TL;DR
Forming an LLC in Dubai costs between AED 12,500 and AED 50,000+ in the first year, depending on whether you choose a mainland or free zone setup. The process takes 5 to 15 working days and involves choosing your business activity, reserving a trade name, drafting a Memorandum of Association, securing office space, obtaining a trade license, opening a bank account, and applying for visas. Foreign investors can now hold 100% ownership for most activities under Federal Decree-Law No. 32 of 2021. The biggest surprise for most founders isn’t the license fee, it’s the bank account.
Incorporating an LLC in Dubai is one of the most straightforward ways to establish a business in the UAE. But “straightforward” doesn’t mean “simple.” The process involves multiple government touchpoints, and the costs go well beyond the headline license fee that most consultants advertise.
This guide breaks down every step and every cost, line by line, so you can build a realistic budget before you commit.
Explore business setup packages to compare your options before reading on.
What Is an LLC in Dubai?
A Limited Liability Company (LLC) in Dubai is a legal entity where shareholders’ liability is limited to their capital contributions. It’s governed by the UAE Commercial Companies Law, specifically Federal Decree-Law No. 32 of 2021.
A few structural facts that matter for planning:
Ownership. Dubai now allows 100% foreign ownership for most business activities, both on the mainland and in free zones. Certain strategic sectors (oil exploration, banking, telecommunications) may still require UAE national participation.
Shareholders. An LLC can have anywhere from 1 to 50 partners. A single shareholder can form what’s legally called a “One Person Company” under the commercial companies law, with the same limited liability protections as a multi-partner LLC.
Capital. For most LLC activities, there is no mandatory minimum share capital requirement. You choose a capital amount that reflects your business needs.
These three facts, full foreign ownership, single-shareholder formation, and no minimum capital, are why the Dubai LLC has become the default structure for foreign entrepreneurs entering the UAE market.
Steps to Incorporate an LLC in Dubai (Mainland)
The mainland route is managed by the Department of Economy and Tourism (DET). It gives you full market access across all Emirates and eligibility for government contracts. Here are the steps to incorporate an LLC in Dubai through the mainland.
Step 1: Choose Your Business Activity
DET lists over 2,000 permitted activities across industries like finance, IT, healthcare, logistics, real estate, and education. Your activity choice determines your license type (commercial, professional, or industrial) and directly affects your costs.
Pick your activity carefully. Practitioners on forums consistently warn that vague descriptions like “general trading” create problems later, especially when opening a bank account.
Step 2: Decide Between Mainland and Free Zone
This is the single most consequential decision in the entire process. Mainland companies trade freely across the UAE and bid on government contracts. Free zone companies historically operate within their zone and internationally, though a 2025 Dubai Executive Council resolution now allows qualifying free zone businesses to apply for mainland trading permits.
If you need to learn more about each option, read about mainland company setup and free zone formation separately.
Step 3: Reserve Your Trade Name
You submit your proposed company name to DET. The government fee is AED 620, and the reservation certificate is valid for 180 days. If you choose a non-Arabic trade name, expect an additional surcharge of AED 2,000.
Names must not duplicate existing registrations, contain religious or political references, or use abbreviations without approval.
Step 4: Get Initial Approval
Initial approval confirms that DET permits your proposed business activity. This step costs AED 120 to AED 1,500 depending on the activity and any additional government department approvals required. It’s a mandatory checkpoint before you can apply for the full license.
Step 5: Draft and Notarize the Memorandum of Association
The Memorandum of Association (MoA) is your company’s constitutional document. It defines the ownership structure, capital distribution, management responsibilities, and operational scope. DET requires it for all LLCs.
Notarization at the DET notary public typically costs AED 1,000 to AED 4,000. The variation depends on the number of shareholders and complexity of the agreement.
Step 6: Secure Office Space and Ejari Registration
A physical office address is mandatory for mainland LLCs. This is non-negotiable, and it’s often the single largest cost in the entire setup.
Once you sign a lease, you register it through the Ejari system (approximately AED 220). The Ejari certificate is required to obtain your trade license.
