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Business Setup in Dubai: Everything You Need to Know

January 8, 2023

There’s nothing like building your own company from scratch; in Dubai, there are plenty of opportunities to do just that. The city is a hub for entrepreneurs from all over the world, and with the right planning and preparation, you can have your own successful business setup in Dubai.

Whether you’re a fledgling entrepreneur ready to spread your wings, or an experienced business owner looking to repeat the experience, the process can often be overwhelming.

With so much to think about, from visas and licenses to finding the perfect office space, it’s no wonder that many people shy away from setting up shop in Dubai.

But take heart! With a little bit of research and forward planning, anyone can set up a business in Dubai. And with the city’s renowned business-friendly environment, there’s no better place to do it.

Read on for our handy guide to help you with your business setup in Dubai!

Why have a business setup in Dubai?

The first question you must ask as you formulate your business plan is: what are the benefits of a company setup in Dubai? The answer is critical for your success.

So, what are some of the benefits of a Dubai new business setup?

  • There is no tax on personal or corporate income
  • Dubai is centrally located and provides easy access to African, Middle East, and Asian markets
  • The infrastructure in Dubai is world-class and includes a modern airport, seaport, and roads
  • The cost of living in Dubai is relatively low compared to other major cities
  • English is widely spoken in Dubai

So, now you’re committed to a Dubai company formation, let’s help you determine the nature of your business.

Defining your new business setup in Dubai

As much as you want to hit the ground running (we get it, this is exciting stuff!), there are things about your Dubai new business setup you need to decide and conceptualize to be successful. Here are some questions to help you ensure success in your endeavors.

What is your business going to do?

You need to be clear about the products or services you want to offer and be even clearer on the problem your business idea will solve. Are you going to be strictly a brick-and-mortar business, or are you looking to develop a strong e-commerce presence too?

business plan

Who are your target customers?

You can’t be everything to everyone, so instead, focus on a specific target market. Knowing who your target customer is will help you determine what they want and how best to reach them instead of wasting a lot of time and money trying to reach everyone.

How does your business differ from the competition?

To succeed in any industry, you need to offer something your customers want and your competitors don’t have. This could be a unique product or service, a competitive price point, or anything else that would make someone choose your business over another.

If you can’t think of anything that would make your business stand out, then it’s time to go back to the drawing board.

Make a plan for your business setup in Dubai and stick to it

Now that you know the product or service you want to sell and the audience you’re selling to, the next step is to create a business plan. This document outlines your business goals, strategies, and how you plan to make money.

There’s no one-size-fits-all template for a business plan, but some key components should be included, which we’ll break down for you.

An executive summary

This is a brief overview of your business, including your mission statement and your products or services. An executive summary should also include your target market and what makes your business setup in Dubai unique.

Your company profile

Think of this as a snapshot of your company that should include your company history, if you have one, the names of the current management team, and the board of directors in your Dubai company formation.

Legal structure of your business setup in Dubai

What type of business are you going to have? Are you going to be a sole proprietor, partnership, or company?

  • Sole Proprietorship: If you are the only business owner, then you are a sole proprietor. With this simple business structure, you completely control your business and get all the profits. The biggest downside is that you also have all the liability and risk if something goes wrong.
  • Limited Partnership: This type of partnership is one between two or more partners in which only the general partner takes responsibility for the obligations and debts of the partnership, while the other partners – the limited partners – have limited liability.
  • General Partnership: In a general partnership, each person is jointly and individually responsible for the partnership’s obligations. This type of business structure is often used for businesses with two or more owners, such as husband and wife business teams.
  • Limited Liability Company (LLC): This company is a type of partnership in which each partner’s liability is limited to their investment in the company. This is the most commonly seen type of business structure for small businesses in Dubai.

Products and Services

Your products and services

It’s important to describe your products and services in detail because this is what potential customers will use to decide if they wish to do business with you. In addition, include any unique selling points (USPs) that might set your business apart from the competition.

Market analysis

Research and describe your target market, including any pain points your products or services address with them, because a good market analysis can differentiate between a successful and unsuccessful Dubai company formation.

When starting a new business in Dubai, it’s important first to understand the local market conditions and what potential customers want. The best way to understand your market is to speak with people who are already in business and ask them about their experiences and what they think makes a successful business in Dubai.

If, however you are starting an online business like a blog or an international ecommerce store, it is important to do your research on international markets, to seize the best opportunities in your field and set yourself up for success.


Get specific about your competition here, asking who your main competitors are, their strengths and weaknesses, and how you will position yourself in the market.

