Creating a business for expansion to Dubai by UK entrepreneurs is an attractive proposition due to Dubai’s thriving economy as well as its strategic position in the region. UK Foreign Direct Investment (FDI) into the UAE soared to around £5 billion in 2020, the country is still a popular and lucrative place to do business. As a UK business establishing in Dubai, you will find a thriving market – the UAE is the UK’s largest export market in the Middle East and Dubai is a gateway to the region due to the infrastructure, it’s world class infrastructure and an extensive expatriate British community. The emirates are competing to attract business with low taxes (corporate tax on profits over AED 375,000 or approximately US$100,000 is 9% and no personal income tax) and business incentives for foreign companies.
However, setting up a business in Dubai from the UK involves navigating a complex regulatory landscape. Success requires adapting to local laws, culture, and costs. Below we explore the main hurdles – from UAE mainland vs free zone for businesses and legal requirements, to cultural differences, visa and sponsor rules, and financing – that UK companies must tackle when starting a company in Dubai for UK businesses. We also outline the company setup process UAE, so you know what to expect step-by-step.
One of the first decisions for any foreign investor is choosing between a mainland company (onshore) and a free zone entity. This choice has major implications for ownership, licensing, and operations. Setting up a mainland company in Dubai grants maximum flexibility: mainland firms can trade anywhere in the UAE (and with the government) and can open branches across the Emirates. By contrast, starting a company in Dubai free zone allows 100% foreign ownership and simplified processes, but restricts you to doing business within the zone or export markets.
UK firms expanding to Dubai face many practical and regulatory challenges. Challenges for UK businesses in Dubai often boil down to understanding and complying with local laws and customs while managing costs and partnerships. It’s a very different environment from the UK’s regulated market, so expert guidance is invaluable. Below are some of the most common hurdles encountered when setting up a company in Dubai mainland:
Dubai’s business rules differ greatly from the UK. You must obtain a commercial license for your exact activity, and approvals can vary by emirate and sector. For instance, if you are starting a company in Dubai for UK businesses in construction, you’ll need not only a DED trade license but also special permits. In all cases, Dubai company registration requirements include securing a trade name, getting initial approval, drafting a Memorandum of Association (or local service agent agreement), and leasing a physical office. Missing any step can delay your license.
Traditionally, an LLC (Limited Liability Company) on the Dubai mainland required a UAE national sponsor owning 51%. Choosing the wrong local partner can cause ownership disputes and risk your investment. Although recent laws now permit 100% foreign ownership in many sectors, the sponsor mechanism is still needed for certain activities. UK businesses must carefully understand these rules and structure shareholding accordingly. Specialists often advise setting up a civil company or professional license if you can be 100% owner (e.g., as a consultant or sole establishment).
Any foreign-owned business in the UAE must sponsor visas for itself and its employees. Obtaining employment visas and work permits can be time-consuming. Visa approvals depend on your office space (each visa requires a set floor area) and license.
Dubai business regulations for UK companies also require compliance with the Ministry of Human Resources’ rules. UK investors often find that “hiring local personnel can be difficult as many criteria must be followed” for each expatriate visa. Furthermore, Dubai’s Wage Protection System means payroll must be documented strictly, adding administrative burden.
Although English is widely spoken, Arabic remains the UAE’s official language. Crucial business contracts, employment records and government communications must often be in Arabic. This can surprise UK founders. Business etiquette is also more formal: meetings may start late or off-schedule, and social customs (gender norms, gestures, dress codes) differ from Europe. In short, business setup challenges Dubai UAE include adjusting to local communication styles and working weeks (Sunday–Thursday, with Friday off).
Opening a corporate bank account in the UAE can take months without local assistance. UK companies often underestimate this delay, but banks are stringent about due diligence. Certain sectors (like fintech or trading) face extra scrutiny. On the plus side, Dubai has a robust financial system, but it pays to have a local financial advisor for your business like Lanop business and Tax Advisors. Managing cash flow is also critical, consultants recommend keeping sufficient working capital since getting credit in UAE requires building local banking relationships
The UAE’s new 9% corporate tax (effective on profits above AED 375,000) and 5% VAT mean UK firms must adjust their financial planning. Although these rates are low, compliance is mandatory. Failure to register for VAT can incur hefty fines. UK companies must ensure they file accurate returns under FTA rules. Importantly, many UAE free zones offer 0% tax if specific conditions are met, so if you are considering free zone versus mainland, note that tax benefits may sway your choice. Also, there are no personal income taxes, but there is no UK-style pension either – meaning founders need an exit/retirement strategy, since leaving the business also revokes residency.