Your office size also determines your visa quota. The general rule is roughly one visa per 80 square feet of office space. If you plan to grow your team, factor this into your office selection from the start.
Step 7: Apply for and Receive Your Trade License
With your initial approval, notarized MoA, and Ejari certificate in hand, you apply for the trade license through DET. Processing is typically fast, often a few working days. License fees vary by type (more on this in the cost section below).
Step 8: Open a Corporate Bank Account
This step deserves its own section (see below). It’s where most founders get stuck.
Step 9: Apply for Visas
With your license active, you can apply for investor visas and employee visas. Investor visa costs run AED 4,000 to AED 7,000 per person, including medical tests, Emirates ID, and change-of-status fees.
For guidance on UAE residency visas through your company, plan this step early since visa timing affects when you can hire and when founders can legally reside in the country.
Step 10: Register for Corporate Tax and VAT
Every LLC must register with the Federal Tax Authority. Corporate tax applies at 9% on taxable income exceeding AED 375,000. VAT at 5% is mandatory for businesses with annual taxable supplies above AED 375,000.
This is not optional, and the deadlines are strict. Late registration triggers penalties.
Timeline: The full mainland LLC formation process takes approximately 5 to 15 working days, not counting bank account opening.
Steps for Free Zone LLC Formation
Free zone formation follows a similar logic but with a few key differences.
Each free zone (DMCC, IFZA, Meydan, RAKEZ, and dozens more) operates under its own regulatory authority. You apply directly to the free zone, not to DET. The process is typically faster, often 5 to 7 working days.
The main distinctions:
- Virtual offices and flexi-desks are allowed. You don’t need a physical office, which drops your entry costs significantly.
- Visa quotas are smaller. Basic free zone packages typically include 3 to 6 visas.
- Tax treatment differs. Qualifying Free Zone Persons (QFZPs) can benefit from a 0% corporate tax rate on qualifying income.
- Market access is more limited. Free zone companies cannot trade directly with mainland UAE customers without a distribution agreement or the new mainland trading permit.
Learn more about free zone company formation to see which zone fits your activity.
Full Cost Breakdown: Mainland LLC
Here’s where the costs to incorporate an LLC in Dubai get specific. Most guides give you a headline range and stop. Below is a line-by-line breakdown.
Government Fees
| Fee Component | Amount (AED) |
|---|---|
| Trade name reservation | 620 |
| Non-Arabic name surcharge | 2,000 (if applicable) |
| Initial approval | 120 to 1,500 |
| Commercial trade license | 10,000 to 15,000/year |
| Professional trade license | 7,000 to 12,000/year |
| Industrial trade license | 12,000 to 18,000/year |
| MoA notarization | 1,000 to 4,000 |
| Ejari registration | ~220 |
| Chamber of Commerce membership | 500 to 1,000 |
Source: DET fee components and trade license cost data.
Variable Costs
| Cost Item | Range (AED) | Notes |
|---|---|---|
| Office rent | 12,000 to 50,000+/year | Flexi-desk to private office |
| Investor visa (per person) | 4,000 to 7,000 | Includes medical, EID, status change |
| Employee visa (per person) | 3,000 to 5,000 | Depends on category |
| Bank account setup | 500 to 1,500 | One-time fee |
| Bank minimum balance | 10,000 to 50,000 | Held, not spent |
| Import/export code | ~2,200 | If trading internationally |
Year 1 vs. Year 2: The Cost Reality Nobody Talks About
This is something almost no ranking page on this topic covers, and it catches founders off guard. Your license renewal costs the same as your initial license. A license that costs AED 15,000 in year one costs AED 15,000 to renew in year two.
Add ongoing compliance costs and the picture changes significantly.
| Ongoing Item | Annual Cost (AED) |
|---|---|
| License renewal | Same as year 1 |
| Office rent renewal | 12,000 to 50,000+ |
| Bookkeeping | 5,000 to 10,000 |
| Audit (if required) | 7,000 to 12,000 |
| VAT filing services | 6,000 to 12,000 (quarterly) |
| Visa renewals | 2,000 to 4,000 per person |
Total first-year cost for a mainland LLC with one visa and a modest office: AED 25,000 to AED 50,000. Year two ongoing costs (renewal, compliance, rent): AED 30,000 to AED 45,000. The second year is rarely cheaper than the first.
