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How to Get a Business License in Dubai in 2025: Costs, Steps, and Requirements
Dubai continues to be a leading global business hub thanks to its strategic location, world-class infrastructure and business-friendly environment. The city is ranked 1st in the MENA region for ease of doing business, attracting over 20,000 new companies annually.
Dubai’s tax-free zones, low corporate tax rates (0% in some zones) and commitment to innovation make it a perfect location for entrepreneurs and corporations. The emirate also benefits from its status as a financial, logistics and tourism hub between Europe, Africa and Asia.
Dubai’s tax-free zones, low corporate tax rates (0% in some zones) and commitment to innovation make it a perfect location for entrepreneurs and corporations. The emirate also benefits from its status as a financial, logistics and tourism hub between Europe, Africa and Asia.
Importance of having the right business license
Obtaining the right business license in Dubai 2025 is critical to operate legally, comply with local regulations, and gain access to government benefits. A business license not only protects the owner legally, but also increases the trust of clients and partners. Without the right license, companies risk fines, litigation, and even closure.
The Dubai government offers different licenses (commercial, industrial, professional, and tourism) depending on the type of business, so it is important to choose the right one to ensure smooth operations.
The Dubai government offers different licenses (commercial, industrial, professional, and tourism) depending on the type of business, so it is important to choose the right one to ensure smooth operations.
Brief overview of the costs, steps, and requirements
The cost of starting a business in Dubai depends on the type of license and the location of the business. On average, the cost is between AED 10,000 and AED 50,000, with additional fees for visas, office space, and permits. The process usually includes:
- Selecting the type of activity: Decide on the type of activity (e.g. trading, consulting, manufacturing).
- Selecting the type of licence: Depending on whether the business is commercial, professional or industrial.
- Office space requirements: A physical office is mandatory for most licence types, unless you are setting up in a free zone.
- Applying for a licence: Submit documents such as passport copies, visa status and proof of business activity to the Department of Economic Development (DED) or the relevant authority.
- Visa and employment requirements: Depending on the size of the business, you may need to apply for a work visa.
Understanding Business Licenses in Dubai
Types of business licenses in Dubai
Dubai offers various business licenses tailored to different sectors and needs. Here’s a breakdown:
- Commercial license Dubai: Suitable for trading businesses, this license is for companies involved in the purchase and sale of goods or services.
- Professional license UAE: Suitable for freelancers, consultants, and service providers, allowing them to offer professional services.
- Industrial business license Dubai: For manufacturing companies, this license is required for those who want to manufacture goods.
- Tourism License: Specifically for travel agencies, tour operators, and hospitality-related businesses.
Choosing the Right Business License
Dubai offers three main business structures: mainland, free zone and offshore.
Mainland License
Allows companies to operate anywhere in the UAE and interact with local customers.
Free zone license
Offers tax benefits, 100% ownership for foreign investors and simplified paperwork, but limits business operations to the free zone area.
Offshore license
Suitable for international companies looking to establish a presence in Dubai without physically operating in the region.
Advantages:
Mainland License
Allows companies to operate anywhere in the UAE and interact with local customers.
Free zone license
Offers tax benefits, 100% ownership for foreign investors and simplified paperwork, but limits business operations to the free zone area.
Offshore license
Suitable for international companies looking to establish a presence in Dubai without physically operating in the region.
Advantages:
- Mainland licenses provide access to the local market.
- Free zones offer reduced tax rates and 100% ownership for foreign investors.
- Offshore licenses provide privacy and tax benefits for international companies.
- Choosing the right structure depends on your target market, location and business goals.
Step-by-Step Process to Get a Business License in Dubai
Here’re the steps to get a business license in Dubai.
Step 1: Choose a Business Activity
The business must be on Dubai's approved list of activities. You can choose one activity or multiple activities depending on the type of business you are running. Dubai offers over 2,100 approved activities, so choosing the right one is critical to your license.
Step 2: Select a Business Location
Decide between mainland, free zone or offshore. Mainland provides greater market access, free zones provide tax incentives and 100% foreign ownership, while offshore is for international businesses not physically operating in Dubai. The choice affects licensing requirements and ownership rules.
