Dubai Business Setup in 2026: Mainland vs Free Zone vs Offshore, Step by Step

Dubai is one of the easiest places in the world to open a company as a foreigner — but "Dubai business setup" covers three very different routes, and the cheapest-looking package isn't always the cheapest business to run. This guide is for founders, freelancers and overseas companies weighing Dubai in 2026. It explains the mainland, free zone and offshore options, the licence types, the actual steps on the Department of Economy and Tourism's Invest in Dubai platform, what you can own, which costs are officially published, visas, and the corporate tax and VAT rules every Dubai company now lives with.

Quick answer

To set up a business in Dubai, choose a jurisdiction — mainland (licensed by the Department of Economy and Tourism, DET), a free zone (licensed by the zone's authority) or an offshore company (no UAE trading) — then pick your activities and legal form, reserve a trade name, get initial approval, sign the MOA, secure an address (Ejari-registered on the mainland) and pay the licence fees. Most activities now allow 100% foreign ownership.

• Mainland: trade anywhere in the UAE; licence fees calculated on Invest in Dubai; pay within 30 days of the voucher

• Free zones: online setup, licences typically within 14 working days; e.g. Meydan from AED 12,500 (published, October 2026)

• Corporate tax: 0% to AED 375,000, 9% above — register within 3 months

• VAT: 5%, mandatory above AED 375,000 of taxable supplies

Mainland, free zone or offshore: the first decision

Everything else — your licence, office, visas, who you can sell to — follows from where the company is registered.

Dubai mainland vs free zone vs offshore (2026)

	Mainland (DET)	Free zone	Offshore
Licensed by	Department of Economy and Tourism	The free zone authority (e.g. DMCC, DAFZA, Meydan)	An offshore registry (e.g. JAFZA Offshore, RAK ICC)
Foreign ownership	Up to 100% for most activities	100%	100%
Where you can trade	Anywhere in the UAE and abroad	Inside the zone and abroad; UAE mainland usually via a distributor or extra licence	Outside the UAE only — no local trading
Office	Physical premises with Ejari (first-year exceptions for some licences)	Flexi-desk, office or warehouse inside the zone	Registered agent address only
Residence visas	Yes, linked to office size	Yes, linked to package or space	No
Corporate tax	0% to AED 375,000, then 9%	0% on qualifying income if a Qualifying Free Zone Person; otherwise standard rates	Depends on residence and activity — take advice
Government contracts	Eligible	Generally not directly	No

Licensed by

Mainland (DET)

Department of Economy and Tourism

Free zone

The free zone authority (e.g. DMCC, DAFZA, Meydan)

Offshore

An offshore registry (e.g. JAFZA Offshore, RAK ICC)

Foreign ownership

Mainland (DET)

Up to 100% for most activities

Free zone

100%

Offshore

100%

Where you can trade

Mainland (DET)

Anywhere in the UAE and abroad

Free zone

Inside the zone and abroad; UAE mainland usually via a distributor or extra licence

Offshore

Outside the UAE only — no local trading

Office

Mainland (DET)

Physical premises with Ejari (first-year exceptions for some licences)

Free zone

Flexi-desk, office or warehouse inside the zone

Offshore

Registered agent address only

Residence visas

Mainland (DET)

Yes, linked to office size

Free zone

Yes, linked to package or space

Offshore

No

Corporate tax

Mainland (DET)

0% to AED 375,000, then 9%

Free zone

0% on qualifying income if a Qualifying Free Zone Person; otherwise standard rates

Offshore

Depends on residence and activity — take advice

Government contracts

Mainland (DET)

Eligible

Free zone

Generally not directly

Offshore

No

Mainland is the right choice when your customers are in the UAE: a restaurant, a salon, a contracting firm, a retail shop or a consultancy selling to Dubai companies and government. A mainland licence lets you trade anywhere in the country without an intermediary.

Free zones suit businesses whose customers are mostly overseas or other free zone companies — trading hubs, e-commerce sellers shipping abroad, tech and media firms, consultancies with international clients. Dubai has many zones with their own sectors and price lists; our guides to Meydan Free Zone and Dubai Airport Free Zone (DAFZA) go through two of them in detail. If price matters more than a Dubai address, zones in other emirates — such as Ajman Free Zone and Hamriyah Free Zone in Sharjah — publish lower entry packages.

Offshore companies are holding or international-trading vehicles. They can own assets and bank abroad but can't trade within the UAE, rent office space or sponsor visas. They're a niche tool for asset holding and group structures, not a way to run a Dubai business cheaply.