Dubai is tax-efficient, but not necessarily cheap. Office rent, utilities, sponsor fees and visa costs add up. According to UK advisers, you must budget for the cost of setting up a business in Dubai – commercial rent, license fees, and salaries – to ensure your venture is viable. Lifestyle and networking expenses can also be high because Dubai is not necessarily cheap. Networking, office space, and lifestyle costs must be factored into financial planning. Failure to account for these can stall your expansion.
Dubai has a vibrant startup scene, but also intense competition. UK founders need deep market research to tailor their offering to local preferences. Companies must understand consumer behavior and market trends in the UAE. It may not be enough to copy your UK model – you may have to adapt pricing, branding or even product features to suit the region. Conversely, Dubai’s many accelerator programs and high-growth investors can also boost your scaling if you fit into a lucrative sector (like tech or tourism).
To set up a company in Dubai mainland, UK entrepreneurs must follow a multi-step process overseen by the Department of Economy (DED) in the chosen emirate. After these steps, you can open a corporate bank account and begin hiring staff. Throughout this process, it’s crucial to work with local specialists or PRO agents who can navigate Dubai’s bureaucracy and ensure nothing is missed. These steps include:
First, select your business activity (e.g., trading, consulting, construction) and legal structure e.g., LLC, civil company, branch). Some activities (like construction or education) have extra requirements. Choose the form that fits your needs: for example, an LLC is common for most industries, whereas a sole establishment or branch might suit smaller ventures. (An LLC usually requires a UAE sponsor).
Submit a unique trade name to the DED. It must comply with UAE naming rules (no profanity or religious references).
Apply for initial approval (No Objection Certificate) from DED. This confirms the government has no objection to your business and allows you to proceed with paperwork.
Prepare the Memorandum of Association (MOA) if forming an LLC or partnership, or a Local Service Agent (LSA) agreement for professional companies. The MOA spells out ownership and management terms. (Public/private joint-stock companies require additional documents.)
Secure a physical office or commercial space, as a mainland license must link to a premises. In Dubai, the tenancy contract must be registered on Ejari (the official tenancy portal). Note that different emirates have minimum space requirements per visa.
Some fields need extra permissions. For example, a construction firm must obtain a Municipality building permit (the G+1 permit) and environmental/civil work clearances. Any business involving healthcare, education, etc., may need ministry approval. Check early whether your activity is regulated by another authority.
Gather all required paperwork and submit it to the DED for final review. This typically includes copies of the partners’ passports, the Ejari lease agreement, initial approval certificate, any external approvals (as above), the MOA or LSA, and the completed trade license application.
Once approved, pay the government fees (license, registration, name clearance, etc.). After payment, you’ll receive your trade license or commercial license. This legalizes your company.
Finally, register your entity with the local Chamber of Commerce (required for all businesses) to complete the setup.
Different industries have unique rules. For instance, entrepreneurs wondering “how to start a cleaning company in Dubai” must know that cleaning services fall under General Services or Cleaning Services licenses. In addition to the standard business setup steps, you’ll need health/safety permits and approvals. Likewise, “how to start a construction company in Dubai” usually means registering on the mainland (construction activity is not allowed in most free zones) and obtaining specialized permits like the municipality’s building (G+1) permit and related environmental licenses. These extra approvals must be factored into your timeline and budget.
On the question of how to start a company in Dubai, UK founders must align their plans with local norms. Dozens of UK companies now take a two-pronged approach: maintaining a UK base for credibility and retaining high standards, while using a UAE mainland or free zone entity to tap Gulf markets.
Whatever sector you enter, the cost of setting up a business in Dubai can be significant. You should budget for office rent, visa fees, sponsor commissions and salaries. Government fees vary by emirate and license type; a basic mainland trade license might start at a few thousand dirhams, but comprehensive packages (including office and visas) often run higher. Don’t forget ongoing costs like license renewals and local audit requirements. As a rule of thumb, plan for a higher initial investment than you might expect and consult advisers for a detailed quote.
Despite the challenges, many UK firms find the move rewarding. Dubai actively courts foreign entrepreneurs, offering substantial incentives and a liberal trade environment. The city’s startup ecosystem is booming from tech incubators to fintech-friendly free zones, the networks available are unparalleled. UK founders note that business culture in Dubai can be highly collaborative and that government programs are very supportive of scaling companies.
Moreover, the legal framework can feel reassuring; for example, several Dubai free zones operate under English common law principles, giving UK businesses regulatory familiarity. And English is the lingua franca of commerce in Dubai, easing communication (though remember that Arabic is required on official documents).