Full Cost Breakdown: Free Zone LLC
Free zone costs are lower at the entry level. The cheapest LLC in the UAE starts at approximately AED 12,000 for a license-only package with no visa included.
With-visa packages typically start around AED 14,900 and go up based on the number of visas, activities, and office type. Total first-year costs with one visa and a flexi-desk: AED 15,000 to AED 30,000.
One cost-saving tip that circulates in founder communities: one user on a UAE business forum reported saving over AED 6,000 by going directly to an authorized government service center rather than through a PRO or typing service company. The savings are real, but so is the time investment in learning the process yourself.
Mainland vs. Free Zone: Quick Comparison
| Dimension | Mainland LLC | Free Zone LLC |
|---|---|---|
| Market access | Full UAE + government contracts | Within-zone + international (mainland permit now available) |
| Corporate tax | 9% above AED 375K | 0% on qualifying income (QFZP status required) |
| Office requirement | Physical office mandatory | Virtual office or flexi-desk allowed |
| Visa quota | ~1 per 80 sqft of office | Typically 3 to 6 per basic package |
| First-year setup cost | AED 20,000 to 50,000+ | AED 12,000 to 30,000 |
| Formation speed | 7 to 15 working days | 5 to 7 working days |
For businesses that need offshore structures for holding companies or asset protection, that’s a third option worth considering separately.
Tax Obligations for a Dubai LLC
The UAE’s tax framework has changed significantly in recent years. Here’s what applies to LLCs in 2026.
Corporate tax. A standard rate of 9% on taxable income exceeding AED 375,000. Income up to that threshold is taxed at 0%.
Small Business Relief. UAE resident businesses with revenue of AED 3 million or less qualify for simplified tax treatment. This relief is available through December 31, 2026, so plan accordingly if your revenue is near that threshold.
Free zone tax benefit. Qualifying Free Zone Persons (QFZPs) can maintain a 0% corporate tax rate on qualifying income. But the bar is higher than many founders expect. Industry observers expect FTA audits of QFZP claims to intensify through 2026 as the regime matures. You need genuine economic substance, not just a license address.
VAT. The rate is 5% on most goods and services. Registration is mandatory once annual taxable supplies exceed AED 375,000. For help with VAT registration and filing, consider getting professional support early rather than scrambling before a deadline.
E-invoicing. The UAE is rolling out mandatory e-invoicing systems in 2026. If your company isn’t integrated with the government’s digital reporting framework, you risk compliance problems.
For ongoing corporate tax compliance, the cost of getting it wrong is always higher than the cost of getting it right.
Opening a Bank Account: The Step Most Founders Underestimate
If there’s one section of this guide you read carefully, make it this one.
Practitioners in UAE business communities report that roughly 50% of companies face difficulties opening a corporate bank account. That’s not a typo. According to insights from banking consultants, half of all applications run into rejection or extended delays.
Why? UAE banks conduct rigorous KYC (Know Your Customer) and AML (Anti-Money Laundering) checks. They also perform Contact Point Verification (CPV), which means they physically verify your office address. Companies with flexi-desks and vague activity descriptions like “general trading” face the highest rejection rates.
What actually helps:
- Choose a specific, clearly defined business activity on your license.
- Get a physical office (or at minimum, a dedicated desk with your company nameplate).
- Prepare a detailed business plan with projected cash flows.
- Have all documents, including passport copies, MoA, trade license, Ejari, and proof of address, ready before your bank appointment.
- Consider applying to multiple banks simultaneously. Traditional UAE banks typically take 2 to 4 weeks to approve a business account.
This is where professional help pays for itself. Bank account opening assistance can mean the difference between a one-week process and a three-month headache.
Documents Required to Incorporate an LLC in Dubai
Keep this checklist handy. Missing documents are the most common cause of delays.
