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Start a Business in Dubai – Your Step-by-Step Guide to a Hassle-Free Business

how to start a business in Dubai
Table of Contents

Starting a business in Dubai is just beginning; much effort, planning, research, and actions must occur to transform your business dreams into reality. It would be best to have detailed step-by-step action plans that convert your small startup business into an incredible success without any hassle of paperwork or worrying about losing money in penalties.

Our business setup experts have written this guide to help you with every stage of building a profitable business from scratch. This guide is written based on the fact that starting a business in Dubai or anywhere in the world consists of two phases – 1. Pre-Registration 2. Post Registration. I know it is difficult to understand or define pre or post-registration of your business, but to give you a brief idea, imagine Pre-Registration as steps or actions you must take to register your business, which involves planning, taking approvals, license, documentation, etc. and Post-registration as steps which will help you to grow and run your business in compliant to Government rules and compliance regulations. It will allow you to avoid unnecessary penalties and get recognized as an authentic and trusted registered business. 

Let’s dive into the step-by-step guide and understand how to start a business in Dubai without hassle and unnecessary penalties.

Phase 1: How To Start a Business in Dubai From Registration Process to Getting a Bank Account?

To start a business in Dubai, you need to follow multiple steps and believe me; it could be daunting if this is your first entrepreneurial journey. I would say ask for help if you are a beginner or read this step-by-step guide to avoid making any mistakes:

1. Refine Your Business Idea

Before you take the plunge to start a business in Dubai, you must have a clear understanding of your business idea and your target audience. Ask yourself, what product or service I want to provide? Where is my audience, inside or outside of UAE? Am I dealing with Business or directly with consumers? And many more. A vague business idea will not assist you in establishing your business goals. If you don’t have a clear idea, then I recommend following the below steps:

a. Do Market Research

This step helps you identify the winning strategy. This is where business owners get to identify their target market. Once you research your industry, it will be easier for you to penetrate the market and come up with appropriate tactics and marketing strategies. Always ensure you research your market first and sort out your market’s hobbies, interests, likes, and dislikes before setting up a business. Also, with this study, you can identify and fill the gap with the most appropriate products and strategies. Now you have your product/service and your target market with you, so let’s go onto the next question, i.e., How and to whom will you sell your product or services?

b. Create a Business Plan

After you have done the market analysis, now is the time to prepare your business plan, which will help us know how we will earn, what our business model is, and to whom we will sell our products or services. Preparing a business model canvas is the best way to answer this question. It will help you find a working model of your business, but on paper. From business operations to business transactions, everything is measured while drafting this business model canvas (visual representation of your business plan). Ensure that your business plan includes the idea in detail, the problem the business is trying to resolve, the pitch for the investors, the benefits for them, target audiences, marketing strategies, SWOT analysis, environmental analysis, and complete financial projections.

Once you prepare this plan, you are good to go ahead and register a business in the UAE smoothly.

2. Determine Your Business Activity and Jurisdictions

The important step to register a business in Dubai is determining your business activity(which we already figured out in the first step). While registering your business, You have to figure out the similar activity we finalized in step one from the list drafted by UAE Mainland or Freezone Authorities. The UAE offers access to trade licences for more than 2,000 business activities. However, you must be very careful with this step as various business activities also have specific trade licence requirements. Hence, determining your business activity is crucial from both compliance and strategic point of view.

After consulting a specialist to register your business, you will have to specifically decide in which jurisdiction you want to operate(i.e., Where you want to sell your product, i.e., Freezone or Mainland?). The free zone trades in the international markets or outside of the UAE. Also, business owners operating in the free zone can deal with the companies in the same free zone.

On the other hand, if a business owner wants to set up their roots on the mainland, that means that they want to enter the local market and trade within or outside the UAE. Those who want to provide services to the UAE can get exposure to several opportunities. More importantly, foreign nationals can get 100% ownership of their company in UAE as per the recent amendment law no 2 of 2015.