Ownership rules: when 100% foreign ownership applies

Until 2021, most mainland companies needed an Emirati shareholder holding at least 51%. Federal Decree-Law No. 26 of 2020, which took effect in early 2021 and was later consolidated into Federal Decree-Law No. 32 of 2021 on Commercial Companies, removed that rule. Foreign investors can now own 100% of most mainland companies, and branches of foreign companies no longer need a UAE national service agent.

The law lets the Cabinet set special conditions for activities of "strategic impact". According to the UAE government portal, activities that can't be fully foreign-owned include security, defence and military activities; banks, exchange houses, financing, insurance and currency printing; commercial agencies; Hajj and Umrah services; Quran recitation institutes; natural pearl catching; and marine animal catching.

One rule still catches people out. The UAE portal notes that businesses owned entirely by non-GCC nationals need a local service agent (LSA) where the legal form requires one — in practice, civil establishments such as professional sole establishments and civil companies. The agent is a UAE national who handles government paperwork for a fee but owns no shares and takes no profit. If you're a foreign consultant, designer or engineer setting up a professional licence as a sole establishment, expect to sign a notarised LSA agreement. An LLC owned by foreigners doesn't need one.

Dubai licence types

The licence describes what the company may do. The UAE government portal lists eight licence types offered through Invest in Dubai:

Dubai mainland licence types (Invest in Dubai)

Commercial

Trading, retail, import and export, general services

Professional

Consultants, designers, IT, artisans and other skill-based services

Industrial

Manufacturing and processing

Instant · SME · Intelaq · eTrader · Dual

Fast-track, home-based, online and dual-jurisdiction options

Commercial licences cover buying and selling goods and most general services. Professional licences cover services that rely on a person's skill or qualifications; some professions — medical, legal, engineering, education — need approval from another regulator before the licence is issued. Industrial licences are for manufacturing and usually involve an industrial plot and extra approvals.

The other five are variations aimed at smaller or faster setups. The Instant licence is a fast-track licence for eligible activities that don't need outside approvals. The eTrader licence is for selling online and through social media. Intelaq is DET's home-based business licence. The SME route is linked to Dubai's SME support programmes. A dual licence lets a free zone company operate on the mainland under a DET licence while keeping its free zone registration. Who can hold each of these — nationality, residence, home or commercial address — is set by DET and changes from time to time, so check the eligibility notes on Invest in Dubai before you choose one.

A licence can carry more than one activity, and there are more than 2,000 to choose from. Pick activities that genuinely match what you'll do: the activity drives the licence type, the legal form, any external approvals and the fees.

How to set up a mainland company on Invest in Dubai

Invest in Dubai is DET's online platform for mainland setup. You sign in with UAE Pass, and the platform takes you through the same sequence the UAE government portal describes for the mainland:

Mainland setup in Dubai, step by step

1. 1

   Choose your activities

   Select one or more activities from DET's list. They decide the licence type and whether you need approval from another authority.

2. 2

   Pick a legal form

   Common forms are a sole establishment, a civil company, a limited liability company (LLC) or a branch of a foreign company. The legal form must match the activity.

3. 3

   Reserve a trade name

   The name must end with the legal form (e.g. LLC, EST), must not have been registered before, and can't use religious names, government names or other bodies' names or logos.

4. 4

   Get initial approval

   This confirms the government has no objection to the business. It doesn't let you start trading. Foreign investors' details are checked by the residency authorities first.

5. 5

   Sign the MOA (and LSA if needed)

   LLCs and other companies sign a Memorandum of Association; non-GCC-owned civil businesses also sign a local service agent agreement, notarised.

6. 6

   Secure premises and register Ejari

   Every mainland business needs a compliant address. In Dubai the tenancy contract must be registered in Ejari.

7. 7

   Obtain external approvals

   Some activities need sign-off from regulators such as the Central Bank, TDRA, the Securities and Commodities Authority or a ministry.

8. 8

   Pay and collect the licence

   Pay the fees within 30 days of receiving the payment voucher, or the application is cancelled.

Under the Instant licence, some of these steps are deferred. Setup consultancy EGSH describes it as available for eligible activities without external approvals, issued online after UAE Pass signing, with a DET-assigned virtual address for the first 12 months — and an Ejari-registered commercial tenancy required at the first renewal. If you use this route, budget for real premises from year two.

After the licence, the company applies for its establishment (immigration) card, opens a corporate bank account, registers for corporate tax and, if it will cross the threshold, VAT. Bank account opening is often the slowest part: banks run their own compliance checks and may ask for a business plan, contracts and proof of source of funds.

How free zone setup differs

Free zones run their own licensing, outside DET. The process is usually fully online: choose an activity and package, choose the legal form, submit passport copies and any business plan the zone requests, sign the zone's documents and pay. The UAE government portal says that after review and approval, most free zones issue the licence within 14 working days.

