Introduction to UAE Business Licensing

Setting up a business in the UAE requires obtaining specific licenses to ensure legal compliance and smooth operations. The licensing framework varies based on your business activity, location (mainland or free zone), and ownership structure. With recent reforms allowing 100% foreign ownership in many sectors, the UAE has become even more attractive to international entrepreneurs and investors.

One Desk Solution, Dubai's leading provider of VAT, tax, corporate tax, bookkeeping, internal audits, and comprehensive business setup services, guides entrepreneurs through this process efficiently. Our expertise ensures you obtain the correct licenses while optimizing costs and compliance requirements.

Understanding UAE Business Structures

Businesses in the UAE can operate under three primary structures, each with distinct licensing paths and requirements:

1. Mainland Setup (Department of Economy and Tourism - DET)

Allows trading anywhere in the UAE market. Most activities now permit 100% foreign ownership, though some still require a local sponsor or agent. Ideal for businesses targeting the local UAE market.

2. Free Zone Setup

Zones like DMCC, JAFZA, and SHAMS offer 100% foreign ownership, tax benefits, and simplified licensing but restrict direct trading within the UAE mainland (requires a local distributor). Perfect for export-focused businesses and those needing specialized infrastructure.

3. Offshore Entities

Suitable for holding companies, wealth management, and international trading without physical presence or visa requirements. Cannot conduct business within the UAE.

Choose based on your goals: mainland for local market access, free zones for export-focused operations. One Desk Solution handles end-to-end setups, including structure selection and PRO services across Dubai and UAE.

Primary Types of Business Licenses

The core license type depends on your activity, issued by DET for mainland or respective free zone authorities. The UAE classifies licenses into several key categories:

General trading licenses offer flexibility for multiple commodities. One Desk Solution specializes in professional licenses for financial services while assisting with all license types across sectors.

Step-by-Step Licensing Process

1. Select Activity and Structure: Define up to 10 activities from DET's 2,000+ list; reserve trade name (AED 620-900).
2. Obtain Initial Approval: Submit application to DET or free zone authority; get certificate confirming activity feasibility.
3. Secure Office and Ejari: Lease flexi-desk or office (AED 10,000+ annually); register Ejari for address proof.
4. Prepare Legal Documents: Draft MOA/LSA; notarize with relevant authorities.
5. Final License Issuance: Pay fees; receive e-license in 1-10 days depending on complexity.
6. Post-Licensing Compliance: VAT registration (if turnover > AED 375,000), employee visas via MOHRE, corporate tax registration.

One Desk Solution streamlines this entire process with 24/7 support, paperwork handling, and compliance checks to avoid delays.

Essential Documents for License Application

Gather these documents for mainland setups to ensure smooth processing:

• Passport copies of all shareholders and managers
• Visa copies (if already residing in UAE)
• Trade name options (3 choices in order of preference)
• Tenancy contract and Ejari certificate
• Memorandum of Association (MOA) or Local Service Agent (LSA) agreement
• NOC from sponsor (if applicable)
• Attested degrees/experience certificates for professional licenses
• Business plan for certain regulated activities

Free zones require similar documents plus Ultimate Beneficial Owner (UBO) details for AML compliance. One Desk Solution verifies and attests all documents, preventing common delays and rejections.

Additional Approvals & Sector-Specific Requirements

Many business activities require external approvals from specialized authorities beyond the basic license. These sector-specific nods are mandatory and can significantly impact your setup timeline:

Additional sectors like pharmaceutical manufacturing require Ministry of Health approvals, while financial services need Central Bank or Securities & Commodities Authority clearance. These approvals can take several weeks; always factor them into your business launch timeline. One Desk Solution coordinates multi-agency approvals during setups, saving you time and effort.

License Costs Breakdown (2026 Estimates)

License costs vary significantly by type, location, and number of visas required. Here's a comparative overview of estimated costs:

Note: Costs include government fees, trade name registration, and initial approvals but exclude office rental (AED 10,000+ annually) and visa processing fees. Free zones often have lower initial packages but may have higher renewal costs.

One Desk Solution offers transparent quotes for tailored packages, including VAT/corporate tax setup and first-year accounting services. Contact us for a personalized cost estimate.

Mainland vs Free Zone: Key Differences

Choosing between mainland and free zone setup is a critical decision that affects your licensing path, costs, and operational flexibility. Here's a detailed comparison:

Mainland suits: Businesses targeting the local UAE market, retail operations, contractors working on government projects.

Free zones favor: Export-focused businesses, tech startups, consulting firms serving international clients, companies needing specialized infrastructure.

One Desk Solution advises on optimal choice per your business model, target market, and growth plans.

Compliance After Setup: VAT, Tax, Audit

Post-licensing compliance is crucial for maintaining your business's legal standing in the UAE. Key requirements include:

1. VAT Registration & Filing

Mandatory if annual turnover exceeds AED 375,000 (5% VAT rate). Voluntary registration available for businesses with lower turnover. Requires quarterly filing with Federal Tax Authority (FTA).

2. Corporate Tax Compliance

Effective June 2023: 9% on profits exceeding AED 375,000. Free zone businesses qualifying for 0% CT regime must still register and file returns. Our financial advisory team can help optimize your tax position.

3. Annual Audits

Mandatory for mainland LLCs and certain free zone companies. Requires approved auditor's report submitted to relevant authority.

4. ESR (Economic Substance Regulations)

Relevant businesses must demonstrate substantial activity in UAE and file annual notifications.

One Desk Solution excels in post-setup compliance: VAT registration/filing, corporate tax returns, bookkeeping, internal/external audits, payroll management. Our 24/7 team ensures UAE compliance, refund claims, and strategic advisory. Learn more about our payroll services and when to hire financial advisors.

Renewal and Ongoing Obligations

UAE business licenses require annual renewal, typically aligned with your company's incorporation date. Key renewal requirements:

• License Renewal: Submit renewal application with updated documents (AED 5k-15k depending on license type)
• Office Lease Renewal: Updated tenancy contract and Ejari
• Audit Report: For mainland companies and certain free zones
• Visa Renewals: For employees and shareholders (medical, Emirates ID, passport validity checks)
• Tax Registration: Ensure VAT and Corporate Tax registrations remain active

Delays incur fines (AED 500-1,000 per month for license renewal delays). One Desk Solution manages renewals with proactive reminders and handles the entire process. Stay compliant via our ongoing VAT filing, tax planning, and accounting services.

Frequently Asked Questions

Why Partner with One Desk Solution

As Dubai's top VAT, tax, bookkeeping, audit, and business setup provider, One Desk Solution offers complete business setup & PRO services. Our integrated approach ensures seamless licensing and ongoing compliance:

Our Business Setup Services Include:

• End-to-end licensing and approvals coordination
• Free zone and mainland company formation
• Document attestation and legal translation
• Corporate bank account opening assistance
• Visa processing and PRO services
• Tailored accounting solutions for startups and enterprises
• Tax optimization strategies and compliance
• Internal/external audits and feasibility studies

Benefits of Working With Us:

• Expert Team: International-experienced professionals specializing in UAE regulations
• Time Savings: 50% faster processing through established authority relationships
• Cost Transparency: No hidden fees with fixed-fee packages
• Compliance Assurance: Stay updated with changing UAE regulations
• Integrated Solutions: From license setup to monthly accounting and tax filing
• 24/7 Support: Dedicated account manager for all queries