Company Formation in Dubai: From Business Plan to Trade License

Forming a company in Dubai has never been more accessible. With the UAE's landmark 2020 ownership reforms and the continued growth of over 45 free zones across the Emirates, foreign entrepreneurs can now establish a fully owned legal entity in as little as three business days. This guide walks you through every aspect of company formation in Dubai—from selecting the right legal structure and jurisdiction to preparing your documents, understanding capital requirements, and completing the registration process.

Legal Entity Types for Dubai Company Formation

The UAE offers several company structures, each suited to different business needs. Understanding the differences is essential before you begin the formation process.

Free Zone Establishment (FZE)

An FZE is a single-shareholder limited liability entity registered within a specific free zone. It is the most popular structure for solo entrepreneurs and consultants. The owner's liability is limited to their share capital contribution, and the entity can employ staff and sponsor visas. FZEs are available in virtually every free zone, with setup costs starting from AED 5,750 at SHAMS and AED 12,000 at IFZA.

Free Zone Company (FZ-LLC)

When two or more partners want to form a company within a free zone, the FZ-LLC (Free Zone Limited Liability Company) is the standard structure. It permits 2 to 50 shareholders and offers the same limited liability protections as an FZE. Share distribution and governance rules are outlined in the Memorandum of Association.

Mainland LLC (Limited Liability Company)

A mainland LLC is licensed through Dubai Economy and Tourism (DET) and can operate anywhere in the UAE without restriction. Since the 2020 reforms, 100% foreign ownership is permitted for most activities. An LLC requires at least one shareholder and one manager (who can be the same person). Mainland formation is more complex, involving an office lease, initial approval, external approval from relevant authorities, and a Memorandum of Association attested by a notary public. Budget AED 25,000 to AED 50,000 for first-year costs.

Branch Office

Foreign companies can open a branch in Dubai without forming a new entity. The branch is an extension of the parent company and operates under the same legal identity. This is common for multinationals that want a presence in the UAE without establishing a separate subsidiary. Branch offices can be set up in both free zones and the mainland.

Company Formation Costs Compared (2026)

Required Documents for Company Formation

Documentation requirements are consistent across most jurisdictions, though mainland formation involves additional attestation steps. For a free zone company, you will generally need:

• Passport copy (valid for at least six months) for all shareholders and managers
• Passport-sized photograph (white background) for each shareholder
• Proof of residential address (utility bill or bank statement, not older than three months)
• Completed application form with chosen company name (typically three name options)
• Brief business plan or activity description
• No Objection Certificate (NOC) if currently employed in the UAE on another visa

For mainland LLC formation, you will also need an attested Memorandum of Association, a tenancy contract (Ejari-registered), and external approvals from sector-specific regulators (e.g., MOHRE for recruitment firms, DHA for healthcare). Corporate shareholders require additional documentation including board resolutions and certificates of good standing.

The Company Formation Process: Timeline

The formation timeline depends heavily on your chosen jurisdiction. Free zones have streamlined digital processes that dramatically cut the time compared to mainland registration.

• Day 1-2: Name reservation and initial application submission. Most free zones confirm name availability within 24 hours.
• Day 2-5: Document review, license fee payment, and issuance of trade license, MOA, and share certificate. Zones like IFZA and SHAMS often deliver within 48 hours of payment.
• Day 5-15: Visa processing (entry permit, medical, Emirates ID, visa stamping) if applying for residency. This phase requires physical presence in the UAE.
• Day 15-30: Bank account opening. This is the longest step and varies by bank. Digital banks may approve in 5 days; traditional banks may take 4 to 6 weeks.

100% Foreign Ownership: What You Need to Know

Since the 2020 amendment to Federal Decree-Law No. 32 of 2021 on Commercial Companies, the UAE has allowed 100% foreign ownership for over 1,000 economic activities on the mainland. Previously, mainland companies required a 51% Emirati partner. Free zones have always permitted full foreign ownership. Today, the only sectors that still require local partnership include certain strategic activities such as defence, banking (in some cases), and oil and gas exploration. For the vast majority of entrepreneurs forming a consulting, trading, technology, or services company, full ownership is available in both free zone and mainland jurisdictions. Read our full Dubai business setup guide for additional context, or compare free zone vs mainland structures to decide which is right for you.

Choosing the Right Free Zone for Your Company

The choice of free zone affects your costs, visa allocation, banking ease, and the type of activities you can license. Budget-conscious entrepreneurs often start with SHAMS (AED 5,750) or Ajman Free Zone (AED 6,500), then upgrade to a Dubai-based zone like IFZA or DMCC as the business scales. For a side-by-side breakdown, explore our Dubai free zone company guide which covers benefits, costs, and the top zones for specific industries. If you need a specific license type such as a professional or commercial license, be sure to verify it is available in your chosen zone before applying.

Frequently Asked Questions