Setting Up a Business in Dubai? A Step-by-Step Guide for UK Residents
Thinking about launching a business in Dubai? You’re not alone.
There has been an unprecedented surge in UK residents relocating to the UAE, with brand-new research revealing a 420% increase in enquiries from British nationals over the last five years. In the past 12 months alone, this number rose by 45%.
Online searches for ‘move to Dubai’ and ‘jobs in Dubai’ have jumped by 50% year-on-year, showing just how many Brits are looking eastward.
According to the Expat Insider 2023 report, the UAE is the third-most-popular country in the world for expatriates. And it’s not just for individuals, over 5,000 British companies are now operating in the UAE. With over 240,000 British nationals living in Dubai, the city has firmly established itself as the UK’s business gateway to the Gulf.
Whether you’re expanding a UK company or starting fresh, this guide walks you through the step-by-step process of setting up a business in Dubai, specifically for UK residents.
Why Dubai?
Dubai’s appeal goes beyond skyscrapers and sunshine. For UK entrepreneurs and professionals, it offers:
- 0% personal income tax
- Corporate tax capped at 9% for most companies
- Lower living costs—consumer prices are 20.6% lower than in London
- World-class infrastructure and digital readiness
- English-friendly legal and business environment
- Strategic location for access to Asia, Europe, and Africa
Dubai’s population as of 2025 is estimated at 3.9 million, and 92% of that population is made up of expatriates, roughly 3.5 million people. You won’t be alone setting up shop here.
Step 1: Choose Your Jurisdiction – Mainland, Free Zone, or Offshore
This is the foundation of your Dubai business. Your choice determines how your company operates, where it can trade, and what type of ownership is allowed.
1. Mainland Company (Onshore)
A Mainland company allows you to trade anywhere in the UAE, including with government entities. In the past, foreign investors were required to have a local partner holding 51% of shares—but as of 2021, many business activities now allow 100% foreign ownership.
Best for:
- Service-based businesses targeting the UAE market
- Physical retail outlets, hospitality, or real estate services
2. Free Zone Company
There are over 40 Free Zones across Dubai, each catering to specific industries like media, finance, logistics, or tech. These offer attractive benefits:
- 100% foreign ownership
- Zero customs duties within the Free Zone
- Fast-track setup and visa processing
- No need for a local sponsor
Drawback: You cannot directly trade with the UAE mainland unless you appoint a local distributor or open a mainland branch.
Best for:
- E-commerce, consulting, or export-based businesses
- Startups with international clients
3. Offshore Company
These are used for holding assets, intellectual property, or acting as parent entities. Offshore companies cannot lease office space, hire locally, or trade within the UAE.
Best for:
- Holding structures or IP ownership
- Confidential asset management
Step 2: Define Your Business Activity
The UAE requires all companies to list a specific licensed business activity. Activities range from IT consultancy and financial services to bakery operations or digital marketing.
This is not just admin—it affects:
- The type of licence you’ll need
- Office space requirements
- Visa eligibility
- Whether 100% foreign ownership applies
You must select your activity from the approved list issued by either the Department of Economic Development (DED) or the Free Zone authority.
Example:
If you plan to offer software development services, your business activity must match precisely. Trying to operate outside your licence scope can lead to fines or business suspension.
Step 3: Reserve a Company Name
Naming a business in Dubai is more regulated than in the UK.
Your name must:
- Reflect your licensed activity (if required)
- Avoid religious or political terms
- Not use initials for personal names (e.g. “J.S. Consulting” isn’t allowed)
- Be available and not already in use
Names are reserved for a limited period, so timing is important. MAR Legal works with clients to ensure names are properly reserved and compliant.
Step 4: Apply for Initial Approval
This is your pre-licensing green light. It confirms that the government has no objection to your proposed business.
You’ll usually need to provide:
- Passport copies of all shareholders and directors
- A brief business plan (some Free Zones only)
- No Objection Certificate (NOC) if you’re already a UAE resident on a visa
Initial approval is valid for 6 months and is non-renewable.