Step 3: Choose a Business Name
Follow Dubai's naming rules. The title must not contain offensive or political terms, and cannot refer to religious connotations. It should also match the type of activity you plan to do.
Step 4: Apply for Initial Approval
Apply for initial approval. For mainland businesses, you submit your application through the Department of Economic Development (DED). Free zone businesses apply through the relevant free zone authority.
Step 5: Prepare Required Document
Gather the necessary documents such as copies of shareholders' passports, business plan (for certain licenses) and Ejari (lease agreement) for the office space.
Step 6: Submit Application & Pay Fees
Submit your application along with the required documents. Business license fees vary depending on the type of business, location, and size of the business. The approval process usually takes 2 to 4 weeks.
Step 7: Obtain Trade License & Register for VAT (if applicable)
Once approved, you will receive a trade license. If your annual revenue exceeds AED 375,000, VAT registration is mandatory. The government requires VAT registration for businesses operating in the Dubai economy.
This plan ensures that you can launch your business quickly and legally while complying with Dubai's regulatory framework.
This plan ensures that you can launch your business quickly and legally while complying with Dubai's regulatory framework.
Cost Breakdown for Getting a Business License in Dubai 2025
The cost of obtaining a business license in Dubai varies depending on several factors such as location, license type, and business requirements. Below is a breakdown of the main costs:
Business License Fees (Mainland vs Free Zone)
What is the cost of a business license in Dubai? Mainland vs Free Zone business Dubai.
Mainland: Fees range from AED 10,000 to AED 20,000 depending on the type of activity and the size of the company. Additional costs for permits and approvals may apply.
Free Zone: Usually AED 12,000 to AED 25,000, including setup costs. Free zones offer benefits such as 100% foreign ownership and tax exemptions, but fees may vary depending on the free zone and the number of activities.
Mainland: Fees range from AED 10,000 to AED 20,000 depending on the type of activity and the size of the company. Additional costs for permits and approvals may apply.
Free Zone: Usually AED 12,000 to AED 25,000, including setup costs. Free zones offer benefits such as 100% foreign ownership and tax exemptions, but fees may vary depending on the free zone and the number of activities.
Office Space Costs (Mandatory for some license types)
Office space is a requirement for some business licenses, especially on the mainland. Costs range from AED 15,000 to AED 50,000 per year, depending on the size and location of the office. In free zones, many offer flexible workspace or virtual office options, which can cost between AED 5,000 and AED 15,000 per year.
Visa & Immigration Fees
Dubai business visa fee is approximately AED 3,000-6,000 per employee or shareholder. This includes the cost of residence visas and work permits. Additional fees may apply for family visas, health insurance, and other related services.
Sponsorship Costs (if needed)
For mainland businesses, you may need a local sponsor, which costs between AED 5,000 and AED 15,000 per year. Some free zones allow 100% foreign ownership, so there is no need for a sponsor.
Additional Fees (PRO services, notarization, approvals)
PRO (Public Relations Officer) Services: Typically AED 2,000 to AED 5,000 for document processing, approvals, and other government services.
Notarization: Notarization of legal documents can cost around AED 500 to AED 1,500 depending on the documents involved. Overall, the total cost of getting a business license in Dubai can range from AED 15,000 to AED 50,000 depending on the type of your business, location, and additional requirements.
Notarization: Notarization of legal documents can cost around AED 500 to AED 1,500 depending on the documents involved. Overall, the total cost of getting a business license in Dubai can range from AED 15,000 to AED 50,000 depending on the type of your business, location, and additional requirements.
Requirements for Business Licensing in Dubai
What are Dubai business setup requirements and business setup costs? Opening a business in Dubai requires you to meet certain legal and regulatory standards, which vary depending on the structure and location of your business. Here is a breakdown of them:
Legal structure requirements (sole proprietorship, LLC, branch office, etc.)
The choice of legal structure affects your business license. Common structures include:
- Sole proprietorship: suitable for sole proprietors offering professional services (e.g. freelancers).
- Limited Liability Company (LLC): the most common structure for small and medium-sized businesses, where liability is limited to the amount invested in the company.
- Branch: a foreign company can set up a branch to operate in Dubai with the same business activities as the parent company.
