Home Business Guide How to Start a Small Business in Dubai 2022

How to Start a Small Business in Dubai 2022

Unlocking the Secrets to Small Business Success in Dubai: Your Ultimate Guide to Entrepreneurial Triumph

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Article Highlights: In this article, we will explore what are benefits of starting a business in Dubai, how to start a small business in Dubai and what are documents required to start a business in Dubai.

Dubai, a city synonymous with luxury, innovation, and business opportunities, is an ideal place to start a small business. Known for its favorable tax policies and strategic location, it’s no wonder that entrepreneurs flock to this bustling metropolis. In this guide, we will explore the essential steps to start a small business in Dubai and provide valuable tips to help you succeed in your entrepreneurial journey.

Benefits of Starting a Business in Dubai

Starting a business in Dubai offers numerous advantages, including:

  • Strategic Location: Dubai’s prime location connects Europe, Asia, and Africa, offering access to global markets and trade routes.
  • Business-friendly Environment: Dubai provides a pro-business environment with simplified registration processes and minimal bureaucracy.
  • Tax Benefits: Dubai offers tax-free zones with exemptions from corporate and personal income tax, and low import/export duties.
  • Infrastructure: The city boasts world-class infrastructure, including state-of-the-art transportation, telecommunications, and utilities.
  • Diverse Economy: Dubai has a thriving and diverse economy, providing opportunities in various sectors, such as tourism, finance, real estate, and technology.
  • Skilled Workforce: Access to a multicultural and highly skilled workforce allows businesses to tap into a vast talent pool.
  • Safety and Stability: Dubai is known for its political stability, low crime rate, and strong legal framework, which create a secure environment for businesses to operate.

These factors make Dubai an attractive destination for entrepreneurs and investors seeking to establish and grow their businesses.

How to Start a Small Business in Dubai

Choose the Right Business Structure

Before you begin, it’s crucial to determine the most suitable business structure for your enterprise. Dubai offers various options, including Limited Liability Companies (LLCs), Free Zone Companies, and Offshore Companies. Research each structure’s advantages and requirements before deciding.

For instance, an LLC is a popular choice due to its limited liability protection, whereas a Free Zone Company provides 100% ownership and tax exemptions. To learn more about these options, visit the Dubai Department of Economic Development (DED) website.

Identify Your Business Activity

Dubai has a diverse range of business activities you can engage in. It’s essential to define your niche and select an appropriate business activity. Keep in mind that some activities require special approvals from certain authorities.

For example, if you’re opening a restaurant, you’ll need approval from the Food Safety Department.

Select the Ideal Business Location

Choosing the right location for your small business is critical. Dubai offers two main options: mainland areas and free zones. Mainland areas, regulated by the DED, allow you to trade with the local market and operate within the city. On the other hand, free zones are designated areas that offer unique benefits, such as tax exemptions and 100% foreign ownership. Popular free zones include Dubai Internet City, Jebel Ali Free Zone, and Dubai Media City.

Draft a Solid Business Plan

A well-crafted business plan is essential for securing investments and guiding your business’s growth. Your plan should cover your business’s objectives, target market, marketing strategy, financial projections, and operational structure. The Dubai SME website provides resources and support to help you create an effective business plan.

Acquire the Necessary Licenses and Approvals

To operate a small business in Dubai, you’ll need to obtain the appropriate licenses and approvals. This process involves registering your business with the DED or the relevant free zone authority. The type of license you need depends on your business activity. The three main categories are commercial, industrial, and professional licenses.

Additionally, some activities require special approvals from specific authorities, such as the Ministry of Health and Prevention for healthcare-related businesses.

Open a Corporate Bank Account

Once you’ve obtained the necessary licenses, it’s time to open a corporate bank account. Shop around and compare various banks’ offerings, such as minimum balance requirements, transaction fees, and online banking facilities.

Some popular banks for small businesses in Dubai include Emirates NBD, Mashreq Bank, and Abu Dhabi Commercial Bank (ADCB).

Set Up Your Workspace

Whether you need a small office, a retail shop,or a co-working space, Dubai has a multitude of options to suit your needs. When selecting a workspace, consider factors such as accessibility, amenities, and rental costs.

Some popular co-working spaces in Dubai include Nest Dubai, Astrolabs, and Our Space.

Develop a Strong Marketing Strategy

In the competitive business landscape of Dubai, an effective marketing strategy is crucial for success. Identify your target audience, and tailor your messaging accordingly. Utilize a mix of traditional and digital marketing channels, such as print advertisements, social media, and search engine optimization (SEO).

For guidance on best practices, refer to resources such as the Dubai Chamber of Commerce’s Marketing Guide.

Hire the Right Team

Recruiting a skilled and dedicated team is essential for your small business’s success. Dubai offers a diverse talent pool to choose from, but navigating the local labor laws and regulations is vital. Familiarize yourself with the UAE Labour Law and ensure you comply with all requirements, including visa sponsorship, working hours, and employee benefits.

Seek Mentorship and Networking Opportunities

Connecting with experienced entrepreneurs and industry professionals can provide invaluable insights and support as you build your small business in Dubai. Participate in networking events, conferences, and workshops to expand your network and gain industry knowledge. Organizations like Dubai Startup Hub and TiE Dubai offer various resources and events for small business owners.

What documents required to start business in Dubai?

The documents required to start a business in Dubai may vary based on the business structure and activity. Common documents include:

  • Passport copies of the shareholders and directors.
  • Visa or Entry Stamp copies for foreign shareholders and directors.
  • No Objection Certificate (NOC) from the current sponsor for UAE residents.
  • Trade name reservation certificate.
  • Initial approval from the relevant authorities.
  • Memorandum of Association (MOA) or Local Service Agent (LSA) Agreement.
  • Office lease agreement.
  • License application form.

Additional documents may be required for specific business activities or special approvals from certain authorities.


Starting a small business in Dubai can be an exciting adventure with its own set of challenges. By using this guide and staying informed about local rules, you can make your way through Dubai’s bustling business world. Remember that building a successful business takes time, patience, and a willingness to learn. So, take your chance and join the thriving economy of Dubai as a proud small business owner.


Q1. How much does it cost to start a small business in Dubai?

Answer: The cost to start a small business in Dubai varies depending on factors such as business structure, location, and licensing fees. Generally, costs can range from AED 10,000 to AED 50,000 or more for initial setup, including registration, licensing, and office space.

Q2. Which business is easy to start in Dubai?

Answer: In Dubai, service-based businesses, such as consultancy, digital marketing, and event management, are relatively easy to start due to lower setup costs and minimal regulatory requirements. However, choosing the right business depends on your skills, interests, and market demand.

Q3. Which city is best for business in Dubai?

Answer: Dubai is itself a city within the United Arab Emirates, and it is known for its excellent business environment. Within Dubai, you can choose between various business hubs, such as mainland areas or free zones like Dubai Internet City, Jebel Ali Free Zone, and Dubai Media City, depending on your specific business requirements and objectives.

Q5. Is business tax free in Dubai?

Answer: Yes, businesses operating in Dubai’s free zones typically enjoy tax-free status, with exemptions from corporate and personal income tax. However, since the introduction of Value Added Tax (VAT) in 2018, most goods and services are subject to a 5% VAT rate, which businesses must collect and remit to the government.

Q6. What business are profitable in Dubai?

Answer: Profitable businesses in Dubai often include sectors such as tourism and hospitality, real estate, retail, e-commerce, technology, and logistics. Success in these areas is due to factors like the city’s strategic location, infrastructure, and favorable business environment. However, profitability ultimately depends on market demand, business strategy, and efficient operations.

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