Economic data also underscore the opportunities. The UAE’s economy is diverse and growing (over 70% non-oil), and Dubai is a gateway to the Middle East, Africa, and Asia. Corporate tax is low at 9% and there are extensive tax treaties in place. For many UK companies – especially those in finance, tourism, logistics or tech – setting up a company in Dubai mainland can accelerate growth into new markets.
However, experts stress proceeding with caution. Missteps (like choosing the wrong entity or undervaluing local customs) can be costly. That’s why having knowledgeable advisors like Lanop Business and tax advisors is crucial.
Lanop Business and Tax Advisors specialize in guiding UK companies through exactly these kinds of expansions. Our goal is to make the setup journey smooth and transparent. We act as your local point of contact, bridging the gap between UK business practices and Dubai’s regulatory environment. Our team offers end-to-end support for mainland company formation in Dubai and the UAE, including:
We help you choose the right legal structure (LLC, branch, etc.) and location (mainland vs free zone) based on your business goals. If you’re unsure about questions like “how to start a company in Dubai” or “start a company in Dubai free zone,” Lanop can explain the pros and cons and advise on the best path.
Our advisors handle the paperwork with the Department of Economy and other authorities. We prepare MOAs and service agent agreements, register trade names, secure initial approvals and manage all Dubai company registration requirements. We also arrange for your Ejari office lease and submit your license application, taking the guesswork out of the process.
Lanop Business and Tax Advisors arrange local sponsorship (if needed) and navigates visa processes for you and your staff. We ensure your HR policies; employment contracts and payroll comply with UAE labor laws. This covers visa issuance, renewal, and adherence to systems like the Wage Protection System (WPS), so you can focus on growing your business.
As tax advisors, we keep you compliant with UAE tax and corporate regulations. We register you with the Federal Tax Authority, handle VAT filings, advise on corporate tax planning, and prepare your financial statements for audit. For UK companies, we also offer cross-border tax consulting to optimize your global tax position under UAE-UK treaties.
After launch, Lanop remains your UAE partner. We can provide bookkeeping, accounting, and CFO services, manage renewals of licenses and visas, and keep you informed of any regulatory changes (for example, updates to foreign ownership rules or labour quotas).
Expanding to Dubai presents exciting growth opportunities for UK businesses, but also significant challenges. By understanding the UAE mainland vs free zone for businesses, the detailed company setup process UAE, and local business setup challenges outlined above, you can make informed decisions and avoid costly missteps. Partnering with experts can dramatically reduce risks and speed up your launch.
Lanop Business and Tax Advisors is ready to be your strategic partner in the UAE. From initial consultation through incorporation and beyond, we offer the local expertise you need to thrive. Whether you’re wondering how to start a cleaning company in Dubai or seeking guidance on Dubai mainland company formation, we can guide you every step of the way. Contact Lanop today to explore how we can help your UK business successfully enter the Dubai market.
The following are steps to startup main land company in Dubai.
The time it takes to establish a mainland company in Dubai will largely depend on several factors:
It will normally take between 2 and 4 weeks. But it’s best to speak with a local business setup advisor to come up with a more precise figure for your situation.
Yes, the recent legal reforms of the UAE often permit 100% foreign ownership in onshore companies in most industries. Until now, a local would have to own at least 51% of a firm. Now, British entrepreneurs are generally free to set up and have full ownership of their mainland businesses without a local partner. Still, there may be requirements for specific sectors that are regulated, so you will need to look at the regulations applicable to the business you plan to do.
Here are some of the tax benefits the UK businesses get to enjoy from operating in Dubai:
These tax advantages are a big draw for UK companies considering how to minimize their tax exposure in Dubai.
Dubai’s multi-sector economic backdrop which creates opportunities in different industries, such as:
UK companies have access to the following support systems when they’re setting up in Dubai:
Using these resources can help make the transition to, and establishment in, the Dubai market smoother and more successful.
Aurangzaib Chawla is an international tax and business advisor with offices in the UK, UAE, Belgium, KSA, and Pakistan. As Managing Partner at Lanop Business & Tax Advisors, he helps entrepreneurs and investors expand globally with proactive structuring, compliance, and long-term tax efficiency.
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At Lanop, I am providing my services as the Managing Partner and Tax Specialist. My expertise includes helping medium and small-scale businesses in their accountancy and legal requirements, business start-up support, strategic review, payroll system review and implementation, VAT and tax compliance to cloud accounting. I am also an expert in financial reporting, identifying and monitoring risks, strategic business development, client retention, market acquisition and deals closure by carefully planning my sales cycle.
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