Dubai continues to attract UK entrepreneurs thanks to its strategic location, world-class infrastructure and competitive tax environment. While the UAE has introduced corporate tax in recent years, it remains one of the most business-friendly jurisdictions globally. For UK business owners looking to expand internationally, Dubai offers strong commercial opportunities if the setup is done correctly.
This guide explains how UK individuals and companies can establish a business in Dubai, the legal structures available, and what you need to know about tax, visas, and compliance.
Why Choose Dubai for Your Business?
Dubai is a global business hub for an amazing combination of reasons:
1. Zero Corporate and Personal Income Tax:
One of the top benefits of establishing a company in Dubai is no corporate and personal income tax. This policy is designed for entrepreneurs to maximize profits.
2. Strategic Global Location:
Strategically positioned at the intersection of Europe, Asia, and Africa, Dubai offers access to more than 2 billion consumers.
3. Business-Friendly Ecosystem:
Attracting foreign direct investment is a priority for the government of Dubai as well with grants, initiatives, and modern governance structures designed to suit the entrepreneur.
4. World-Class Infrastructure:
The headquarters and satellite offices can scale quickly, and well-equipped facilities are available to support distribution, logistics, and transportation operations.
What to keep on your mind before opening up a business in Dubai?
You have to consider several important things before setting up a business in Dubai. These core elements will help ensure you remain on the right track and will help you establish demand for your product or service. Dubai’s economy does not only depend on one industry. It has a variety of sectors from tourism to hospitality, technology, logistics, and e-commerce. Grasping the demand in the market will enable you to pinpoint the most suitable business activity and sector for investment.
It would be best to decide your business’s legal structure. You could operate as a partnership or an LLC, among others. Each structure has its pros and cons, depending on your business goals.
Then you need to know the cost involved with setting up a business in Dubai including the rent, the utilities, and the salaries. It is important to plan for these expenses so your business can run smoothly.
What is a free zone?
Choosing the appropriate business location while establishing in Dubai is quite a crucial consideration. Several free zones have been established to attract certain economic activities, like technology and media or logistics.
Companies located in free zones can benefit from advantages such as complete foreign ownership, tax breaks, and streamlined registration procedures.
Thus, if you want to enjoy the advantages of cutting down on bureaucracy, streamlined processes, and a talented labor force, then finding out which free zone is suitable for your kind of business activities will prove to be essential research you have to conduct.
Do you require a visa to set up a business in Dubai?
If you are a business owner in the UK and a resident of the UK, you will require a residence visa for your Dubai business setup. This could be a business visa, an investor visa, or an employment visa.
Depending on your case, each visa has its conditions and benefits. Be sure to speak with a legal advisor to determine the best visa for your business.
Key Steps to Set Up a Business in Dubai as a UK Citizen
1. Decide on a Business Activity
Before you start, go ahead and define your business activity. Dubai is heavily regulated, so your activity must fit one of the categories recognized by the Department of Economic Development (DED):
- Commerce: Trading activities.
- Industrial: Manufacturing and Production
- Professional: Consultancy or service-based businesses.
Each activity has specific regulations, so choosing the right category is crucial.
2. Choose the Right Business Structure
Deciding on the business structure impacts ownership rights and operational regulations. Options include:
a. Free Zone Company:
- 100% foreign ownership.
- No local sponsor is required.
- Set up for re-exporting companies or organizations that are international.
b. Mainland Company:
- Perfect for retail shops, restaurants, or consultancies.
- Local Sponsor Owning 51% Shares Is MustIt provides the ability to trade in the UAE market.
- Set up for re-exporting companies or organizations that are international.
c. Offshore Company
- Also good for holding companies and international trade
- May not carry on business in the UAE mainland.
3. Select the Right Location to Set Up Your Business
More than 30 free zones in Dubai cater to specific sectors, including media, technology or trade. Alternatively, mainland Dubai is a gateway to the local UAE market.
Free Zones for UK Entrepreneurs
- Dubai Multi Commodities Centre (DMCC): Ideal for trading and commodities
- Dubai Internet City (DIC): Ideal for tech startups.
- Dubai Silicon Oasis (DSO): Best for tech-focused manufacturing.
4. Register Your Business Name
Next, you will need to register your business name. Dubai’s naming regulations are strict:
- Stay away from names with foul or religious connotations.
- The name should indicate your business activity.
- Avoid acronyms or abbreviations unless they are part of your brand.
Once you have decided on a name, submit it to the DED or the free zone authority for receipt of approval.
5. Obtain a Trade Licence
Your business activity determines the type of trade licence you’ll need:
- Trade licence: A trade licence is an authorization allowing you to execute specific business within the trade itself — ranging from construction to retail to tourism. It’s issued by the Department of Economic Development and lasts for one year.
- Business licence: A business licence, in contrast, permits you to conduct business in a certain area. It’s issued by the Dubai Municipality and is good for three years. A trade licence and a business licence may be required depending on the type of business you are running.
- Commercial licence: A commercial licence allows companies to conduct other activities related to manufacturing, wholesaling, management, importing, and exporting throughout the UAE.
Obtaining a licence through the DED for mainland businesses or visiting the relevant free zone authority.
6. Prepare the Required Documentation
When applying for approvals you must submit certain documents:
- A copy of your passport.
- Application forms filled in.
- Business name reservation letter.
- Memorandum of Association (MOA).