Step 5: Draft and Notarise Legal Documents
These documents include:
- Memorandum of Association (MoA) – laying out ownership, structure, and activity
- Local Service Agent Agreement – required for some professional licences
- Office lease agreement – especially for mainland and certain Free Zone businesses
All documents must be translated into Arabic and notarised. MAR Legal helps UK clients ensure compliance across both UAE and UK standards, working alongside trusted local partners.
Step 6: Secure Office Space or Flexi-Desk
- Mainland businesses must rent a physical office (typically minimum 200 sq ft)
- Free Zones may allow virtual or shared desks (“flexi-desk”) as part of the licence
Office space is linked to your visa quota. The more space you lease, the more visas you can obtain.
Step 7: Obtain Your Trade Licence
Once legal documents and office space are confirmed, your trade licence will be issued. This is your official right to operate in Dubai.
Types of licences include:
- Professional Licence – for consultancies, marketing, and services
- Commercial Licence – for trading and retail
- Industrial Licence – for manufacturing and processing
Licence fees vary: A small consultancy in a Free Zone may pay AED 12,000–AED 20,000 per year. Larger operations in the Mainland can exceed AED 50,000.
Step 8: Visa Processing
Your new company is now eligible to apply for residency visas for:
- The business owner(s)
- Employees
- Dependants (spouse, children, sometimes parents)
The process includes:
- Entry permit
- Medical exam
- Emirates ID application
- Visa stamping in passport
Example:
A solo consultant working from a flexi-desk in Dubai Internet City may sponsor themselves and a spouse with no issues.
Step 9: Open a Corporate Bank Account
This step is often the most delayed due to enhanced due diligence. You will need:
- Trade licence
- MoA
- Passport and visa copies
- Utility bills or address proof
- Details of business activity and expected revenue
Popular options include Emirates NBD, Mashreq, ADCB, and RAKBank. Some international banks (e.g. HSBC) also offer UAE business accounts to UK clients.
Step 10: Stay Compliant with UAE Law
In June 2023, the UAE introduced a federal corporate tax of 9% on annual profits exceeding AED 375,000. You are also required to:
- Register for tax with the Federal Tax Authority (FTA)
- File returns annually
- Maintain audited financial accounts
- Renew your trade licence each year
- Comply with UAE’s Economic Substance Regulations if applicable
Failing to comply could result in heavy fines or business closure.
Case Study: A UK Marketing Agency Goes International
Emma and Raj, co-founders of a successful Manchester-based digital agency, set up a Free Zone company in Dubai’s Media City. They retained 100% ownership, used a flexi-desk space to minimise costs, and obtained two residency visas.
MAR Legal advised them on structuring an intercompany agreement to manage billing between the UK and UAE entities, and we liaised with local advisors to ensure tax compliance on both sides.
Within four months, they were operating across two continents with a global client base.
Common Pitfalls to Avoid When Setting Up a Business in Dubai
- Choosing the wrong business structure or Free Zone
- Not understanding tax liability as a UK resident
- Inadequate IP protection between UAE and UK entities
- Signing lease agreements without legal review
- Using non-compliant contracts or service agreements
- Assuming your UK will applies in the UAE (it doesn’t)
How MAR Legal Can Help
Expanding to Dubai is exciting—but it must be done correctly. MAR Legal supports UK-based entrepreneurs with:
- Choosing the right setup (Mainland vs Free Zone)
- Drafting compliant agreements in both jurisdictions
- Understanding tax exposure in the UK and UAE
- Advising on visa and ownership structure
- Partnering with vetted UAE-based firms and consultants
- Protecting your assets and interests across borders
We simplify the legal side so you can focus on growing your business.
Ready to Start Your Business in Dubai?
With record numbers of UK residents moving to Dubai and thousands of British businesses already established, the time to act is now. MAR Legal is here to help you take the next step with confidence.
Call 0161 491 3933 or email info@marlegal.co.uk to book a consultation and get your Dubai venture underway.
This blog is for general information only and does not constitute legal advice. Please contact MAR Legal for tailored support based on your circumstances.