UAE Company Formation | Complete Step-by-Step Guide 2026

Forming a company in the United Arab Emirates is one of the most common ways for foreign entrepreneurs to enter the Middle Eastern market. The UAE offers two primary pathways -- mainland registration through the Department of Economic Development (DED) and free zone registration through one of 45+ free zone authorities -- each with distinct advantages in terms of market access, ownership structure, cost, and regulatory requirements. This guide covers every step of the process, from choosing your structure to post-formation compliance obligations.

Step 1: Choose Your Path: Mainland or Free Zone

The first and most consequential decision is whether to incorporate on the mainland or in a free zone. This choice determines your market access, tax treatment, cost structure, and regulatory environment for the life of your business. For a detailed comparison, see our dedicated Mainland vs Free Zone guide.

Choose mainland if: You need to trade directly with the UAE domestic market (selling goods or services to UAE-based consumers, businesses, or government entities), you plan to bid on government contracts, or your activity requires a mainland license (e.g., certain construction, real estate brokerage, or retail activities).

Choose a free zone if: Your business is primarily international or export-oriented, you want to benefit from 0% corporate tax on qualifying income, you prefer a simplified incorporation process, or your activity aligns with a specific free zone's specialization (e.g., DMCC for commodities trading, Dubai Internet City for technology, DIFC for financial services).

Mainland Company Formation (DED)

Step 1: Choose Your Activity and Trade Name

The UAE uses a codified activity system. You must select your business activity (or activities) from the DED's approved activity list. Each activity corresponds to a specific license type: Commercial, Professional, or Industrial. Your trade name must comply with DED naming rules -- it cannot contain offensive language, reference religious or political terms, or infringe on existing trademarks. Trade name reservation costs approximately AED 620 in Dubai.

Step 2: Obtain Initial Approval

Submit an application for initial approval to the DED. This confirms that your chosen activity and trade name are acceptable. The application can be submitted online through the DED portal (e.g., Dubai's Invest in Dubai platform). Processing typically takes 1-2 working days. Fees: approximately AED 120 for initial approval.

Some activities require additional approvals from external regulatory bodies before the DED will issue initial approval. For example, healthcare activities require MOHAP or DHA approval, legal services require Ministry of Justice approval, and financial services require SCA or Central Bank approval.

Step 3: Draft and Notarize the Memorandum of Association (MOA)

For an LLC, you must prepare and notarize a Memorandum of Association (MOA) that specifies the company's shareholders, their ownership percentages, the share capital, management structure, and other governance provisions. The MOA must be notarized by a UAE notary public or through the DED's notarization service. Cost: approximately AED 2,000-4,000, depending on the notary and complexity.

Step 4: Lease an Office and Obtain Ejari

Mainland companies must have a physical office address in the relevant emirate. The lease agreement must be registered through the Ejari system (in Dubai) or equivalent registration system in other emirates. Office costs vary significantly: a shared workspace or co-working desk may cost AED 10,000-25,000/year, while a private office starts from AED 25,000/year and up. The office space determines your visa quota -- larger offices generally qualify for more employee visas.

Step 5: Obtain the Trade License

With initial approval, notarized MOA, and registered tenancy contract, you can apply for the trade license from the DED. The license fee varies by emirate and activity type but typically ranges from AED 10,000-15,000 per year for a standard commercial license in Dubai. Additional fees may apply for specific activities. Processing: 2-3 working days.

Step 6: Register with MOHRE and Open a Corporate Bank Account

After receiving the trade license, register your company with MOHRE for the establishment card (required for employee visa applications). Then open a corporate bank account -- this step can be challenging, as UAE banks have stringent due diligence requirements. Expect to provide business plans, proof of office, shareholders' passports, and source-of-funds documentation. Account opening typically takes 2-4 weeks.

Free Zone Company Formation

Step 1: Select Your Free Zone

Each free zone has its own activity list, fee schedule, visa quota, and office requirements. Your choice should be driven by your activity type, budget, visa needs, and location preferences. For a detailed comparison of major free zones, see our UAE Free Zone Comparison guide.

Step 2: Choose Your Entity Type

Most free zones offer several entity types: Free Zone Establishment (FZE) -- single shareholder, Free Zone Company (FZC/FZCO) -- multiple shareholders, and Branch of an existing company (domestic or foreign). Some zones also offer Special Purpose Vehicles (SPVs), holding companies, and freelance permits.

Step 3: Submit Application and Documents

Submit your application to the free zone authority along with required documents: passport copies, photographs, completed application form, proposed company name, business plan (required by some zones), and any activity-specific approvals. Many zones accept applications online.

Step 4: Pay Fees and Receive License

Upon approval, pay the registration and license fees. The free zone issues the trade license, which serves as your company's primary operating document within the zone. Processing: as fast as 1-3 working days in some zones.

Step 5: Office Allocation and Visa Processing

Choose your office option (flexi-desk, shared office, or dedicated space) and initiate visa processing for yourself and any employees. Visa processing through free zones typically takes 2-3 weeks per person, including entry permit, medical test, Emirates ID, and visa stamping.

License Types Explained

License Type	Activities Covered	Examples
Commercial	Trading, buying and selling goods, import/export, distribution	General trading, electronics trading, food trading, e-commerce
Professional	Service-based activities, consulting, professional services	Management consulting, IT services, legal services, accounting
Industrial	Manufacturing, production, assembly, processing	Food manufacturing, garment production, building materials

Within each license type, you must specify the exact activities your company will carry out. The DED and free zone authorities maintain extensive activity lists -- in Dubai alone, there are over 2,000 activities. Adding or changing activities after formation is possible but may incur additional fees.

