If you are looking for a top destination to start a small business in, Dubai should definitely be at the top of your list. As one of the most entrepreneur-friendly places in the world, it provides simplified business processes and a multitude of opportunities for startups and small businesses. In this guide we will not only take you through all the steps you have to take to start a small business in Dubai, but also have a closer look at the jurisdictions you need to choose between, the documents you require, and the expenses you have to budget for.
Why Dubai is ideal for small businesses
There are many reasons why Dubai is ideal for small businesses. Some of the biggest advantages the city offers to entrepreneurs stem from its superb geographical location, tax benefits, and the support offered to businesses by the government. Small business owners will profit from 0% personal tax as well as 0% corporate tax in many free zones. Even small businesses that are established on the mainland only pay 9% corporate tax on profits exceeding AED 375,000. Additionally, Dubai’s state-of-the-art infrastructure and global connectivity make it easy for small businesses to grow quickly and organically.
How to start a small business in Dubai
You can start a small business in Dubai by selecting your business activity, choosing a legal structure, deciding whether to set up on the mainland or in a free zone, and applying for the correct trade license. The process involves reserving your trade name, submitting the required documents, paying the licensing fees, and receiving your business license so you can legally operate in the UAE.
Step-by-step process to register your small business in Dubai
Here is a breakdown of the steps you need to follow when registering your small business in Dubai.
Step 1. Plan your business
If you want your business to be successful, you need to plan it properly. This includes doing research into the opportunities that exist and the competitors you will have to contend with. You will also have to clearly define exactly what you will do and solidify your choice by choosing the closest related activity from the DET List or one supplied by the relevant free zone authority. Also decide whether you will set up your business on the mainland or in one of Dubai’s free zones.
Step 2. Decide on a legal structure
Picking the right legal structure for your business is one of the most important things you have to do during the early stages of the set up process. There are many reasons why this decision matters so much. Apart from directly impacting the ownership and control of your business, its legal structure also defines your liability, determines where you can and can’t trade, and influences everything from your cost and setup requirements to your visa requirements and compliance responsibilities. Popular legal structures for small business include sole proprietorships, LLCs, and free zone entities.
Step 3. Choose a name for your business
Take your time when choosing a trade name for your business. Make sure it is one-of-a-kind and relevant to your business activities. It also needs to meet all the naming requirements of the DET and be free of any words and phrases that are religious or may be perceived as offensive.
Step 4. Obtain initial approvals
Before you can continue with the registration process, you have to get initial approval from the DET or free zone authority.
Step 5. Secure your business license
Once initial approvals are granted, you can pay the fees and obtain your trade license. This will allow you to legally operate your business in Dubai.
Step 6. Apply for visas
Apply for an investor visa and worker visas as required. Many visas depend on your office space size and business type.
Step 7. Open a corporate bank account
With your trade license active, apply for a UAE business bank account to handle financial operations. There are many reputable financial institutions in Dubai to choose from.
Choose between Free Zone or Mainland for your small business
There are advantages and disadvantages to both mainland and free zone business setups. A free zone setup will be ideal if you are looking for full foreign ownership and repatriation of profits, a simple setup, and if your business operations are centered around exports or online services.
If you want to access the UAE market beyond Dubai and need to apply for government contracts, you need to establish your business on the mainland. As a mainland company, you will have unrestricted access to all seven emirates.
Cost, ownership, and operational scope differ between the two, so evaluate based on your long-term goals and where your customers are located.
Cost of opening a small business in Dubai
How much it will cost to start a small business in Dubai depends on various things like the type of license you are applying for, your chosen jurisdiction, and your office and staffing requirements. Here is a breakdown of what costs you might incur:
- Trade license fees can range between AED 7,000–AED 30,000, depending on the nature of your business.
- Visa costs are generally between AED 3,500 and AED 7,500 each
- Name reservation & approvals can set you back between AED 620 and AED 1,200
- Office rental/Ejari contract is calculated at between AED 5,000 and AED 30,000
- Bank account & setup fees vary by bank and account type
If you are setting up your business in a free zone, you will benefit from a set free zone package that is usually considerably cheaper than other available options.
What documents are needed to open a small business in Dubai
When registering a new small business in Dubai, you need to compile and submit a series of documents. This includes your application forms, clear copies of the passports of all shareholders and a copy of your UAE visa, if you are in possession of one. You will also have to submit your trade name reservation certificate and the initial approval received from either the DET or free zone authority. Other required documents include a Memorandum of Association (MoA), Ejari tenancy contract or flexi-desk agreement.
Popular business ideas for small business owners in the UAE
Here are a few popular business ideas to consider if you want to start your own small business in the UAE:
- E-commerce stores and professional consultancy services
- Digital marketing service providers and content creation services
- Event planning and coordination, specialist food businesses, catering
- Delivery and logistics support
- Fitness and personal training services
- Web and app development
- Cleaning and maintenance services
These businesses generally need a modest initial investment and meet the current market demand in the UAE.
Do you need a physical office to start a small business in Dubai?
A physical office is not always needed when starting a small business in Dubai. Depending on the nature of your business, you can make use of a virtual office or flexi-desk in one of the free zones in the city. Although mainland regulations often require a business to have a physical office, the nature of your business will ultimately determine whether you can make use of flexible office solutions.
Frequently asked questions
Can I start a small business in Dubai with low investment?
Yes, many businesses can be started with a minimal investment. If you are setting up your business in a free zone, you can start your business using an affordable setup package.
How much does it cost to register a small business in the UAE?
It generally costs between AED 7,000 and AED 30,000 to start a small business in Dubai. The actual cost will depend on your actual setup needs.
Can expats fully own their business in Dubai?
Yes, expats can fully own their small businesses in free zones and most mainland sectors in the UAE.
Which free zone is best for small business setup?
Your chosen business activity will determine which free zone is best-suited to your small business. If you are going to be operating in the tech or media sectors, Dubai Media City, Dubai Internet City, and IFZA are all good choices.
How long does the business setup process take?
With complete documentation, many setups can be completed in as little as 1–3 weeks, depending on approvals and office arrangements.
About Set Hub
While starting a small business in Dubai may be a dream come true, you might not be comfortable navigating the journey on your own. Luckily, our dedicated, multilingual team has been helping entrepreneurs just like you successfully set up their businesses for more than a decade. Reach out to us today if you want help with your business setup in Dubai.