How to start a business in the UAE: 8 steps from licence to first invoice

Quick answers

What is this guide?

A plain-language walk-through of starting a company in the UAE in 8 steps: choosing your activity and mainland or free zone, the trade licence, office and visas, the bank account, corporate tax, VAT, your first tax invoice and bookkeeping, with links to the official sources.

Mainland or free zone in one line?

If your clients are mostly inside the UAE, a mainland licence is usually simpler. If they are abroad or you sell online, a free zone often fits. Check where you may work and how your income will be taxed before you choose.

What does a new company have to do for tax?

Register for corporate tax on EmaraTax within 3 months of incorporation, even if you expect to pay nothing. Register for VAT once taxable sales pass AED 375,000 in 12 months (or are expected to in the next 30 days).

1.Choose your activity and jurisdiction

Your activity decides your licence type and which authority issues it. The most common types (u.ae: steps to start a business on the mainland):

• Commercial: buying and selling goods, trading, e-commerce.
• Professional: services based on skills or qualifications: consulting, design, marketing, IT, freelancing.
• Industrial: manufacturing and processing.
• There are others too, such as tourism, agricultural and crafts licences.

Then choose your jurisdiction: the mainland (licensed by the emirate's economic department) or one of the free zones (licensed by the free zone authority). The main differences:

About the free zone 0% rate: it applies only to a Qualifying Free Zone Person, and only on qualifying income. The conditions include real substance in the zone, audited financial statements and staying within the limits on non-qualifying income (FTA Corporate Tax guide: Free Zone Persons). Income from mainland clients is generally taxed at 9% unless it comes from a specific list of qualifying activities, such as manufacturing or logistics (Cabinet Decision No. 100 of 2023). For VAT, most free zones are treated like the mainland; see VAT and free zone companies.

Simple rule: clients inside the UAE → mainland. Clients abroad or online → free zone.

2.Get your trade licence

The order is much the same everywhere, whether you apply to the economic department or a free zone authority:

1. Trade name approval. Reserve the company name. It must follow your licensing authority's naming rules.
2. Initial approval. Confirms that the authorities have no objection to you doing this activity. It is not yet a licence, so you can't trade on it.
3. Memorandum of association (MoA). The company's founding document, signed by the shareholders. It is needed for an LLC and other legal forms with shareholders; a sole establishment usually doesn't need one.
4. Licence issued. Once the office address and the remaining documents are in place.

A trade licence is usually issued for one year, so renew it before it expires (some free zones offer multi-year licences). On the mainland, renewal typically needs a valid registered lease for your office (in Dubai, registered with Ejari), so keep your lease and licence dates in step.

3.Office and visas

Your office and your visas are linked. The number of residence visas the company can sponsor (its visa quota) depends mainly on the size of your office on the mainland, or on your package in a free zone. A flexi-desk usually comes with a small quota.

The usual order (u.ae: recruiting on the mainland):

1. Establishment card (also called an immigration card). It registers the company with immigration and is needed before the company can sponsor any visa.
2. Investor or partner visa for you as owner: an entry permit, then a change of status if you are already in the UAE.
3. Medical fitness test at an approved centre.
4. Emirates ID: biometrics, then the card. You will need it for the bank account and most government services.

4.Open a business bank account

Banks ask for proof of who owns and runs the company and what it will do. Have these ready:

• Trade licence and MoA (or the free zone equivalent)
• Passports, residence visas and Emirates IDs of the shareholders and signatories
• Your office lease or flexi-desk agreement
• A short description of the business: what you sell, expected turnover, main clients and suppliers, and which countries money will come from
• Contracts or invoices with clients, if you already have them

Digital banks usually let you apply online and open faster, with fewer branch services. Traditional banks offer more, such as cash deposits and trade finance, but onboarding tends to take longer. Either way, expect compliance questions, and answer them in full.

Keep company and personal money separate. Pay business costs from the business account and pay yourself from it deliberately. Your corporate tax and VAT figures come from these records.

5.Register for corporate tax

Every company incorporated in the UAE must register for corporate tax on EmaraTax within 3 months of incorporation (FTA: Corporate Tax registration), even if it expects no profit. Registering late costs AED 10,000. The FTA currently waives that penalty if you file your first return within 7 months of the end of your first tax period, but don't rely on it: register on time.

• Rates: 0% on taxable income up to AED 375,000, 9% on the part above it (Cabinet Decision No. 116 of 2022).
• Return: file and pay within 9 months after the end of your tax period (usually your financial year).
• Small Business Relief: if your revenue is AED 3 million or less, you can elect to be treated as having no taxable income, as long as revenue stayed within that limit in every earlier tax period too. It now runs to tax periods ending by 31 December 2029 (Ministerial Decision No. 131 of 2026). You still have to register and file a return to claim it, and a Qualifying Free Zone Person can't claim it (FTA: Small Business Relief).