- Business plan (for free zone applications)
7. Finalize Visa Requirements
If you are a British citizen, you will need a valid UAE residence visa to set up and run a business in Dubai. The visa process involves:
- Entry permit application.
- Medical fitness test.
- Emirates ID registration.
Depending on what structure you choose, you may also sponsor visas for your family and employees.
8. Open a Corporate Bank Account
All dealings need to be made through a UAE-based bank account. To open the account, you may need to provide your trade licence, proof of residence, and other business documents to banks.
Costs Involved in Setting up a Business in Dubai
The business formation cost in Dubai varies according to the type of business set up, the licenses needed, and the area of the business. Key expenses include:
- Trade Licence Fees: From AED 25,000 to AED 29,000
- Office Space Rent: The price depends on the free zone or mainland needs.
- Visa Fees: The processing fees for the residence visa vary from AED 3,500 to AED 4,000
- Registration Fees: Free zone registrations begin at approximately AED 10,000.
You need to budget for these costs to avoid surprises.
Legal and Regulatory Compliance
To successfully set up your business, compliance with Dubai’s laws is mandatory:
Employment Laws: Familiarize yourself with UAE labor laws when hiring your staff.
Audit Requirement: Most free zones require you to have an annual financial audit.
Tax and Compliance – What UK Entrepreneurs Must Know
Dubai is still tax-efficient, but it is no longer “tax-free” in every sense.
Corporate Tax
• 0% on profits up to AED 375,000
• 9% on profits above that threshold
Free-zone companies may still enjoy 0% tax on qualifying income if they comply with substance and activity rules.
VAT
The UAE has a 5% VAT system. Registration is mandatory once turnover exceeds AED 375,000 per year.
UK Tax Interaction
If you remain UK tax-resident, your worldwide income is still taxable in the UK. The UK–UAE Double Tax Treaty prevents double taxation, but your structure and residency status must be handled carefully.
This is where UK-based advisers — particularly accounting firms in the UK with international tax expertise — play a crucial role.
Engage Professional Assistance
For newcomers, the business setup process in Dubai can be quite daunting. Using professional business consultants can help simplify this process:
- Licence applications.
- Visa processing.
- Document approvals.
Is it advisable to register your company’s bank account in Dubai?
Yes, opening corporate bank accounts is a part of the business setup for UK citizens in Dubai. It’s easier to manage your finances and pay your suppliers and employees with a business bank account for your new company.
And some banks will require you to open a company trade licence before you can open a company bank account, and will also require a minimum deposit.
In the case of a free zone company, it is necessary to note that the relationship with banks differs from one free zone to another. You are also taught to abide by the rules of central banking.
On average it can take you between 2 days to 2 weeks to get the account set up depending on which bank you go to (again here we can help you make a decision on which bank would suit you best as per your business activities and requirements).
Am I obliged to live in Dubai to run my business?
If you are a UK resident, you will also have to suffer the tax disadvantages of residency in that jurisdiction, over and above any adjustments to the way your company is structured. This is typical you will be taxed where you are resident for tax purposes. However, if you plan to be a resident in another country that is a lower tax jurisdiction, or a non-income-tax-charging foreign country like Bali, you can still get the tax reductions that Dubai provides.
This is a complex territory and the ‘tax law’ of other countries along with double tax treaties between countries that govern which country has ‘taxing rights’ over any individual must considered.
Final Thoughts
Starting a business in Dubai as a UK citizen is an awesome chance to access a growing economy and international market. Learn about the processes, pick a structure, and comply with the rules, and you can make your dream of being an entrepreneur a reality.
Ready to leap? Start today to turn your business into a vision, the doors of Dubai are open!
Armed with this guide, you should be well able to set up your business in Dubai if you wish to do so in a compliant and efficient manner.
Faqs:
Q1. Do UK citizens need a visa to set up a business in Dubai?
Yes. British passport holders can enter Dubai visa-free for 30 days, but to reside and operate a business you must obtain a UAE residence/work visa. Common options include the Investor/Partner visa (for shareholders in a UAE company) and the Employment visa.
Q2. Is there really no corporate tax in Dubai?
Not exactly. The UAE’s attractive tax regime remains, but a federal corporate tax was introduced in June 2023. Businesses now pay 9% tax on profits exceeding AED 375,000
Q3. What company structures can a UK entrepreneur use in Dubai?
There are three main options: Mainland company, Free Zone company, or Offshore entity. Mainland companies can now be 100% foreign-owned in most sectors and can trade freely in the local market. Free Zone companies also allow 100% foreign ownership and offer tax and customs advantages, but they are generally limited to business within the zone or international trade. Offshore companies are used for holding and international activities but cannot trade in the UAE market.
Q4. How long does it take to set up a company in Dubai as a UK citizen?
The timeline varies by business type and preparation. In general, company registration and licensing can take 2–6 weeks if all documents are ready, though complex approvals or specific activities may extend this.
Q5. Do I have to relocate to Dubai to run my business?
To fully benefit from UAE’s tax regime, many entrepreneurs obtain UAE residency. If you remain a UK tax resident, your Dubai income may still be taxed by HMRC. The UK–UAE Double Tax Treaty (in effect since 2016) ensures you won’t be taxed twice.
Q6. Can I sell my products/services anywhere in the UAE with a free-zone licence?
Free Zone companies are primarily intended for export or intra-zone business. To sell directly in the UAE mainland, you typically need a mainland licence or a local distributor.
