower for fund managers only; 2 million for fiat-referenced token issuers) | 500,000 (140,000 or 40,000 for fund or asset managers only) |
| Category 3D | Money services other than stored value and money transmission | DIFC: 15,000 | Not applicable | 200,000 |
| Category 4 | Arranging and advising; insurance intermediation and management; fund administration; other trust services; platforms | ADGM: 10,000–25,000 DIFC: 5,000–20,000 | 50,000 (150,000 for a private financing platform) | 30,000 (140,000 for crowdfunding or money transmission) |
Notes
- Base Capital Requirement is a minimum; a firm’s overall capital requirement may be higher.
- Where several activities are applied for, the fee is calculated under each authority’s own multiple-activity rules. Fees for specific asset classes, annual supervision fees and incorporation and licence fees are payable in addition.
- A regulatory business plan, regulatory manuals and information on the board, senior executive, compliance, MLRO, finance and risk functions are generally required for both centres.
- Based on the ADGM FSRA FEES and PRU Rules and the DFSA Fees and PIB Modules, as published. Confirm current amounts with the relevant regulator before reliance.
Plan for the Full Cost, Not Just the Licence Fee
Plan for the total cost of compliant operation over the first 12 to 24 months, not only the initial licence price. Allow for renewals, premises, visas, staffing, additional approvals, professional support, accounting, audit, tax compliance and working capital. Table 1 sets out indicative first-year costs, timelines and documents for the main mainland and free zone options.
Banking
Banks carry out their own customer due diligence. Prepare a clear business description, ownership information and supporting details on funding and expected transactions for submission to the banks for account opening.
Tax
Free zone companies are not automatically exempt from UAE corporate tax and must register for it. A Qualifying Free Zone Person may benefit from a 0% rate on Qualifying Income subject to all statutory conditions, including adequate substance in the UAE and audited financial statements. Assess corporate tax and VAT implications before you finalise the structure.
Common Mistakes to Avoid
- Choosing a jurisdiction solely on advertised licence costs.
- Selecting activities that do not reflect the intended business.
- Assuming unrestricted mainland access or automatic tax exemption.
- Underestimating banking preparation and ongoing operating costs.
- Overlooking additional approvals and post-incorporation obligations.
Frequently Asked Questions
Can a foreign investor own 100% of a UAE company?
Full foreign ownership is available for most mainland and free zone activities. However, restrictions or additional conditions may apply to strategic-impact activities and regulated sectors, so the proposed activity and ownership structure should be checked before incorporation.
Does a free zone company have automatic access to the UAE mainland?
No. A free zone licence does not, by itself, provide unrestricted access to the UAE mainland. The appropriate route depends on the activity, proposed customers and operating model, and may require a separate licence, permit, branch, distributor or other authorised arrangement.
How should I choose between the mainland, a commercial free zone and a financial free zone?
The choice should be based on the proposed activities, customer location, market-access needs, ownership and control, premises and visa requirements, regulatory approvals, tax position, banking readiness and total operating cost. Advertised licence fees alone should not determine the structure.
How long does it take to set up a business and open a bank account?
The timeline varies by jurisdiction, activity, ownership structure, document readiness and external approvals. Incorporation and licensing may be completed before the bank account is opened, as banks conduct their own customer due diligence and may request further information on ownership, funding and expected transactions.
How Baker Tilly UAE Can Help
Baker Tilly UAE can support you with business model assessment, jurisdiction selection, structuring, licensing and incorporation documentation. We can also assist with tax considerations, banking readiness and ongoing accounting, audit, regulatory and compliance requirements, subject to an agreed scope and applicable professional requirements.
Disclaimer
This article is provided for general information only and does not constitute legal, tax, regulatory, financial or other professional advice. The information may not apply to every situation and may change over time. Professional advice should be obtained based on the specific facts, proposed activities and circumstances of each case before any decision is made or action is taken.