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Dubai Business Formation Information

Once the preliminary details of your future business are ironed out and your funding and initial investment capital is in order, you can begin the formal process of obtaining a trade licence (Company Formation in Dubai) through the Department of Economic Development. Regardless of what business structure you’ve decided on, if you’re an expatriate you are likely need to appoint a local service agent, also known as a sponsor. 

Since non-GCC nationals are not permitted to be majority share holders outside of free zones in the UAE, a system of shared ownership has been developed in which UAE nationals formally own 51% of the company and the foreign proprietor owns the remaining 49%; details of profit and loss distribution are then agreed upon in a separate contract. Local sponsors can be individuals or locally-owned businesses. For the most part, a local sponsor will not have any responsibility towards the business but is obliged to assist with all government related procedures such as obtaining permits, trade licences, visas and labour cards. His/her signature will be required on most official forms. 

Depending on the legal structure of the business, the Department of Economic Development has certain capital requirements for obtaining a trade licence. 

Also keep in mind that certain businesses require separate approvals from varying government ministries before the trade application can be completed. When applying for a trade name, be sure to enquire about any external approvals that will be needed for the proposed business activity. Do note that 'Virtual offices' are not allowed by DED which has advised potential investors that any commercial enterprise in Dubai must have a physical address and an actual office. 

It is important to do as much preliminary research as possible before applying for your trade licence. This means attending trade shows and exhibitions, networking through Dubai’s various business councils and even meeting with a consultancy firm that specialises in the business set up process.

If you have further queries, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website or, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to


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