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Company Formation ~18 minutes read

Setting Up a Full Company in the UAE: The Complete Guide

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Quick Answer

A full UAE company is a real legal entity that can hire staff, take on partners or shareholders, open a proper corporate bank account, and operate under more or less any activity your trade licence allows. It costs more than a freelance permit and takes longer to set up, but for anyone planning to grow past a one-person operation, it's the right starting point rather than something to migrate to later.

This guide walks through choosing mainland or free zone, picking a legal structure, the nine-step setup process, how many visas you can sponsor, and the corporate tax, VAT, and Emiratisation obligations that come with running a real company here. If you're not sure a full company is even the right fit yet, see our comparison guide, Freelance Permit or Full Company, first. For a itemized quote for your specific activity, talk to STRATEX directly.

In this guide

Who This Guide Is For

This is written for anyone opening a company in the UAE, whether you're relocating here to run a business, adding a UAE entity to an existing company abroad, or scaling up from solo freelance work into something with staff and multiple activities. If you're a single person doing one type of client work and don't need to hire anyone or take on partners, a freelance permit is usually cheaper and faster; see our separate guide, Creating a Freelance Visa in the UAE, and the companion piece comparing the two routes directly. Everything below assumes you've decided a full company, not a freelance permit, is the right fit.

Mainland or Free Zone: The Core Decision

Before anything else, you need to decide where your company will be licensed: mainland, through the relevant emirate's economic development authority, or a free zone, one of the dozens of dedicated business zones spread across the UAE.

A mainland company can trade directly with anyone, anywhere in the UAE, including government entities and other mainland companies, with no restrictions on where your clients or suppliers are based. Since the federal ownership reforms took effect, most business activities now allow 100% foreign ownership on the mainland, meaning you no longer need a UAE national to hold 51% of the company just to operate there. A handful of "strategically important" activities (things like certain security, oil and gas, or banking-adjacent businesses) still carry local ownership or local partner requirements, so it's worth confirming your specific activity before assuming full ownership applies. In Dubai, mainland licensing runs through the Department of Economy and Tourism (DET). In Abu Dhabi, mainland licences are now issued through the Abu Dhabi Registration Authority (ADRA), which operates as the unified licensing arm of the Department of Economic Development (ADDED) for both the mainland and the emirate's non-financial free zones.

A free zone company is generally faster and cheaper to set up, comes bundled with office space (from a shared flexi-desk up to a private suite, depending on the package), and, in most zones, gives you full ownership by default since that was never restricted to begin with. The trade-off is the same one that applies to freelance permits: a free zone licence is built around clients outside the mainland market, so invoicing UAE mainland companies directly can require routing through a distributor or opening an additional mainland presence, depending on your activity and zone.

As a simple rule of thumb: if most of your revenue will come from other UAE mainland businesses or government contracts, mainland is usually worth the extra cost and setup time. If your clients are mostly international, or you're building something asset-light like consulting, software, or e-commerce, a free zone is often the lower-cost, lower-friction starting point, with the option to add a mainland branch later if you win enough local business to justify it.

The Process, Start to Finish

1

Choose your activity and legal structure. Your licensed activity determines everything downstream: which authority can issue it, whether 100% ownership applies, what documentation you'll need, and which free zones (if you go that route) even offer it. Timing: a few days of research, more if your activity is unusual or regulated.

2

Reserve your trade name. Submit a proposed company name for approval. Names are checked against naming conventions (no offensive or religious references, no names implying government affiliation without approval, and so on) and against existing registrations. Timing: same day to a few days.

3

Get initial approval. This is the authority's preliminary sign-off that your proposed activity and structure are permitted, before you finalize documents. Certain regulated activities (healthcare, education, financial services, security) require an additional No Objection Certificate from the relevant federal or local regulator at this stage. Timing: a few days to a few weeks, depending on the activity.

4

Draft and notarize your Memorandum of Association (MOA). For any structure with more than one shareholder, the MOA sets out ownership percentages, capital contribution, profit-sharing, and governance. Even single-shareholder structures typically need a Memorandum of Understanding or local service agent agreement, depending on structure and jurisdiction. Timing: a few days once shareholders agree on terms.