Legal forms in free zones are typically a Free Zone Establishment (FZE) with one shareholder, a free zone LLC (FZ-LLC or FZCO) with several, or a branch of a local or foreign company. Not every zone registers every form. Some zones run their own instant-licence products — Meydan Free Zone, for example, advertises its Fawri licence at AED 15,000 for solo founders, issued online.

Two points matter more than the headline price. First, check whether the zone allows your exact activity, because each zone licenses a different list. Second, check how many visas your package allows — a flexi-desk package might include none or only a small allocation, and adding visas usually means upgrading to an office. Our UAE business licence guide compares the main routes side by side.

What a Dubai business setup costs (published figures only)

Setup costs in Dubai are quoted everywhere, but very few come from an official price list with a date. Here's what we could verify, and how to work out the rest.

Mainland fees aren't a single number. DET calculates them from your activities, legal form and premises, adding market and knowledge fees and, for many activities, Dubai Chamber membership. You see the exact figure on Invest in Dubai before you pay. Rent is usually the biggest variable: the premises must be suitable for the activity and registered in Ejari, and some licences tie the number of visas to the office's floor area.

Visas add up. Each residence visa involves an entry permit, a medical test, Emirates ID and visa stamping fees, paid separately from the licence. Free zones list their own visa fees; mainland visas go through the immigration authorities.

Budget for renewal, not just launch. Licences renew every year. Year two often costs more than year one, because introductory discounts end and, under the Instant licence, you'll need real premises. When comparing quotes from setup agents, ask for a line-by-line breakdown of government fees versus service fees, and check the government figures against Invest in Dubai or the free zone's own calculator. Plan the total with our startup cost calculator.

Example. Omar, a British software consultant, wants a Dubai base for clients in Europe and the Gulf. A Meydan Free Zone licence at the published AED 12,500 gives him a company and flexi-desk, with his investor visa, medical and Emirates ID on top. If he later wins a contract with a Dubai government entity that requires a mainland licence, he can apply for a DET dual licence or a mainland branch rather than closing the free zone company.

Residence visas through your company

A Dubai company can sponsor residence visas once it has its licence and establishment card. The usual sequence is an entry permit (or change of status if you're already in the UAE), a medical fitness test, Emirates ID biometrics and visa issuance. Owners typically take an investor or partner visa; employees get employment visas, and the company must also register them with the Ministry of Human Resources and Emiratisation if it's on the mainland. Some free zones set a minimum share capital for an investor visa — Meydan, for example, requires AED 50,000.

The golden visa is a separate long-term residence route. The UAE government portal lists investor categories starting from AED 2 million of qualifying investment, and an entrepreneur category for founders of innovative or technical projects backed by an approved incubator or authority. Golden visa holders don't need a sponsor and can sponsor family members. The rules for each category are detailed, so check the current criteria on u.ae before planning around one.

Corporate tax, VAT and e-invoicing

Low tax remains one of Dubai's draws, but "tax-free" is out of date.

UAE tax rules that apply to a new Dubai company

1 June 2023

Corporate tax applies to financial years starting on or after this date

Within 3 months of incorporation

Register for corporate tax with the FTA (penalty AED 10,000 if late)

Ongoing

VAT at 5% once taxable supplies exceed AED 375,000

7 August 2026

Small Business Relief extended to tax periods ending by 31 December 2029

1 January 2027

Mandatory e-invoicing starts for businesses with revenue of AED 50 million or more

Corporate tax. Taxable income up to AED 375,000 is taxed at 0% and income above it at 9%. Every company — mainland and free zone — must register with the Federal Tax Authority on EmaraTax within 3 months of incorporation, even if it expects to owe nothing; registering late costs AED 10,000. Individuals running a business in their own name register once turnover exceeds AED 1 million.

Small Business Relief. Resident businesses with revenue of up to AED 3 million can elect to be treated as having no taxable income for a tax period, with simpler compliance. On 7 August 2026 the Ministry of Finance announced Ministerial Decision No. 131 of 2026, extending the relief to tax periods ending on or before 31 December 2029. It isn't automatic — you elect it in the return — and Qualifying Free Zone Persons can't use it.

Free zone 0%. A free zone company pays 0% only on qualifying income and only if it meets the Qualifying Free Zone Person conditions, including substance in the zone and a de minimis limit on non-qualifying revenue of the lower of 5% of revenue or AED 5 million. A consultancy billing mainland clients may find most of its income taxed at standard rates — model it with our UAE corporate tax calculator.

VAT. Registration is mandatory once taxable supplies and imports over the past 12 months exceed AED 375,000, or are expected to within the next 30 days, and optional from AED 187,500. The standard rate is 5%. Price your quotes with our UAE VAT calculator.

