Dubai Company Formation and Registration: A Guide for Foreign Investors (2025)

1. Choosing a Business Structure:

• Mainland Company:
  • Allows businesses to operate within the UAE market and with government entities.  
  • Requires a local sponsor (UAE national) who holds 51% of the company shares (in most cases, but there are exceptions).  
  • The Department of Economic Development (DED) is the governing authority.  
• Free Zone Company:
  • Offers 100% foreign ownership, 100% repatriation of profits, and potential tax exemptions (subject to conditions).  
  • Each free zone has its own governing authority and regulations.  
  Restricted to operating within the free zone or outside the UAE.
• Offshore Company:
  • Used for international business activities, asset protection, and tax planning.  
  • Registered in offshore jurisdictions like Jebel Ali Offshore.  
  • Restricted from conducting business within the UAE.
  • Branch or Representative Office:
  • An extension of a foreign company.  
  • Allows the foreign company to operate in Dubai without establishing a separate legal entity.
  • Requires a local service agent.

2. Choosing a Trade Name and Activities:

• Select a unique and appropriate trade name that complies with DED or free zone authority regulations.
• Define the business activities that will be conducted. Ensure that the activities are permissible under the chosen business structure.

3. Obtaining Initial Approval:

• Apply for initial approval from the DED (for mainland companies) or the relevant free zone authority.
• Submit the required documents, including passport copies, visa copies (if applicable), and business plan.

4. Preparing Legal Documents:

• Draft the company's Memorandum of Association (MOA) and Articles of Association (AOA).
• Obtain necessary legal translations and notarizations.

5. Obtaining Necessary Approvals:

• Obtain approvals from relevant government departments, depending on the business activities (e.g., Dubai Municipality, Civil Defense).  

6. Securing a Business Location:

• Obtain a lease agreement for office or warehouse space.
• The type of business location will depend on the business activity and structure.

7. Finalizing Registration:

• Submit all required documents and approvals to the DED or free zone authority.
• Pay the registration fees.
• Obtain the trade license.

8. Post-Registration Requirements:

• Open a corporate bank account.
• Obtain necessary visas for employees.
• Register for VAT (if applicable).

Key Considerations for Foreign Investors:

• Free Zone vs. Mainland: Carefully evaluate the advantages and disadvantages of each option.
• Local Sponsor/Agent: Understand the role and responsibilities of your local sponsor or service agent.
• Legal and Professional Advice: Seek professional legal and business advice to ensure compliance.
• Documentation: Prepare all necessary documents accurately and completely.
• Regulations are Subject to Change: It is extremely vital to keep up to date with any and all changes to the rules set in place by the governing bodies.