5

Secure your premises. Mainland companies generally need a real, registered office, not a flexi-desk, and the lease has to be registered through the emirate's official tenancy system (Ejari in Dubai, Tawtheeq in Abu Dhabi) before the licence can be issued. Free zone companies typically satisfy this with a flexi-desk or shared workspace bundled into the setup package, though larger visa allocations may require upgrading to a dedicated office. Timing: a few days to a few weeks, depending on how quickly you find and register a space.

6

Submit your licence application and pay fees. With your name reserved, initial approval granted, MOA notarized, and lease registered, you submit the full application. Once approved, the trade licence is issued. Timing: a few days once all prior steps are complete.

7

Register with the Chamber of Commerce (mainland only). Most mainland companies need to register with their emirate's Chamber of Commerce and Industry as a final step, which is typically a straightforward administrative filing once the licence exists.

8

Open a corporate bank account. With a trade licence in hand, you can approach UAE banks for a corporate account. This step often takes longer than people expect: banks run their own compliance checks (particularly for structures with foreign shareholders or activities they consider higher-risk), and it's common for this to take anywhere from a couple of weeks to over a month. Timing: 2 to 6 weeks, sometimes longer.

9

Apply for your visas. Once the licence and establishment card are active, you (as an investor or partner) and any employees can apply for residence visas under the company, following the same entry permit, medical test, Emirates ID, and stamping sequence used for any UAE residence visa. See Visas, below, for how many you can typically sponsor.

Realistic total timeline: for a standard mainland LLC with an ordinary (non-regulated) activity, roughly 3 to 6 weeks from choosing your activity to holding an active licence, plus additional time for the bank account and visas. Free zone setups can be noticeably faster on the licence itself (some zones issue in days), since the office and structure are more standardized, but the bank account timeline is similar either way.

Visas: How Many You Can Sponsor

A company licence lets you sponsor residence visas for yourself (as an investor, partner, or general manager), for employees, and for your own dependents once your visa is active, but how many is governed by a visa quota, not an open-ended right.

On the mainland, your visa quota is generally tied to the size and type of your registered office: a small office might allow a handful of visas, while a larger leased space allows for more. If you need to sponsor more staff than your office size allows, you can typically apply to increase the quota, sometimes with additional fees or a larger office requirement.

In free zones, the visa quota is usually built directly into the setup package you buy, a "1 visa" package, a "3 visa" package, and so on, with each additional visa slot costing roughly AED 3,000 to 7,500 depending on the zone. Needing more visas later generally means upgrading your package or workspace, not a separate negotiation.

Either way, once you personally hold a company-sponsored visa, you can sponsor dependents (spouse, children, sometimes parents) the same way an employed or freelance visa holder would, subject to the standard minimum income threshold that applies across the UAE.

Reviewing a UAE company formation application with STRATEX

Compliance You Can't Skip After Licensing

A full company comes with ongoing regulatory obligations that a simple freelance permit doesn't carry to the same degree. None of these should be a surprise once the licence is active, but they're easy to underestimate at setup:

Corporate Tax

UAE corporate tax applies at 0% on the first AED 375,000 of annual taxable profit and 9% above that. Every taxable entity, including most free zone companies, needs to register for a Corporate Tax Registration Number, generally within three months of incorporation, and file annually through the Federal Tax Authority's EmaraTax portal. Businesses with annual revenue under AED 3 million can currently elect Small Business Relief, treating them as having no taxable income for that period, though this doesn't apply to free zone companies claiming the separate 0% qualifying-income regime or to large multinational groups.

VAT Registration

If your taxable turnover crosses AED 375,000 in a rolling 12-month period, VAT registration becomes mandatory; below that, you can register voluntarily once you cross AED 187,500, which some new companies do anyway to reclaim VAT on setup costs. Once registered, standard UAE VAT is charged and filed periodically through EmaraTax.

Ultimate Beneficial Owner (UBO) Declaration

Most mainland (and many free zone) companies must file a declaration identifying the individuals who ultimately own or control the company, separate from the trade licence itself, as part of the UAE's anti-money-laundering framework.

Emiratisation

If you're setting up on the mainland and expect to grow past 20 employees (or you're in one of several designated sectors), you'll eventually need to meet UAE national hiring quotas, with fines for missed targets. Free zone companies are currently exempt from this requirement, which is one more point in free zone's favor for smaller teams, though this policy has shifted before and is worth rechecking as your headcount grows.

