Identifying Prime Locations to Set Up Your Business in Dubai

Dubai continues to strengthen its position as a top global hub for business. With its visionary leadership, strong economic policies, and open-door approach to global investors, the city keeps drawing attention. But have you ever wondered why so many entrepreneurs are choosing Dubai to launch their businesses? Or what makes one business district more appealing than another?

A closer look reveals some striking numbers. Over 30,000 new companies registered in the city between January and June 2023, according to Invest in Dubai. Free zones played a major role in this growth. DMCC alone welcomed 2,692 new businesses last year, now housing over 24,000 members. The center contributes 11% of all foreign direct investment (FDI) into Dubai and 7% of its GDP. DIFC saw 1,451 new registrations in 2023, taking its total to 5,523 companies. JAFZA reported Dhs713 billion in non-oil trade in 2024 and is now home to over 11,000 businesses. Meanwhile, DAFZ supports more than 3,000 businesses with a tax-free environment, full foreign ownership, and repatriation of profits.

What does all this tell us? Dubai’s ability to consistently attract companies reflects its solid diversification strategy. Today, oil contributes less than 1% to the UAE's GDP. This means the focus has clearly shifted to innovation, services, and future-ready sectors—good news for new businesses.

Mainland or Free Zone: Which Route Should You Take?

One of the first decisions an entrepreneur needs to make is where to register: on the mainland or in a free zone. It’s not just about geography. This decision affects ownership, taxes, licensing, and how easily you can trade.

Mainland companies:

Can trade across the UAE and internationally
Allow 100% foreign ownership for most activities
Require a physical office (costs vary from AED 30,000 to AED 150,000 annually)

Free zone companies:

Offer 100% foreign ownership and 0% corporate tax (if compliant)
Provide flexible office options starting from AED 10,000 per year
Usually complete setup in 5 days to 2 weeks
Historically limited to international trade, though recent rules allow mainland branches through Dual Licenses

Table: Mainland vs. Free Zone Setup

Aspect	Mainland	Free Zone
Ownership	Up to 100% (some sectors require Emirati partner)	100%
Market Access	Full UAE and global	Mainly global; mainland via Dual License
Corporate Tax	9% (from 2024)	0% (if compliant)
Office Space	Mandatory physical office	Shared/flexible options
Setup Time	Longer (weeks to months)	Faster (5 days to 2 weeks)
Customs Duties	Applied	Exempt within zone
Local Sponsor	Optional (AED 10,000-25,000)	Not required

What Kind of Business License Do You Need?

The type of license you apply for depends on your business activity. Dubai's DET and the Ministry of Economy recognize six primary license categories covering over 2,000 activities:

Commercial: For trading, import/export, retail
Professional: For services like consultancy, law, education
Industrial: For manufacturing and production
E-Trader: For home-based or online sellers
Dual License: For operating across the mainland and free zones

Each free zone also offers its own licensing structure. For instance:

DMCC offers Trading, General Trading, SPV, Crypto, and Gaming licenses
DIFC categorizes licenses by financial activities (from Category 1 to 5), and also issues AI, FinTech, and Innovation licenses
DAFZ offers Talent Pass for freelancers in media, tech, and education

Looking at license distribution helps us understand where Dubai is heading. On the mainland, the majority of licenses issued in Q1 and H1 2022 were professional (55%+), marking a shift toward a service-based economy. Compare this to November 2018, when commercial licenses made up 62.3%.

Dubai Mainland License Trends

License Type	Q1 2022	H1 2022
Professional	14,057 (57%)	25,109 (55%)
Commercial	10,605 (43%)	20,544 (45%)

Free zones are seeing similar transitions, but with a stronger focus on innovation. For example:

DMCC saw 129 new companies in its Crypto Centre and 48 in Gaming
DIFC added 316 FinTech firms in 2023, now totaling 902
DFSA issued 154 new licenses in 2024, with a 75% spike in wealth management firms

Top Locations for Different Business Types

If you’re unsure where to start your business journey, here’s how Dubai’s business districts break down by type and specialization:

Mainland Business Hubs

Bur Dubai & Deira: These remain the most popular for new businesses. In H1 2022, Bur Dubai alone saw 31,604 licenses.
Top areas within: Al Fahidi, Al Marrar, Burj Khalifa, Port Saeed, Al Barsha 1
Best for: General trading, retail, consultancy, education, legal services

Specialized Free Zones

DIFC: Focused on finance, FinTech, AI, and innovation. Offers subsidized Innovation License. Office rents range from AED 150–300/sqft/year.
DMCC: Known for commodities but growing in crypto, AI, and e-commerce. Based in JLT with office rents between AED 50–200/sqft/year.
JAFZA: Ideal for manufacturing, logistics, and large-scale trading. Located next to Jebel Ali Port. Supports over 11,000 businesses.
DAFZ: Best for aviation, tech, fashion, logistics. Located at Dubai International Airport. Offers freelancing-friendly Talent Pass.

Factors That Should Guide Your Location Choice

There’s more to choosing your business location than just licensing or rent. Have you considered how infrastructure, workforce, or connectivity might impact your operations?

Infrastructure & Connectivity: Dubai offers world-class roads, ports, and airports. The UAE also ranks top globally for its digital infrastructure, making it ideal for tech-driven businesses.
Talent Pool: With 88.5% of the population being expats, Dubai provides a diverse, skilled workforce. Visa reforms like the Golden Visa help retain top talent.
Costs:
- Mainland license: AED 20,000–50,000
- Free zone license: AED 10,000–50,000 (often includes office)
- Office rent: Varies significantly (see examples below)

Sample Office Costs (Annual)

Area	Average Rent
Downtown Dubai	AED 1.5M
Business Bay	AED 372,000
Deira	AED 45,787
DIFC	AED 150–300/sqft
JLT	AED 50–200/sqft

Other Costs:
- Company setup: AED 8,000–15,000
- Visa fees: AED 3,000–7,000
- Permits: AED 5,000–10,000

Dubai’s "Invest in Dubai" platform simplifies the setup process for both mainland and free zone businesses. It’s also worth noting that free zones often allow quicker setup and offer bundled packages that reduce the hassle.

Building Your Business in the Right Place

Dubai’s business-friendly environment, strong infrastructure, and regulatory flexibility make it an ideal place for new ventures. But your location decision can influence everything from operations to growth. Should you go mainland for direct market access? Or does a free zone align better with your industry and cost structure?

Use this framework to guide your choice:

Target Market: Local consumers vs. global trade?
Industry Needs: Are you in FinTech, manufacturing, or consultancy?
Cost Structure: Can you afford Downtown rent, or would JLT be smarter?
Operational Model: Would a hybrid setup (Dual License) give you more freedom?

Whichever route you choose, Dubai offers the ecosystem, talent, and tools to help your business thrive. But success in this city isn’t just about choosing the right location—it’s about knowing exactly what kind of legacy you want to build.