Types of Business Licenses in Dubai and How to Choose the Right One

Dubai’s reputation as a global business hub has consistently attracted entrepreneurs and corporations from across the globe. With its strategic location, investor-friendly policies, and thriving economy, establishing a business in Dubai offers unmatched advantages. However, before embarking on your entrepreneurial journey, understanding the types of business licences available in Dubai is crucial to ensure a seamless setup process.

In this blog, we will explore the various types of licences, the cost of incorporating a Dubai company, and how to select the one best suited for your venture.

Why is a Business Licence Important in Dubai?

A business licence is mandatory for operating legally in Dubai. It not only provides a regulatory framework but also determines the scope of your business activities—including what you are permitted to do, where you can operate, and under what legal entity structure.

While exact annual new-licence figures vary, government statistics show that Dubai issues tens of thousands of new business licences each year, reflecting the city’s vibrant business ecosystem. Ensuring you secure the correct licence aligns you with compliance obligations and helps you avoid penalties.

Types of Business Licences in Dubai

According to the UAE Ministry of Economy (MoE), there are six main licence categories: industrial, commercial, professional, tourism, agricultural, and crafts/occupational.

Official Reference – UAE Ministry of Economy:

Below are the most common ones you’ll see in Dubai, along with additional structure options.

1. Commercial Licence

This licence is designed for businesses engaged in trading activities — import/export, wholesale, retail, and general trading.

Examples: electronics trading, textile exports, e-commerce.

2. Professional Licence

Suitable for service-oriented businesses such as consultants, advisors, and specialists.

Examples: IT consulting, marketing agencies, legal services.

Due to UAE ownership reforms, most permitted mainland activities now allow 100% foreign ownership.

3. Industrial Licence

Required for businesses engaged in manufacturing or industrial operations.

Examples: food processing, furniture manufacturing, assembly units.

4. Tourism Licence

For businesses in hospitality, travel, and leisure.

Examples: travel agencies, tour operators, hotel management.

The UAE's travel & tourism sector contributed around AED 167 billion to the national economy in 2022 according to official statistics.

5. Crafts (Occupational) Licence

Covers skilled manual or artisanal work such as carpentry, tailoring, maintenance and repair services.

6. Agricultural Licence

For companies involved in crop growing, livestock care, fisheries, or agricultural services.

Other Common Options in Dubai Setup

Freelance Permits

Free zones offer freelance permits for individuals such as designers, developers, writers, and consultants. These are not part of the 6 MoE licence categories but are widely used.

Branch Office

A branch office is a legal form, not a licence type. It allows foreign companies to operate in Dubai under the same business scope.

Key Considerations When Choosing a Business Licence

1. Nature of Activities

Define your primary and secondary activities so they align accurately with the licence type.

2. Location: Mainland vs Free Zone

• Free Zones: Offer 100% foreign ownership, simplified procedures, and potential 0% corporate tax on qualifying income.

• Mainland: Direct access to the UAE market; most permitted activities now allow 100% foreign ownership.

3. Ownership Structure

The old 51/49 rule has been largely removed. Most commercial and professional activities now allow 100% foreign ownership unless on the restricted list.

4. Cost of Incorporating a Dubai Company

Costs depend on jurisdiction, activities, visa allocation, and office requirements.

5. Regulatory Compliance

Businesses must comply with the UAE’s corporate tax regime:

• 0% on taxable income up to AED 375,000

• 9% on taxable income above AED 375,000

• Free-zone companies may qualify for 0% on qualifying income

All businesses must handle tax registration and filing obligations.

Official Reference – UAE Corporate Tax (UAE Government Portal)

Benefits of Establishing a Business in Dubai

• Modern Corporate Tax System with potential 0% for qualified free-zone income

• No Personal Income Tax on employment income

• Global connectivity and logistics infrastructure

• Broad industry opportunities

• Streamlined incorporation and digital government services

How to Get Started (Mainland, Free Zone, or Branch)

1. Define your activities

2. Choose mainland or free zone

3. Reserve your company name

4. Gather and submit required documents

5. Complete corporate tax registration where applicable

6. Receive your licence and begin visa/banking procedures

For investors considering a free-zone setup, IFZA is one of the most popular choices: Dubai IFZA Company Formation

Why Choose Mirr Asia for Your Dubai Business Setup?

• Full guidance on licence selection and jurisdiction

• Updated compliance, including corporate tax rules

• Tailored packages for startups, SMEs, branches, and expansions

• End-to-end support from document preparation to licence issuance

Start your Dubai business journey with confidence. Mirr Asia ensures the entire process is smooth, compliant, and strategically optimized for your goals.

Conclusion

Dubai’s strategic location, economic strength, and business-friendly legislation make it one of the world’s leading jurisdictions for foreign investors. Understanding the official licence categories, ownership rules, compliance requirements, and cost considerations will help you make the right decision.

With the professional support of Mirr Asia, establishing your Dubai company becomes efficient, compliant, and stress-free.