Working as a freelancer on a personal licence rather than through a company? Different rules apply; see corporate tax for freelancers.

6.Check whether you must register for VAT

VAT registration is separate from corporate tax and depends on your sales (FTA: registration for VAT):

• Mandatory: when your taxable sales and imports exceed AED 375,000 over the last 12 months, or you expect them to in the next 30 days. Apply within 30 days. Late registration costs AED 10,000 (Cabinet Decision No. 40 of 2017, as amended by Cabinet Decision No. 129 of 2025).
• Voluntary: allowed once your taxable sales or your taxable expenses exceed AED 187,500. Worth considering if you have large setup costs with VAT on them; see should I register voluntarily?

Once you are registered:

• Charge 5% VAT on your taxable sales and show your TRN on your tax invoices.
• File a VAT return for each period, usually every quarter, by the 28th day of the month after it ends (FTA: filing VAT returns and making payments). See how to file a VAT return.
• Reclaim the VAT you paid on business costs (input VAT). You need your supplier's tax invoice to do it, so keep every one.

Not sure where you stand? Read do I need to register for VAT? or try the VAT registration checker.

7.Issue your first invoice

Once you are VAT registered, a sale needs a tax invoice with these fields (VAT Executive Regulation, Article 59):

• The words "Tax Invoice", clearly displayed
• Your name, address and TRN (the registrant making the supply)
• The customer's name, address and TRN, where the customer is VAT registered
• A sequential or unique invoice number that shows the invoice's place in the sequence
• The date of issue
• The date of supply, if it differs from the date of issue
• A description of the goods or services
• For each line: unit price, quantity or volume, VAT rate and amount payable in AED
• The amount of any discount offered
• The gross amount payable in AED
• The VAT charged in AED, with the exchange rate used if the invoice is in another currency
• If the customer must account for the VAT (reverse charge), a statement saying so and the relevant article of the VAT Decree-Law

A shorter simplified tax invoice is allowed when the buyer is not VAT registered, or when the supply is AED 10,000 or less. See tax invoice vs simplified tax invoice and the tax invoice checklist. Not registered yet? You can still invoice, without VAT and without calling it a tax invoice: invoicing without VAT registration.

E-invoicing is coming. Businesses with revenue under AED 50 million must appoint an accredited service provider (ASP) by 31 March 2027, and invoices to businesses and government must be e-invoices from 1 July 2027. A business set up after then must onboard before its first invoice. Details in the e-invoicing hub.

8.Keep your books from day one

Bookkeeping is easiest when you do it as you go, not at year end.

• Record each sale and expense when it happens, and match it to your bank account.
• Keep every supplier invoice and receipt. Without a tax invoice you can't reclaim the VAT on it.
• How long: VAT records for at least 5 years; corporate tax records for 7 years after the end of the tax period (Tax Procedures Executive Regulation (Cabinet Decision No. 74 of 2023)). See how long to keep invoices.
• Audited accounts: required if your revenue is over AED 50 million, and always for a Qualifying Free Zone Person (Ministerial Decision No. 84 of 2025).

Your checklist

1. 1. Choose your activity and jurisdiction

   • Pick your activity: commercial, professional or industrial licence
   • Clients inside the UAE → mainland; clients abroad or online → free zone
   • Free zone 0% tax is only for qualifying income, with conditions

2. 2. Get your trade licence

   • Trade name approval, then initial approval
   • Sign the memorandum of association (MoA) if your legal form needs one
   • Licence issued; usually renewed every year (mainland: with a valid lease)

3. 3. Office and visas

   • Office or flexi-desk: it sets how many visas you can get
   • Establishment card for the company
   • Investor visa, medical test, Emirates ID

4. 4. Open a business bank account

   • Licence, MoA, passports, visas and Emirates IDs ready
   • Compare digital and traditional banks
   • Keep company and personal money separate

5. 5. Register for corporate tax

   • Register on EmaraTax within 3 months of incorporation
   • 0% up to AED 375,000 of taxable income, 9% above
   • File the return within 9 months of your year end, even with Small Business Relief

6. 6. Check whether you must register for VAT

   • Mandatory above AED 375,000; apply within 30 days
   • Voluntary from AED 187,500 of sales or expenses
   • Once registered: charge 5%, file by the 28th, keep supplier tax invoices

7. 7. Issue your first invoice

   • Use every mandatory tax invoice field
   • Simplified tax invoice only if the buyer isn't VAT registered, or for AED 10,000 or less
   • E-invoicing: appoint an ASP by 31 March 2027

8. 8. Keep your books from day one

   • Record sales and expenses as they happen; keep every supplier invoice
   • Keep VAT records 5 years and corporate tax records 7 years
   • Audited accounts if revenue is over AED 50 million, and always for a Qualifying Free Zone Person

Frequently asked questions