- Free Zone Entity: offers 100% foreign ownership and tax advantages, but limits operations to the free zone area.
Share capital requirements (if applicable)
For LLCs, the minimum share capital varies by emirate, but generally starts at AED 300,000.
In free zones, the share capital can be as low as AED 10,000, depending on the free zone and the type of business.
Branches generally do not require share capital, but must be financially in line with the parent company.
In free zones, the share capital can be as low as AED 10,000, depending on the free zone and the type of business.
Branches generally do not require share capital, but must be financially in line with the parent company.
Office rental and leasing regulations
Most licenses, especially mainland and LLC, require companies to have physical office space. Office rentals in Dubai can range from AED 15,000 to AED 50,000 per year. Free zones often offer more flexible options such as virtual offices or shared workspaces at lower rates (AED 5,000 to AED 15,000).
Bank account setup and compliance rules
Opening a business bank account is mandatory. Business registration in Dubai is a key step. Banks require company registration documents, a trading license, details of shareholders, and a business plan.
Compliance rules include anti-money laundering (AML) rules and confirming the legality of the company's existence. Initial deposits for business accounts are typically between AED 10,000 and AED 50,000, depending on the bank.
These requirements help ensure that businesses in Dubai comply with local laws while benefiting from the city’s favorable economic environment.
Compliance rules include anti-money laundering (AML) rules and confirming the legality of the company's existence. Initial deposits for business accounts are typically between AED 10,000 and AED 50,000, depending on the bank.
These requirements help ensure that businesses in Dubai comply with local laws while benefiting from the city’s favorable economic environment.
Common Mistakes to Avoid When Applying
Starting a business in Dubai can be profitable, but there are some common mistakes that can delay or complicate the process. Here are the main mistakes you should avoid:
Choosing the wrong license type
One of the most common mistakes is choosing the wrong business license. Whether you choose a commercial, professional, industrial, or travel license, make sure it matches your business. Choosing the wrong one can result in fines, delays, or rejection of your application.
Not checking for necessary approvals
Before applying for a business license, it is important to check whether additional permits are required. For example, some activities may require approval from certain authorities, such as the Department of Health or the Ministry of Economy.
Miscalculating setup costs
Many people underestimate the overall cost of setting up, including office space, licensing fees, and additional services. For example, although a Dubai free zone license may initially seem cost-effective, additional fees for visa processing, office rent and permits may be beyond your budget. So, you need to take into account all potential costs into your budget.
Missing deadlines for renewals
Dubai business licenses are usually valid for one year, and failure to renew on time can result in fines or suspension of your business. Setting renewal reminders and keeping track of your license expiration date will help you avoid unnecessary expenses and administrative hassle.
Avoiding these mistakes will ensure a smoother and faster licensing process and help your business on its way to success in Dubai.
Avoiding these mistakes will ensure a smoother and faster licensing process and help your business on its way to success in Dubai.
Conclusion
To successfully obtain a business license in Dubai, follow these basic steps:
For entrepreneurs in 2025, it is extremely important to stay abreast of changes in regulations and market trends. The UAE is becoming increasingly digital, so consider using technology solutions to improve efficiency. Do your research carefully to choose the right business license and legal structure to avoid costly mistakes.
- Select your activity: Make sure your activity matches Dubai's approved list.
- Choose your business location: Choose mainland, free zone or offshore depending on your business needs.
- Choose a business name: Follow Dubai naming rules and make sure there is nothing prohibited.
- Apply for pre-approval: Submit your application to the relevant authority (DED for mainland, free zone authorities for free zones).
- Prepare the necessary documents: Gather the necessary documents such as passport copies, business plan, and Ejari for office space.
- Submit the application and pay the fees: Submit the application and pay the associated fees (AED 10,000 to AED 50,000 or more).
- Proceed with the Dubai trade license process, obtain it and VAT registration:
- Complete the approvals and register for VAT if your business meets the threshold.
For entrepreneurs in 2025, it is extremely important to stay abreast of changes in regulations and market trends. The UAE is becoming increasingly digital, so consider using technology solutions to improve efficiency. Do your research carefully to choose the right business license and legal structure to avoid costly mistakes.
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