Capital Requirements

Since the 2020 reform of the Commercial Companies Law, there is no statutory minimum share capital for mainland LLCs in the UAE. The shareholders are free to determine the capital amount, which is declared in the MOA. However, certain regulated activities have their own capital requirements:

Banking: Central Bank of the UAE requires minimum paid-up capital starting from AED 40 million for local banks and AED 25 million for branches of foreign banks.
Insurance: Minimum capital of AED 100 million for insurance companies.
Money exchange: Minimum capital requirements set by the Central Bank.
Real estate development: Some emirates require minimum capital for development activities.

Free zone capital requirements vary by zone. Some zones (IFZA, SHAMS) have no minimum capital requirement. Others (DMCC, JAFZA) may require a declared capital of AED 50,000 to AED 300,000, though this capital does not necessarily need to be paid up or deposited in a bank.

Post-Formation Obligations

Corporate tax registration: All taxable persons must register with the FTA, regardless of whether they have taxable income. Registration is done through the EmaraTax portal.
VAT registration: Mandatory if taxable supplies exceed AED 375,000 per year. Voluntary registration is available above AED 187,500.
Annual license renewal: Trade licenses must be renewed annually with the DED or free zone authority.
Economic Substance Regulations (ESR): Entities carrying out relevant activities must file an annual ESR notification and, if applicable, an ESR report demonstrating adequate substance.
UBO reporting: Companies must report their Ultimate Beneficial Owners to the relevant registration authority.
Audit: While not all companies are required to have audited financial statements under federal law, many free zones require annual audits, and companies subject to corporate tax must maintain proper books and records.
Annual return filing: Corporate tax returns must be filed within 9 months of the end of the financial year.

Expected Timelines

Step	Mainland (DED)	Free Zone
Trade name reservation	1-2 days	1-2 days
Initial approval	1-2 days	1-3 days
MOA notarization	3-5 days	Handled by zone (1-2 days)
License issuance	2-3 days	1-3 days
Visa processing (per person)	2-4 weeks	2-3 weeks
Bank account opening	2-4 weeks	2-4 weeks
Total (to operational)	4-8 weeks	2-6 weeks

UAE Legal Structures: LLC, Sole Establishment, Branch, and more
UAE Free Zone Comparison: Detailed comparison of 45+ zones
Mainland vs Free Zone: Decision framework
UAE Setup Costs: Detailed cost breakdown
UAE Tax & Compliance: Corporate tax, VAT, ESR
Step-by-Step Guide: Sequential walkthrough

Frequently Asked Questions

What documents do I need to form a company in the UAE?

For a mainland LLC, you typically need: passport copies of all shareholders (and UAE ID if resident), passport-size photographs, a completed application form, a proposed trade name, a tenancy contract or Ejari for your office, the Memorandum of Association (MOA) notarized by a UAE notary, and initial approval from DED. Some activities require additional approvals from regulatory bodies (e.g., MOHAP for healthcare, SCA for financial services). For free zone companies, requirements are similar but handled by the free zone authority, and MOA notarization is often handled internally.

How much does UAE company formation cost?

Mainland LLC formation in Dubai typically costs AED 12,000-25,000 for the first year, including trade name reservation (AED 620), initial approval (AED 120), DED trade license (AED 10,000-15,000 depending on activity), MOA notarization (AED 2,000-4,000), and MOHRE establishment card. Free zone packages range from AED 5,750 (basic packages in IFZA, Ajman FZ, SHAMS) to AED 50,000+ (DIFC, ADGM). These do not include visa costs (AED 3,000-7,000 per person), office rent, or bank account opening.

Can I form a UAE company remotely?

Many free zones now allow fully remote company formation, including document submission, license issuance, and visa processing initiation from abroad. Zones like IFZA, SHAMS, RAK ICC, and DMCC offer remote formation. Mainland formation typically requires at least one in-person visit for MOA notarization and Emirates ID issuance, though some emirates have introduced remote notarization options.

What license types are available in the UAE?

The UAE offers three primary license categories: Commercial License (for trading, buying and selling goods, import/export), Professional License (for service-based activities like consulting, legal, medical, engineering), and Industrial License (for manufacturing and production). Within each category, specific activities must be selected from the DED or free zone authority's activity list. Some free zones also offer e-commerce licenses, freelance permits, and holding company licenses.

Do I need minimum capital to form a UAE company?

For mainland LLCs, there is no statutory minimum share capital requirement since the 2020 reform of the Commercial Companies Law. However, some specific activities (particularly regulated ones like banking, insurance, and securities) have capital requirements set by their respective regulators. Free zones have their own capital requirements, which vary by zone -- some require no minimum, while others may require AED 50,000-300,000 in declared capital (not necessarily paid up).

What are the post-formation obligations for a UAE company?

After formation, UAE companies must: register for corporate tax with the FTA (mandatory for all taxable persons), register for VAT if taxable supplies exceed AED 375,000/year, maintain proper accounting books and records, file annual corporate tax returns, comply with Economic Substance Regulations if carrying out relevant activities, renew the trade license annually, comply with UBO (Ultimate Beneficial Owner) reporting requirements, and file ESR notifications. Free zone companies must also comply with their zone's specific annual reporting requirements.

Sources

UAE Federal Decree-Law No. 32 of 2021 (Commercial Companies Law)
UAE Federal Decree-Law No. 26 of 2020 (Ownership reform amendment)
UAE Federal Decree-Law No. 47 of 2022 (Corporate Tax Law)
Dubai DED - dubaided.gov.ae
Abu Dhabi DED (ADDED) - added.gov.ae
UAE Federal Tax Authority (FTA) - tax.gov.ae
Cabinet Decision No. 55 of 2023 (Qualifying Income)
Cabinet Decision No. 31 of 2019 (Economic Substance Regulations)