Fortunately, Dubai’s economy was deliberately engineered to boost local business growth and innovation. Through the DED, the UAE government not only promotes entrepreneurship but also ensures economy insurance activities, offering incentives like low corporate taxes and easy business setups.

This focus earns the UAE a 16th placement in the global Ease of Doing Business Index. With a dynamic economy, Dubai magnetizes various industries and, thanks to its strategic location, offers access to extensive markets spanning East and West. The city’s free zones, including DWTC, JAFZA, and RAKEZ, amplify opportunities, while initiatives like Scale2Dubai provide funding for scaling ventures.

From a high level, to start a business in Dubai, you’ll want to follow these steps:

• Business Idea: Define your business idea and target market.
• Business Plan: Draft a comprehensive plan detailing objectives, market analysis, and financial projections.
• Legal Structure: Decide between Free Zone, Mainland, or Offshore company structures.
• Trade Name: Pick a name compliant with the Department of Economic Development (DED) regulations.
• Business License: Depending on your activities, apply for a commercial, professional, or industrial license.
• Documentation: Submit required documents like passport, visa, and a No Objection Certificate (for expats) to the relevant authorities.
• Office Space: Secure a physical address, essential for registration.
• Corporate Bank Account: After getting your license, choose a bank that aligns with your business needs and open an account.
• Visas: If hiring, process employee visas. The number is often determined by office size and license type.
• Operational Setup: With administrative tasks done, set up operations and embark on your business journey.

Note: Requirements might vary based on your specific new business setup, so make sure you thoroughly research the next steps for your chosen structure.

Selecting the best business location will require that you consider a myriad of options. We strongly recommend that you engage the services of business setup consultants for these nuanced decisions, however, broadly speaking, you will want to understand:

• Nature of Business: Your business type influences the right location choices; for example, tech businesses often prefer free zones like Dubai Internet City.
• Target Market: Choose a location easily accessible to your primary customers.
• Infrastructure Needs: If international shipping is crucial, being near ports like Jebel Ali Port is advantageous.
• Budget: Rent and operational costs differ across areas, impacting your choice.

Legal Requirements: Specific business activities are zone-restricted, influencing the right business location.

A mainland business setup in the UAE provides unrestricted access to the UAE market, allowing over 3,000 business activities, unlimited employee visas, and the ability to sponsor family and domestic staff. It’s ideal for businesses targeting the local Dubai mainland market. In contrast, a free zone business setup offers 100% foreign ownership, no personal taxes, unrestricted profit movement, and a simplified setup process. This setup is favored by companies focusing on international markets or seeking specific industry clusters within certain free zones.  Deciding between a Dubai mainland and Dubai free zone setup requires careful consideration of your business goals and needs.  

1. Business Activities: Dubai mainland offers a wider range of business activities, while free zones often cater to specific sectors or industries. 
2. Trading: If your business involves trading directly with the UAE market, a mainland license could be more beneficial. 
3. Ownership: If 100% foreign ownership is important to you, then a free zone setup would be ideal. 
4. Expansion Plans: If you plan to scale up your business within the UAE, a mainland setup might offer more flexibility. 

Cost: Setup and operational costs differ between mainland and free zones.

In Dubai, there are three main types of business licenses that you can apply for depending on the nature of your business activities: 

1. Commercial License: This is for businesses engaged in trading activities. It covers a broad range of activities from retail to transportation services. 
2. Professional License: This is typically for individuals offering their expertise or services. It covers consultancies, accounting firms, and architectural firms among others. 
3. Industrial License: This license is for businesses that focus on manufacturing or industrial activities, usually involving transforming natural resources or materials into end products. 

Each license type is governed by the DED in Dubai. It’s important to define your business activities accurately as each license allows up to ten activities. For businesses in specific Free Zones or looking to operate offshore, there may be different license types and requirements.

Setting up a business in Dubai involves a few key legal and regulatory steps: 

1. Identifying your business activities: This is essential as it helps in deciding the type of license you’ll need. Each license allows a maximum of ten activities. 
2. Choosing the legal structure: The legal structure of your company, whether it’s a sole proprietorship, partnership, or LLC, will define how your business operates. 
3. Applying for a trade license: Depending on your business activity, you’ll need to apply for a commercial, professional, or industrial license. Operating without a valid license can lead to heavy penalties. 
4. Documentation: You’ll need several standard documents like a completed application form, and passport copies of shareholders. Some businesses may also need approvals from certain authorities. 
5. Registering Ultimate Beneficial Owners: The UAE requires all free zone and mainland operating companies to register their Ultimate Beneficial Owners for transparency and to avoid illegal transactions. 
6. Opening a corporate bank account: To conduct business in the UAE, you’ll need to open a corporate bank account. 
7. Immigration and visa processing: After getting your business license, you can start the visa application process for yourself, your employees, and any domestic staff. 
8. Adhering to naming conventions: The UAE has specific naming conventions for companies. Your chosen company name must not violate these conventions. 
9. Compliance with local laws: Businesses must ensure they comply with all local laws and regulations to avoid legal trouble, fines, or even jail time. This includes labor laws, environmental regulations, and others about your specific industry. 

Office or physical presence: Depending on the nature of your business and the jurisdiction you choose, you may need to lease an office or warehouse. Considering the many steps and potential complexities involved in setting up a business in Dubai, it can be very beneficial to work with a company formation specialist.