Economic Substance

The old standalone Economic Substance Regulations filings were discontinued for financial years after 2022. If your company falls into specific pre-2023 "Relevant Activities" categories (banking, insurance, fund management, holding companies, and similar), historical filings from that period can still matter, but current-year planning no longer needs a separate ESR return. Substance requirements now live inside the corporate tax framework instead, particularly for free zone companies trying to qualify for the 0% rate.

None of these obligations should change your decision to set up a company, but budgeting for good accounting and bookkeeping from day one, rather than scrambling once a deadline appears, will save you real money and stress.

Key Terms Explained

Trade Licence vs. Establishment Card

The trade licence is your permission to operate a specific activity; the establishment card is what lets that licence sponsor visas. You need both, and most setup packages bundle them.

MOA vs. MOU

A Memorandum of Association formally sets out shareholding and governance for a multi-owner company. A Memorandum of Understanding is a lighter, often preliminary agreement between parties before the MOA is finalized, sometimes used for single-owner structures instead of a full MOA.

Local Service Agent (LSA)

A holdover concept from before the ownership reforms, still used for a small number of professional and regulated activities where a UAE national is engaged (for a fixed annual fee, not equity) to handle certain government liaison functions, without taking any ownership stake.

Government Relations Officer (GRO) / PRO

Short for Public Relations Officer, this is the person (in-house or outsourced to a service provider) who handles the ongoing paperwork: visa renewals, licence renewals, and government portal submissions. Most new companies without in-house PRO capacity outsource this to their setup provider.

Ejari / Tawtheeq

The official tenancy registration systems for Dubai and Abu Dhabi respectively. A mainland company's office lease has to be registered here before a licence can be issued or renewed.

Share Capital

The value shareholders commit to the company on paper. Most mainland activities no longer require you to actually deposit a minimum share capital in a bank account before licensing, though some regulated activities and free zones still set minimums, so confirm this for your specific activity and jurisdiction.

Qualifying Free Zone Person

A free zone company that meets specific conditions (maintaining adequate substance in the UAE, earning "qualifying income," and meeting other criteria) and can therefore access the 0% corporate tax rate on that qualifying income, rather than the standard 9% above the AED 375,000 threshold.

General Costs

These are rounded, indicative ranges to plan around, not quotes; real numbers vary widely by emirate, activity, and provider.

Component Mainland (rough range) Free zone (rough range)
Trade name reservation & initial approval AED 600-1,500 Often bundled into package
Trade licence AED 10,000-30,000 AED 5,000-35,000 depending on zone tier
Office / Ejari or Tawtheeq lease AED 15,000-25,000+/yr Often bundled (flexi-desk to private office)
MOA / notarization AED 1,000-2,500 Often bundled
Establishment card AED 2,000-2,500 Often bundled
Per-visa cost (investor or employee) AED 3,000-7,500 each AED 3,000-7,500 each
Corporate bank account Usually no direct fee, but minimum balance requirements apply

Why mainland tends to cost more overall: the mandatory real office lease is usually the single biggest line item, and it's a recurring annual cost rather than a one-time setup fee. Free zones bundle a workspace into the package price, which is a large part of why they're often cheaper to start, especially for smaller teams that don't need a dedicated office yet.

Renewals

Your trade licence renews annually regardless of mainland or free zone, and renewal typically costs somewhat less than the first year since name reservation and initial approval fees aren't repeated. Your office lease (mainland) or workspace package (free zone) generally renews on the same annual cycle and is one of the more common places costs quietly increase year over year, so it's worth reviewing rather than auto-renewing. Visas, Emirates IDs, and health insurance follow the same multi-year renewal logic covered in our freelance visa guide: each runs on its own clock, and it's entirely possible to have a 1-year licence renewing annually while a visa underneath it runs for 2 or 3 years.

How to Read a Promotion Without Getting Tricked

1

"Company setup from AED X" that's really just the licence. The advertised number is almost always the bare licence fee. Office lease, establishment card, visa costs, medical tests, Emirates IDs, and insurance for every person you sponsor get added afterward. Ask for the all-in cost to get your licence issued and your first visa stamped, not just the licence number.

2

"No office needed" claims for mainland companies. A handful of low-cost mainland instant-licence products genuinely skip the office requirement for very specific activities, but most mainland companies do need a registered lease. If a mainland quote has no office cost anywhere in it, ask exactly why.

