In last week’s article, we discussed how Dubai has become a common hub for global investors. This week, we’ll focus on one of the most critical decisions investors must make when establishing a business in the Emirate: choosing the right type of company that aligns with their business goals. We've compiled essential information to help you navigate this process.
The company formation process in Dubai generally includes the following steps:
Business Plan Preparation: A clear business plan outlining your vision, mission, and roadmap is essential.
Legal Requirements and Documentation: Required documents typically include a passport, photo, business plan, and application forms.
Company Name and Licensing: The company name must comply with Dubai's naming rules, and an appropriate business license must be obtained based on your activity.
Free Zone / Mainland / Offshore Selection: Choose the most advantageous company structure for your needs.
Professional Consultancy: Hiring experts can help streamline the process and avoid costly mistakes.
Bank Account Opening: After incorporation, you’ll need to open a local business bank account.
Visa and Immigration Procedures: Work visas must be obtained for company owners and employees.
The main types of business entities available in Dubai include:
Mainland Companies: Ideal for trading directly in the local market. They can operate anywhere in Dubai. While the 51% local partner requirement has been lifted in many sectors, it may still apply in some. In general, 100% foreign ownership is now permitted.
Free Zone Companies: Operate in special economic zones and benefit from exemptions on import/export duties, 100% foreign ownership, tax incentives, and simplified regulations.
Offshore Companies: Used for international business and asset protection. They cannot conduct commercial activity within Dubai and have no physical presence in the UAE. They offer significant tax benefits.
Although less attractive for foreign investors, sole proprietorships are also allowed in Dubai. These are owned and operated by a single individual. Only UAE and GCC nationals can establish sole proprietorships with commercial or industrial licenses. Turkish citizens may establish such entities only with a professional license, and they must sign a Local Service Agent Agreement with a UAE national for residency, visa, and work permit purposes.
Free Zone companies offer several advantages:
100% foreign ownership
Exemption from income and corporate tax
Low operating costs
Advanced infrastructure
Simplified setup and operational processes
Easier process for obtaining residence visas for investors and staff
Pros:
Ability to operate across all of Dubai
Direct access to the local market
Cons:
In certain sectors, the 51% local ownership requirement may still apply
To qualify for 100% foreign ownership, applicants may need to meet specific criteria, including substantial capital contribution, use of advanced technology, and employment of UAE nationals. Final approval lies at the discretion of the relevant licensing authority.
Costs vary depending on the company type, sector, office space, and other factors. On average:
Free Zone companies start from AED 15,000
Mainland companies start from AED 25,000
Offshore companies generally range between AED 10,000–15,000
Choose the right legal structure and business type based on your business plan
Research local regulations and licensing requirements
Work with reliable local partners or consultants
Strategic Location: Dubai is a global hub connecting the Middle East, Asia, Europe, and Africa
Tax Advantages: Low corporate tax rates, income tax exemptions, and various Free Zone tax incentives
Foreign Investor-Friendly Environment: 100% foreign ownership, fast setup processes, and pro-business regulations
Advanced Infrastructure: Modern transportation systems, world-class telecom infrastructure, and logistics networks
The UAE offers significant tax benefits for both individuals and businesses. We’ll explore these in detail in next week’s article.
Adapting to local culture and business practices can take time
Market competition is high
Visa and sponsorship procedures may be complex
Although the local partner requirement has been relaxed, it still applies to some sectors
While requirements vary depending on company type and industry, the typical documents include:
Passport copy
Passport-size photo
Business plan
Application forms
We recommend consulting a local expert for guidance tailored to your company type.
Depending on the company structure, sector, and application complexity, the process may take anywhere from a few weeks to a few months.
Dubai offers investment opportunities in diverse sectors including:
Tourism
Real estate
Logistics
Finance
Technology
Trade
Renewable energy
E-commerce
Healthcare
Yes. It is now possible to establish 100% foreign-owned companies in both Free Zones and the Mainland. However, some strategic sectors may still require local ownership.
Until recently, companies in the UAE mainland were required to have 51% UAE national ownership. However, the Foreign Direct Investment (FDI) Law now allows 100% foreign ownership in designated sectors. This change eliminates the need for majority local shareholding or local agents during company registration in many cases.
The new law eases foreign ownership restrictions in sectors listed in the “Positive List”. Strategic sectors like oil & gas, telecommunications, and utilities may still face restrictions. Each Emirate's licensing authority retains discretion on imposing local ownership requirements.
Prior to June 1, 2021, joint stock companies could offer only up to 30% of their shares to the public. With the new regulations, this limit has been raised to 70%.
The new law enhances protections for shareholders, allowing them to take legal action against directors or general managers whose actions harm the company.
Yes. Foreign nationals are now allowed to serve on company boards, and a UAE national is no longer required to chair board meetings.
Yes. Establishing a company in Dubai enables you to apply for a residency visa as an investor. This visa is typically valid for 2–3 years and renewable. Alternatively, the Golden Visa, valid for 2 or 10 years, offers even more benefits.
Yes. Once your company is established, you can open a local business bank account. However, local banks may require a residence permit and have strict compliance procedures. Online banking alternatives may offer more flexibility and allow account setup without residency.
Yes. Navigating the Dubai business setup process can be complex. Professional consultants and law firms can provide invaluable assistance with legal requirements, documentation, and regulatory compliance, ensuring a smooth and efficient setup process.
The UAE is a significant trade partner for Turkey. Turkish exports to the UAE have increased in recent years, and the trade volume continues to grow alongside ongoing mutual investments.
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