E-invoicing. The Ministry of Finance has confirmed that mandatory e-invoicing starts on 1 January 2027 for businesses with revenue of AED 50 million or more, with smaller businesses following in later phases. A new company won't be in the first wave, but choose accounting software that's ready for it.

Common mistakes in a Dubai business setup

• Choosing a free zone, then selling to mainland customers. You may need a distributor, a dual licence or a mainland branch.
• Picking activities too broadly or too narrowly. Extra activities cost money; missing ones can make contracts or bank accounts difficult.
• Ignoring the local service agent rule for professional sole establishments owned by non-GCC nationals.
• Missing the 30 days payment window after DET issues the voucher — the application is cancelled.
• Assuming "no tax". Corporate tax registration is compulsory for every company, and the late penalty applies even if no tax is due.
• Budgeting only for year one. Renewal, premises and visa costs arrive in year two.

Official links

• Invest in Dubai (DET) — mainland setup
• u.ae — steps to start a business on the mainland
• u.ae — full foreign ownership of commercial companies
• u.ae — starting a business in a free zone
• u.ae — golden visa
• FTA — corporate tax registration
• FTA — VAT registration
• Ministry of Finance — Small Business Relief extension

What to do next

Write down who your customers are and where they are — that answers the mainland-or-free-zone question for most founders. Then shortlist activities, compare two or three zones' published packages against a DET quote on Invest in Dubai, and diarise your corporate tax registration for the month you incorporate. Read our UAE business licence guide for the wider picture, and our Meydan, DAFZA and Ajman guides if a free zone is on your list.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

Can a foreigner own 100% of a company in Dubai?

Yes, for most activities. Federal Decree-Law No. 26 of 2020, consolidated into Decree-Law No. 32 of 2021, removed the rule that a mainland company needed a 51% Emirati shareholder. Activities of strategic impact — such as defence, banking and insurance, commercial agencies and some others — remain restricted. Free zone companies have always allowed full foreign ownership.

How much does a Dubai business setup cost?

There's no single price. Free zones publish packages — Meydan Free Zone lists its licence from AED 12,500 with a flexi-desk — but visas, medicals, Emirates ID and extra activities cost more. Mainland fees depend on your activities, legal form, office rent and approvals; DET calculates them on Invest in Dubai once you choose. Budget for year two renewal too, not just the launch price.

Should I choose mainland or a free zone in Dubai?

Choose mainland if you'll sell directly to customers across the UAE, bid for government contracts or need a shop or site anywhere in Dubai. Choose a free zone if you mainly serve overseas clients or other free zone companies, want a simple online setup and a flexi-desk, or need a sector-specific zone. Many consultancies start in a free zone and add a mainland licence later.

Do Dubai companies pay corporate tax?

Yes. UAE corporate tax applies to mainland and free zone companies: 0% on taxable income up to AED 375,000 and 9% above. Every company must register with the FTA within 3 months of incorporation or face a AED 10,000 penalty. Businesses with revenue up to AED 3 million can elect Small Business Relief until 31 December 2029.

Can I get a UAE residence visa through my Dubai company?

Yes. Once your company has its licence and an establishment (immigration) card, you can apply for an investor or partner visa for yourself and employment visas for staff, each with a medical test and Emirates ID. The number of visas depends on your office space or package. Investors who meet higher thresholds — from AED 2 million of qualifying investment — may qualify for a golden visa.

Do I need to register for VAT in Dubai?

You must register for VAT once taxable supplies and imports over the past 12 months exceed AED 375,000, or will in the next 30 days. You can register voluntarily from AED 187,500. The standard rate is 5%. Registration is on the FTA's EmaraTax portal and has no fee.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 7 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Steps to start a business on the mainland — UAE Government (u.ae) · accessed 7 October 2026
2. 2.Full foreign ownership of commercial companies — UAE Government (u.ae) · accessed 7 October 2026
3. 3.Starting a business in a free zone — UAE Government (u.ae) · accessed 7 October 2026
4. 4.Golden visa — UAE Government (u.ae) · accessed 7 October 2026
5. 5.Corporate Tax Registration (service card) — Federal Tax Authority · accessed 7 October 2026
6. 6.VAT Registration (service card) — Federal Tax Authority · accessed 7 October 2026
7. 7.Ministry of Finance confirms applicable taxable income threshold for Corporate Tax — UAE Ministry of Finance · accessed 7 October 2026
8. 8.Extension of Small Business Relief until 31 December 2029 — UAE Ministry of Finance · accessed 7 October 2026
9. 9.Targeted amendments to eInvoicing system decisions — UAE Ministry of Finance · accessed 7 October 2026
10. 10.Meydan Free Zone — licence packages — Meydan Free Zone · accessed 7 October 2026
11. 11.Dubai Instant Licence: same-day business setup — EGSH (setup consultancy) · accessed 7 October 2026