How to Set Up an Entity in the United Arab Emirates (Dubai LLC)

Setting up a legal entity in the United Arab Emirates (UAE)—especially in Dubai—is an increasingly attractive option for international businesses and investors. Dubai’s strategic location at the crossroads of Europe, Asia, and Africa, combined with business-friendly regulatory reforms and modern infrastructure, makes it an ideal hub for commercial expansion. In 2025, many foreign investors favor a Limited Liability Company (LLC) because it provides flexibility, limited liability, and the ability to operate directly in the UAE mainland market, unlike Free Zone or offshore structures that have more limited onshore trading rights.

While Dubai’s setup process is more streamlined than in many jurisdictions, entrepreneurs must navigate licensing, corporate structure choices, documentation, and compliance with federal tax and trade regulations. Common challenges include selecting the right license and business activity, meeting office and lease requirements, and understanding evolving tax rules. However, the benefits, such as limited liability and clear operational legitimacy across the UAE, often outweigh the bureaucratic hurdles.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in the United Arab Emirates?

“Opening an entity” in the UAE means registering a company with the relevant Dubai economic authorities, obtaining a trade license, and securing legal status to conduct defined business activities. For most foreign companies, this results in an LLC that can contract, hire, hold assets, and operate commercially within the UAE.

Entity overview in the United Arab Emirates

Below, find a snapshot of key elements related to a Dubai LLC setup:

Step-by-step guide: How to open an entity in the United Arab Emirates

Step 1: Choose the right structure

The most common entity for foreign investors in Dubai is an LLC, which provides limited liability and an operational footprint across the UAE mainland. It suits trading, consulting, services, and many commercial ventures. Free Zone entities allow 100% foreign ownership and are often chosen for their simplified setup and tax benefits. However, they are generally not permitted to trade directly in the UAE mainland. To sell goods or services onshore, a Free Zone company must work through a local distributor or agent, or establish a separate mainland entity.

Offshore companies, by contrast, are primarily designed for international holding, asset protection, and global trading. They cannot conduct business within the UAE, cannot lease office space locally, and cannot issue UAE residence visas.

Step 2: Verify business name availability

Reserve a trade name through the DET portal. The name must be unique, not conflict with existing entities, and adhere to UAE naming rules (no offensive or restricted terms). DET’s online reservation system lets applicants check availability and secure the name before licensing.

Step 3: Prepare incorporation documents

Typical documents required include:

• Completed license application via DET
• Copies of the passports of shareholders and appointed managers
• Memorandum of Association (MoA) outlining ownership and management structure
• Lease agreement for the office space (registered via Ejari)
• Initial approvals from DET
• Any additional approvals required for specific business activities

Step 4: Register with the Department of Economy and Tourism (DET)

Submit all documents and applications through the DET online portal or service centers. After initial approval, trade name reservation, and MoA submission, DET issues the LLC trade license, commercial registration number, and establishment card, empowering legal operations.

Step 5: Register for tax and social security

Register your entity with the FTA to obtain a Tax Registration Number (TRN). You must register for corporate tax under current law and VAT if your taxable supplies exceed AED 375,000 per year. VAT returns are filed through the FTA’s EmaraTax portal.

Step 6: Open a corporate bank account

Open a corporate account with a UAE bank. Under the new Dubai Unified Licence (DUL) framework, business bank accounts can be opened more quickly, potentially in as little as five days after license issuance. Banks will require corporate documents, shareholder IDs, proofs of address, and a business plan.

Step 7: Set up payroll and employment compliance

Once incorporated, register as an employer with the relevant authorities and arrange work visas for employees. Comply with UAE labor laws, including employment contracts, labor cards, health insurance, and Wage Protection Systems (WPS).

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Post-registration obligations

Companies in the UAE must comply with ongoing requirements, including:

• Tax and financial reporting: File corporate tax returns and VAT returns as scheduled via the FTA
• Corporate registers: Maintain updated records of shareholders, directors, and beneficial owners
• Compliance tracking: Track all company filing and tax deadlines to avoid penalties.
• License renewals: Renew business licenses annually with DET
• Recordkeeping: Retain financial, payroll, and HR records for the minimum period specified by UAE law
• Employment law compliance: Ensure ongoing adherence to labor, social security, and employee benefits requirements

Taxes and financial considerations

You are responsible for:

• Corporate income tax: 0% on profits up to AED 375,000, 9% above this threshold.
• VAT: Standard rate of 5% when annual revenue exceeds AED 375,000
• Payroll/social contributions: No federal social security contributions for expatriates, but employers must cover end-of-service gratuity and contributions for UAE nationals under social security schemes
• Accounting standards: Financial statements must align with UAE regulations; audited accounts may be required for certain licenses.

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into the United Kingdom—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in the United Arab Emirates?
Typically 2–8 weeks, depending on activity approvals and documentation.

What is the minimum capital required?
There is no prescribed minimum capital for most LLC activities; capital is set by shareholders. Find out how long setup takes with our Entity Setup Calculator.

Can foreign companies own 100% of an entity in the United Arab Emirates?
Yes. Many Dubai mainland LLC activities allow 100% foreign ownership, with some regulated sectors still requiring a local service agent.

Do I need a local director or representative?
Not generally for most activities. In specific regulated sectors, a UAE national service agent may be required.

How much does it cost to register an entity?
Setup costs typically range from AED 15,000–40,000+ (≈ $4,080–10,890 USD), depending on license type and office requirements. Find out the setup cost with our Entity Setup Calculator.

Can Deel help me open an entity in the United Arab Emirates?
Yes. Deel Entity Setup manages the end-to-end process — from registration to payroll compliance—in over 100 countries. Deel’s local experts handle documentation, filings, and legal requirements on your behalf.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.