There is no one-size-fits-all answer to this question, as the competitive landscape will vary depending on your industry. However, some general tips on how to conduct competitor analysis include:

  • Research your competitors online using tools and see what they’re doing well and where they could improve.
  • Try to get in touch with their customers and find out what they like and don’t like about the product. This will help you improve your product and make it more appealing to the market.
  • Know your target audience and build a marketing strategy around them. Focus on what they want and need, and craft your message accordingly.
  • Stay updated on the latest industry trends and Dubai’s overall business climate. This will help you make informed decisions about your business direction and growth potential.

Management team and organizational structure

Any good business plan should lay out who you have running the business and the hierarchy they are working within. It’s important to do this because:

  • You need to show that you have a management team in place that can execute your business plan.
  • You need to establish who is responsible for what within your organization.
  • It will help attract investors and partners.

Financial projections

Next on the list in creating a comprehensive business plan for your Dubai company formation is to lay out financial projections for the next three to five years. Start by estimating the amount of start-up capital you’ll need.

This process should include the money needed to get your business off the ground and any additional funds you’ll need to keep it running until it becomes profitable. Once you have a good idea of your start-up costs, you can begin searching for financing options.

What’s the location for your business setup in Dubai?

The next question you need to address with your business plan is where you will sell your products or services. As the saying goes, location, location, location! Your Dubai new business setup must be located in the right place.

There are many factors to consider when deciding on a location for your business, such as foot traffic, access to public transport and parking, competition, and visibility.

Another important element to consider is if you will be operating in a Free Zone, which would afford you many types of tax exemptions, but with some restrictions, or if you’re operating in the Mainland, with fewer breaks but also fewer restrictions on how you operate.

Systems and Processes

Now that your business plan has addressed what you’re going to do and where you’re going to do it, you will need to state how you will do it. In other words, what systems and processes will you have in place for addressing:

  • Market research and target audience analysis
  • Product development
  • Manufacturing or production, if applicable
  • Marketing and advertising
  • Sales
  • Customer service

Make sure to have these processes in place before you start selling; it will pay off in the long run.

Cross Your Is and Dot Your Ts

Now that you’ve completed your business plan, you still have a few steps before you hit the finish line. There are several licences you need to sign up for and registrations you need to complete your company setup in Dubai, including:

 The Business Licence (Trade Licence)

You will need a business licence to operate in Dubai. The type of business you want to set up will determine the type of licence you need.

  • Commercial license. In Dubai, all businesses must have a commercial licence to operate legally. The type of licence depends on the nature of your business; there are over 50 different licences available, so it is important to consult with a professional before beginning the application process.
  • Industrial license. An industrial licence in Dubai is required if your business conducts any industrial or commercial activity and the business is not a sole proprietorship.
  • Trade license. You need a trade licence to operate your business in Dubai, and you must first register your company with the Department of Economic Development (DED) to get one. You must submit your company name, activity type, chosen location, and other required documents to do this.
  • Employment visa. To get your employment visa, you must apply to the General Directorate of Residence and Foreigners Affairs (GDRFA). The GDRFA will then issue a work permit, allowing you to live and work in Dubai.
  • Residency visa. A crucial step for any Dubai new business setup is ensuring that you, as the owner or manager, have a residency visa. You can apply for a residency visa through the GDRFA mentioned above, and the type of visa you need will depend on your nationality and the nature of your business.
  • Register for VAT. Unless your business is exempt, you must register for Value Added Tax (VAT) once your company’s annual turnover exceeds AED 375,000.

While the list of licenses and registrations needed for your business setup in Dubai might seem endless, most of these tasks can be completed online through the Dubai Department of Economic Development or in person at their offices.

Reach out for help with your business setup in Dubai

Hopefully, this article has helped you formulate a plan for your company setup in Dubai. While the process may seem daunting, some organizations exist solely to guide you through the process.

If you are considering starting a business in Dubai or expanding your current business to Dubai, then Virtuzone is the perfect partner. They will help you with everything from choosing the right location for your business to getting your visa and work permit sorted out.

Virtuzone has a team of experienced professionals who are passionate about helping businesses succeed in Dubai. So what are you waiting for? Contact Virtuzone today and get started on your journey to success for your business setup in Dubai!

Damian - AuthorAuthor Bio

Damian, better known as Damo, is an entrepreneur and marketing veteran with a career spanning 17+ years and nine startups across three continents. From ad agencies in Dubai to crowd-funding platforms in Ghana, Damo has garnered his experience from around the world and now is sharing everything he knows at https://damobrennan.com/.

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