Top 10 Things to Know Before Starting a Company Formation in Dubai

Dubai is one of the most sought-after business destinations in the world, attracting entrepreneurs from every corner of the globe. With a strategic location, investor-friendly policies, and a strong economy, it's no surprise that company formation in Dubai continues to surge year after year.

However, before you dive into the process, there are some crucial things you should know to avoid setbacks and ensure your business journey starts smoothly. Here are the top 10 things to keep in mind before starting your company in Dubai.

1. Choose the Right Business Structure

One of the first and most important decisions is selecting the right legal structure for your company—whether it’s an LLC, sole proprietorship, branch office, or free zone entity. Each structure has its own legal, financial, and operational implications.

2. Mainland vs Free Zone vs Offshore

Understanding the difference between mainland, free zone, and offshore jurisdictions is key. Free zones offer 100% ownership and tax benefits but have restrictions on doing business within the UAE mainland. Mainland companies can operate across the UAE without limitations but may require a local sponsor (depending on the activity). Offshore companies are primarily for asset protection and international trading.

3. Know Your Business Activity

Dubai has a wide range of licensed business activities. You must define your business activity clearly before starting the company formation in Dubai process. The Department of Economic Development (DED) or the respective free zone authority must approve your selected activity.

4. Ownership and Shareholding Rules

The UAE now allows 100% foreign ownership for most business activities in the mainland. However, some strategic sectors may still require a local partner or agent. It’s important to confirm the rules that apply to your chosen industry and structure.

5. Licensing Requirements

There are several types of business licenses in Dubai—commercial, professional, industrial, and tourism, among others. Your license type must align with your business activity. Some licenses also require external approvals from government departments or ministries.

6. Office Space Is Mandatory

Regardless of the jurisdiction, having a physical address is mandatory for most companies. Free zones often offer flexi-desk or shared office solutions for startups. Mainland companies typically need a tenancy contract registered with Ejari.

7. Visa Eligibility

Your license and office space will determine how many visas you can apply for. This includes visas for yourself, employees, and even dependents. Planning your visa quota early is important if you plan to scale quickly.

8. Corporate Bank Account Setup

After your company registration in Dubai is complete, the next step is opening a corporate bank account. While the process is straightforward, banks may require detailed documentation and proof of business activity. Some sectors may also undergo compliance checks due to AML regulations.

9. Cost and Timeline

The cost of starting a company varies depending on the jurisdiction, business activity, office type, and visa needs. While Dubai offers affordable packages, it’s important to budget for hidden costs like approvals, documentation, and bank fees. The timeline can range from a few days to a few weeks based on complexity.

10. Hire a Professional Consultant

Navigating the process of company formation in Dubai can be overwhelming, especially if you’re a first-time entrepreneur or based overseas. Working with a professional business setup consultant helps ensure you meet all legal requirements, choose the right structure, and avoid costly mistakes.

Final Thoughts

Dubai offers endless opportunities for entrepreneurs and investors—but only if the setup is done right. By understanding the essentials before starting your company formation in Dubai, you’ll save time, money, and avoid common pitfalls that many newcomers face.

Need Help Setting Up Your Company in Dubai?

If you're based in the UK and planning to launch your business in the UAE, Avyanco UK Limited is here to help. We specialize in helping British entrepreneurs set up companies in Dubai with end-to-end support—from business planning to license approval, visa assistance, and banking.

Contact Avyanco UK today for a free consultation and start your Dubai business journey with confidence!