The UAE has become one of the most attractive destinations for foreign investors, thanks to its 0% personal income tax, world-class infrastructure, and 100% foreign ownership laws. In 2025, setting up a company in Dubai or anywhere in the UAE is faster and more accessible than ever before.
But if you’re a foreigner, the process can feel overwhelming without the right guidance. In this blog, we’ll walk you through a clear step-by-step guide to starting a business in the UAE as a foreigner.
Step 1: Choose Mainland, Free Zone, or Offshore Company
Before you begin, you need to decide where to register your business.
- Mainland: Operate anywhere in the UAE + globally. Eligible for government contracts and local trade.
- Free Zone: 100% foreign ownership, tax exemptions, and cost-effective setup, but limited direct trade within UAE without a distributor.
- Offshore: Best for holding companies, asset management, and international business. Not allowed to trade directly in UAE.
👉 Pro Tip: If your goal is to scale and trade within UAE, mainland is the best choice. For exports and global trade, free zone offers maximum benefits.
Step 2: Select Your Business Activity
The UAE allows over 2,000+ business activities, from e-commerce and consultancy to trading and tech services. Your chosen activity will determine:
- The type of license you need (Commercial, Professional, or Industrial).
- The authority you must register with.
Any additional approvals required (for regulated sectors like finance, healthcare, or education).
Step 3: Choose a Trade Name
Your business name should comply with UAE’s naming conventions:
- No offensive or religious words.
- Must reflect your business activity.
- Should not duplicate an existing registered name.
- English & Arabic versions may be required.
Step 4: Apply for a Trade License
A trade license is your official permit to operate. Depending on your setup, this can be issued by:
- DED (Department of Economic Development) for mainland.
- Relevant Free Zone Authority for free zones.
Types of licenses:
- Commercial License – for trading activities.
- Professional License – for services and consultancy.
- Industrial License – for manufacturing and production.
Step 5: Arrange Office Space
- Mainland: Requires physical office space (size depends on visa quota).
- Free Zone: Options include flexi-desks, shared offices, or private offices.
- Some zones even allow virtual offices for startups.
Step 6: Apply for Visas
As a foreign investor, you’ll need a UAE residency visa. You can also sponsor:
- Employee visas.
- Family/dependent visas.
- Domestic staff visas.
👉 Visa quota depends on your office size and license type.
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Step 7: Open a Corporate Bank Account
Opening a UAE bank account as a foreigner can be tricky due to strict compliance requirements. You’ll need:
- Trade license.
- Shareholder documents.
- Passport copies.
- Business plan (in some cases).
At KARM Business, we assist with choosing the right bank and ensuring your application is approved smoothly.
Step 8: Stay Compliant
Once your business is up and running, you must stay compliant with:
- UAE Corporate Tax (9%) for qualifying businesses (some exemptions apply).
- VAT (5%) if annual turnover exceeds AED 375,000.
- Annual license renewals.
- Employee contracts and WPS compliance.
How Long Does It Take?
With proper documentation, you can set up a business in as little as 3–7 working days in most free zones, while mainland companies may take slightly longer depending on approvals.
Conclusion
Starting a business in the UAE as a foreigner in 2025 is straightforward if you follow the right steps. The key is choosing the right structure, handling paperwork correctly, and ensuring compliance with UAE laws.
At KARM Business, we make the process stress-free — from trade license and visas to banking and compliance — so you can focus on building your dream business.
👉 Ready to set up your company in Dubai? Let KARM Business be your trusted partner.
Thanks for providing such a helpful and timely resource! I’m looking forward to reading more of your insights. I hope this is helpful! Let me know if you’d like me to make any adjustments or provide additional options.