For all shareholders, managers, and directors:
- Passport copies (clear, color scans, valid for at least six months)
- UAE entry stamp or valid residence visa
- Emirates ID (if already a UAE resident)
- Passport-sized photographs (white background)
- Curriculum Vitae or professional profile
Company documents:
- Memorandum of Association (compliant with UAE company law)
- Office tenancy contract and Ejari certificate (mainland)
- Business plan (increasingly required for professional and innovative activities)
- Details of local sponsor (only if applicable to restricted activities)
- No Objection Certificate from current sponsor (if on an existing UAE visa)
Common Mistakes and Hidden Costs
The costs to incorporate an LLC in Dubai that actually hurt are the ones nobody warned you about. Here are the mistakes founders make most often.
Budgeting only for the license fee. Many business owners plan their budget around the trade license and nothing else. Then office rent, visa costs, bank minimum balances, and compliance fees arrive. The license is typically 30 to 40% of your actual first-year costs.
Choosing the cheapest structure instead of the right one. Switching from a free zone to mainland later involves new licenses, new tenancy contracts, visa cancellations, and bank account updates. Restructuring almost always costs more than choosing correctly upfront. Practitioners consistently warn against optimizing purely on price.
General trading license plus flexi-desk. This is the highest-risk combination for bank account rejection. Banks see it as a red flag for potential shell companies. If you need general trading, invest in a real office.
Ignoring substance requirements. In 2026, authorities and banks expect businesses to show real economic substance: offices, staff, and genuine activity that matches the license. Ignoring this can lead to tax exposure, licensing issues, and delays across the board.
Missing tax registration deadlines. Corporate tax registration has specific deadlines. Late registration triggers penalties that are entirely avoidable.
For help navigating government paperwork and avoiding these traps, PRO services handle the document submissions and authority liaison that consume founders’ time.
FAQ
Can a foreigner own 100% of a Dubai LLC?
Yes. Since the amendments to the Commercial Companies Law, foreign investors can hold 100% ownership of a mainland LLC for the majority of licensed activities. Certain strategic sectors like oil, banking, and telecom may still require UAE national participation.
Is there a minimum capital requirement for a Dubai LLC?
No. For most LLC activities, there is no mandatory minimum share capital. You set the capital amount in your Memorandum of Association based on what makes sense for your business.
How long does it take to incorporate an LLC in Dubai?
Mainland LLC formation typically takes 5 to 15 working days. Free zone LLCs can be set up within 5 to 7 working days. Bank account opening adds another 2 to 4 weeks on top of that.
What is a one-person LLC?
A one-person LLC (also called a “One Person Company”) allows a single shareholder to form an LLC with the same limited liability protection and tax treatment as a multi-partner LLC. It’s recognized under UAE commercial companies law and is a popular choice for solo entrepreneurs.
Do I still need a local sponsor to form an LLC in Dubai?
For most business activities, no. The 100% foreign ownership rules have eliminated the local sponsor requirement for the vast majority of LLC activities. Some restricted sectors may still require a UAE national partner.
What is the cheapest way to incorporate an LLC in Dubai?
The lowest entry point is a free zone license-only package starting at approximately AED 12,000, with no visa included. For a mainland LLC with one visa and basic office space, expect AED 25,000 to AED 35,000 as a realistic minimum.
Why do bank account applications get rejected?
Common reasons include vague business activity descriptions, flexi-desk addresses that fail Contact Point Verification, incomplete documentation, and high-risk activity categories. Specific activity descriptions, a physical office, and a clear business plan significantly improve approval odds.
What ongoing costs should I budget for after year one?
License renewal (same fee as year one), office rent renewal, bookkeeping (AED 5,000 to AED 10,000), potential audit fees (AED 7,000 to AED 12,000), VAT filing, and visa renewals. Year two costs are rarely lower than year one.
Incorporating an LLC in Dubai is a well-defined process with clear steps and predictable government fees. The unpredictable parts, bank account opening, substance requirements, and ongoing compliance, are where professional guidance makes the biggest difference.
Book a free consultation with Gobiz to get a personalized cost breakdown and avoid the surprises that catch most first-time founders.