3

Vague "100% ownership" claims without naming your specific activity. Ownership reform covers most activities, but not every single one. A provider who confirms 100% ownership without first asking what you'll be licensed for is skipping a step.

4

Share capital scare tactics. Some providers imply you need to deposit a large share capital amount to look credible, when most mainland activities no longer require a deposited minimum at all. Ask specifically whether your activity has a real regulatory minimum or whether it's a suggestion.

5

Bundled visa counts that don't match your actual headcount plans. A "3 visa" free zone package sounds generous until you realize you need 5. Confirm the cost of adding visas beyond the package before you commit to a zone based on its advertised starting price.

6

No mention of ongoing compliance costs. Corporate tax registration, VAT registration (if applicable), and UBO filing are separate obligations most providers should flag upfront, not bill for as a surprise a few months in.

7

"Guaranteed bank account" promises. No provider can guarantee a specific bank will approve your corporate account, since banks run independent compliance checks. Be wary of anyone who promises this outright rather than explaining realistic timelines and which banks tend to work best for your activity and nationality mix.

8

Unlicensed or unverifiable setup agents. Before paying a deposit, confirm the provider's own trade licence number and that they're a findable, licensed business, not just a website and a WhatsApp number.

Frequently Asked Questions

Can I own 100% of my UAE mainland company as a foreigner?

For most business activities, yes, since the federal ownership reforms removed the requirement for a UAE national to hold 51%. A limited list of strategically important activities still carries local ownership or partnership rules, so confirm your specific activity before assuming full ownership applies.

Do I need a physical office for a free zone company?

Usually no. Most free zone packages bundle a flexi-desk or shared workspace that satisfies the registration requirement without you renting real space, though larger visa allocations sometimes require upgrading to a dedicated office.

How many employees can I sponsor visas for?

It depends on your visa quota, which is tied to office size on the mainland and to your package tier in most free zones. You can generally apply to increase your quota later, sometimes with additional fees or a larger office.

Do I need to pay corporate tax if I'm a small company?

You still need to register for corporate tax regardless of size, but if your annual revenue is under AED 3 million, you can currently elect Small Business Relief and be treated as having no taxable income for that period, subject to the usual conditions and exclusions.

Can I convert my freelance permit into a full company later?

Yes, though it's a fresh company registration rather than an upgrade of your existing licence, so most of the setup fees apply again. It's worth thinking honestly about your growth plans before choosing freelance purely to save money upfront, if you're fairly confident you'll need to hire or take on partners within a year or two.

What's the real difference between mainland and free zone if I just want to sell internationally?

If your clients are entirely outside the UAE mainland market, a free zone is usually cheaper, faster to set up, and gives you full ownership by default, with no meaningful downside for that specific use case. Mainland becomes worth it once UAE-based clients or government contracts become a meaningful part of your revenue.

Is a Local Service Agent still required for my company?

For the large majority of activities, no, since ownership reform removed the need for a local partner or agent for most business types. A small number of professional and regulated activities still use the LSA structure, so confirm this for your specific licence category.

How long does opening a corporate bank account take?

Plan for 2 to 6 weeks after your licence is issued, sometimes longer depending on your activity, shareholder nationalities, and the bank's own compliance process. This is consistently the step people underestimate when planning their timeline.

Have a different question? Browse our full FAQ page.

Related Reading

Freelance Permit or Full Company

Which route actually fits your plans, with worked examples for each.

Opening a UAE Mainland Subsidiary

The branch and subsidiary route for an existing foreign company.

UAE Company Formation

Mainland, free zone, and offshore incorporation, managed end to end.

Ready to Set Up Your UAE Company?

Choosing the wrong structure or skipping a compliance step is the most common way company formation ends up costing more or taking longer than it should.

Talk to STRATEX Corporate Services. We handle full company formation end to end: mainland, free zone, and offshore structures, corporate banking support, VAT and corporate tax registration, PRO services, and Golden Visa sponsorship, all under one clear, itemized quote.

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Disclaimer: company formation costs, ownership rules, visa quotas, and tax and compliance obligations are set by UAE federal and local authorities and are subject to change. This article reflects our general understanding of current practice and is provided for informational purposes only, not as legal or tax advice. Please contact STRATEX Corporate Services directly to confirm the latest requirements and an itemized cost for your specific activity.