However, both of these options have a unique set of requirements to start a business and have their own pros and cons. Based on what you require, who you want to trade with, what your products/services are, and where you would launch your business (Which you already figured out in Step 1), you can determine your business activity and jurisdiction to start a business in Dubai.

3. Find a Business Name: Naming Rules and Requirements in Dubai

One of the most challenging pieces of the business puzzle is selecting a brand name for your business. The brand name assists your customers in remembering your entity and is considered the brand identity of your business. Your business name is a part of your entity that develops your brand identity and entire visual image. Business owners must keep a few things in mind while deciding on a name.

Here are the factors that entrepreneurs must consider:

  • No contradictory name or activity
  • Unreserved or non-copyrighted name
  • No obscene or indecent word
  • No God’s name or his divine attributes

Choosing the legal form or company structure is one of the most important decisions in a business journey. With the legal form, business owners can form the structure for dealing with profits and losses and how to organize their assets and resources. Entrepreneurs must ensure that they decide on the company’s legal structure initially only. This will assist the entrepreneurs in getting a business legal structure and applying it to their entity. Some famous legal forms include sole established, limited liability company (LLC), local company branch, free zone company, holding company, a branch of a foreign company, civil company, and others.

5. Select a Physical or Virtual Office: [Ejari: Tenancy agreement]

Nowadays, businesses can be established in two ways, either physically or virtually. Business owners must decide about their stores if they want to operate physically. However, virtual or online firms are making millions in Dubai these days. Once business owners decide how they want to operate, they must sign the contract, Ejari. The term means “my rent” in Arabic. This is a mandatory contract/agreement between the parties that is not limited to the initial rent contract registration. It involves a wide variety of services, including registration, transfers, cancellations, and termination of rental contracts.

6. Get Your Trade License

After finalising everything, you must submit your application in the concerned jurisdiction, either the mainland or the free zone, pay the license fee, and complete the process to obtain your trade license. 

The process of registering a business license in UAE includes the following: 

  1. Initial Approval
  2. Trade Name Reservation
  3. Get external Approvals (If required)
  4. MOA Signing 
  5. Ejari Issuance (Virtual and Physical Office)
  6. Acquire your trade license.

You will receive your legal documentation as soon as you have paid for the legal services. With them in your hand, you will be good to proceed further with other aspects of your business, such as the recruiting team and choosing the right fit for the job. Getting a trade license in Dubai will allow you to work legally in the UAE.

Once you get your trade license, the registering business process is completed.

7. Get Your Visa

Make sure that you get your visa to start a business in Dubai. You can contact Avyanco experts to get access to your visa. Note that you require a visa for your employees, spouse, and family members if you plan to bring them all here. Before issuing any visa under the company investor, one must get registration of the company in the immigration department labour department.

8. Open a Corporate Bank Account

The UAE’s strict money laundering rules make it very hard for entrepreneurs to access corporate banking facilities. However, the process can be smooth if you contact a seasoned expert like Avyanco. All bank account formalities and the required documents will be given by the customer only. If any rejection of the corporate bank account of the company, Avyanco is not responsible for the outcomes.

Phase 2: How do you run your business in compliance with Dubai rules and regulations?

As we all know, corporate tax in the UAE is already effective, and UAE business transactions are no longer tax-free. We must comply with Dubai’s financial compliance requirements to avoid penalties. The below steps will give you an in-depth insight into everything you need to follow to run your business smoothly and avoid any unnecessary fines or penalties to grow your business by getting your first customer.

a. Check Dubai Financial Compliance Regulations

As a foreigner, you may need to be fully aware of the Dubai or Middle East rules and regulations; therefore, you must ensure hiring someone who has been in the field for years. Companies like Avyanco can assist you in understanding the city laws and complying with your business setup’s rules and regulations of the city. You need to check yearly financial compliance in UAE to avoid any penalties so that you will not have an interruption in operations to run a business in Dubai correctly.

a.1. VAT Registration

A value-added tax is levied on the consumption of goods and services. The UAE offers several tax-free business zones, making it an attractive region for local and foreign business owners. Under the VAT law in the UAE, the rate is between 0% and 5% for business owners. Since VAT is a prerequisite for establishing any business in Dubai, whether it is large or an SME, certain conditions apply, and VAT registration in Dubai includes a few more important and tedious measures. So, it is good to always hire an expert for VAT registration.

a.2. Corporate Tax Registration

With effect from 1st June 2023, all businesses in the UAE will be required to register for corporate tax. Businesses with a total taxable income of less than AED 365,000 are not liable for corporate tax registration. The current corporate tax rate is fixed at 9% for businesses registered in the UAE. For MNCs with significantly high turnover, the tax rate will be different. If you are eligible for corporate tax, you must register with the Federal Tax Authority. To leverage tax incentives and optimisation, it is recommended to engage a consultancy firm. Avyanco’s corporate tax specialists can help you properly structure your business to save tax legally.

b. Find a Good Accounting and Bookkeeping System

In addition to the abovementioned steps, all business owners require financial assistance. Someone who can oversee the complete financial aspects such as income statements, balance sheets, and other taxation matters. With Avyanco’s expert bookkeeping and accounting services, business owners need not worry because we maintain records according to the IFRS standards. These experts are certified by authentic institutes and have years of experience in handling financial matters with ease. Therefore, business owners who plan to start a business in Dubai can contact them today.

c. Promote your Business

Always choose the right strategies to promote your business and its services. If you cannot do so, consult a team of marketing experts who can assist you in devising and executing strategies to help you achieve your goals and better results. Make sure that you promote your business using all the platforms and the right tactics. Whenever you start a business in Dubai, you do not have to worry because the Avyanco marketing team can assist you in promoting your business.

c.1. Create a Website

Once you finish the legalities, you need to focus on your business. Develop a suitable website that will be your online identity. You must have a site that distinguishes you from others and assists your audience in finding you. These days, websites are made to generate online sales. If your business is of that type that can have online sales, make sure that you find suitable developers to create a good, user-friendly site.

c.2. Secure Social Media Accounts

A business that is not on social media will always be left behind in this age. Therefore, whether you have an industrial, manufacturing, marketing, financial, or any other sector business, you must have well-maintained social media accounts. With social media, you must maintain all the platforms, such as Facebook, Instagram, LinkedIn, and other relevant platforms if appropriate. This will help you start a business in Dubai with proper social media marketing.

d. Improve your Sales Skills

You should always work on improving your sales skills and business operations. If you have achieved a milestone before, make sure that you seek a better and more lucrative one. If you need to improve your sales skills, hire an expert and enthusiast who can do the job for your business.

e. Find Great Partners and Vendors

Vendors and partners that can assist business owners, in the long run, can definitely reach the entity’s new heights. Such partners and vendors profit the company in many ways. So, always find credible vendors and avoid falling into the trap of fake people. It is always recommended to research partners even before you decide to open a business in Dubai because they could help you scale up your business.

Image representing benefits of setting up a business in Dubai

How Can Avyanco Help You Open a Business in Dubai?

Avyanco, the seasoned business setup service provider, answers all entrepreneurs asking “how to start a business in Dubai.” We can assist business owners in establishing companies in the mainland and free zones. Providing multiple business setup services, potential entrepreneurs can reach out to Avyanco business setup today and avail services at reasonable rates.


About the Author


Jashvantkumar Prajapati

(Founder and CEO of Avyanco Group of Companies; Business Setup Consultancy, Avyanco Tax and Accounting LLC, and Avyanco Auditing LLC.)

He keeps a varied portfolio with core expertise in investment management, corporate structuring, commercial law, business consultancy, lead management, business planning and market research. Aspire to help potential entrepreneurs and investors to come ahead and form their companies in highly emerging economies like UAE.