If you’re planning to start a business in Dubai, one of the first and most important steps is to open a physical office. Having a dedicated workspace not only adds legitimacy to your operations but is also a legal requirement in many cases, especially for mainland companies.
Benefits of a Physical Office
Establishing a physical office provides more than just a workspace; it strengthens your business presence and operations. It gives your business a real presence and boosts your credibility with customers, partners, and government authorities.
1. Credibility and Brand Trust
Having a physical office gives your business a more professional presence and builds trust with clients right away. Clients trust companies that operate from professional premises rather than virtual or home-based setups. It also gives you a chance to display your brand signage and build visibility.
2. Wider Market Reach
Setting up a physical office, particularly in the mainland, allows your business to operate and reach clients throughout Dubai and the entire UAE. You’re not limited to Free Zone restrictions, giving you access to local and international markets.
3. Larger Visa Quotas
One of the key advantages you opening a physical office is access to more employee visas. The size of your office directly affects how many visas you can apply for, allowing you to grow your team as needed.
4. Better Networking and Talent Access
Being in a commercial area connects you to like-minded professionals and potential clients. You’ll also find it easier to hire qualified staff when you operate from a known business district in Dubai.
Key Documents and Initial Approvals
Before you can officially open a physical office for your company in Dubai, there are essential documents and approvals you need to secure. These are required not only by the Department of Economic Development (DED) but also by your selected free zone authority or landlord. Proper documentation ensures your business complies with local laws and is eligible to receive a business license and office registration.
1. Personal Identity Papers
Every business setup in Dubai begins with verifying the identities of those involved in the company. This includes:
- Passport Copy: You must provide a clear, valid copy of your passport with a minimum of 6 months remaining before expiry. This applies to all shareholders, directors, and partners involved.
- UAE Entry Stamp or Visa: If you are already in the UAE, you will need to show proof of your latest entry into the country or a copy of your residence visa if you are a resident. This helps validate your presence and legal status in the country.
2. Corporate Documents and Memorandum of Association (MoA)
If your company involves multiple shareholders or is part of a parent company, you’ll need the following corporate documentation:
- Proposed MoA (Memorandum of Association): This legal document outlines your business structure, activities, and the roles and responsibilities of each shareholder. All shareholders are required to sign the document, and in certain cases, it may also need to be notarized.
- Shareholder Resolution: If the company is being set up as a branch or subsidiary of an existing company (local or international), a shareholder resolution is required. This document confirms the parent company’s approval to open a branch and identifies who will manage it in Dubai.
3. Office Lease Agreement and Ejari Registration
Once your legal documents are prepared, the next step is to secure a business address. This process involves:
- Tenancy Contract: Also known as the lease agreement, this is signed between your company and the landlord for the office space. The lease must clearly outline the office’s size, address, and rental conditions.
- Ejari Certificate: After signing the lease, the contract must be registered with Dubai’s Ejari system, an online platform operated by the Dubai Land Department. This step makes the lease legally recognized and is mandatory for obtaining your trade license and applying for employee visas.
Step-by-Step Formation Process
Setting up a physical office in Dubai requires going through a series of organized and official steps. Each phase ensures that your business is legally registered, properly licensed, and ready to operate. Here’s how the full company formation process works:
1. Reserve Your Trade Name
The first step is to choose a name that represents your business identity. This name must follow Dubai’s trade name guidelines, which means:
- It should not include offensive or religious terms
- It must reflect the business activity
- It cannot duplicate another registered name
Once selected, the name is submitted to the Department of Economic Development (DED) for approval and reservation.
2. Obtain Initial Approval
With your trade name approved, the next step is to apply for initial approval from DED or the relevant free zone authority. This approval acts as a green light, confirming that the UAE government has no objection to your proposed business activity and legal structure.
Initial approval does not grant you a license, but it is required to move forward with document processing and lease agreements.
3. Sign the MoA and Finalize the Lease
The Memorandum of Association (MoA) defines the structure of your business, including:
- The names and roles of shareholders
- The scope of your business activities
- Capital contributions and profit-sharing
All shareholders must sign the MoA. In some cases, it must be notarized through a Dubai notary public or certified by a UAE embassy if signed abroad.
At this stage, you also need to secure your office space. After choosing the location, you’ll sign a tenancy contract with the landlord. This contract will then be registered with the Ejari system, officially recognizing your lease with the Dubai Land Department.
4. Apply for Your Trade License
With your MoA and tenancy documents ready, you can now apply for your business license. This step plays a crucial role in successfully forming your company. Your license will:
- Authorize your business to operate legally in Dubai
- Identify your type of business activity (commercial, professional, or industrial)
- Gives you the authority to open a company bank account and onboard employees.
Submit all supporting documents to the relevant authority, DED for mainland, or your chosen free zone office.
5. Register with Immigration and the Ministry of Labour
Once your trade license is issued, your company must be registered with:
- GDRFA (General Directorate of Residency and Foreigners Affairs)
- MOHRE (Ministry of Human Resources and Emiratisation)
These registrations allow you to:
- Apply for investor and employee visas
- Issue labour contracts
- Legally sponsor staff and dependents
The visa quota depends on your office size and license type, especially in mainland setups.
6. Office Setup: Fit-Out and Utilities
With the legal and licensing work complete, it’s time to make your physical office operational. This includes:
- Installing furniture and workstations
- Setting up telephone lines and high-speed internet
- Activating electricity and water through DEWA (Dubai Electricity and Water Authority)
- Ensuring compliance with building safety and business signage regulations
Making the office ready ensures smooth daily operations and gives your business a professional face to the public.
Trade License Options and Costs
Choosing the right trade license is vital when you open a physical office in Dubai. Your business activity determines the kind of license required.
1. Commercial License
For businesses involved in buying and selling goods.Well-suited for businesses involved in trading, retail operations, or import and export activities.
2. Professional License
Ideal for service-oriented companies such as consultancies, IT providers, and creative agencies, this setup often permits full foreign ownership.
3. Industrial License
Required for manufacturing or industrial businesses that use machinery or production lines.
4. Mainland versus Free Zone Fees
Mainland setups usually have higher visa quotas but come with government fees like market fees (around 2.5%-5%). Free Zones offer packages with lower startup costs but limit your business area.
5. Post-Setup Compliance Essentials
Once you open a physical office, your responsibilities don’t end. Following UAE regulations is essential for maintaining long-term business success.
6. Annual Renewals and Audits
Renew your trade license every year and submit audit reports if required. These are often necessary for bank compliance and visa processing.
7. ESR and UBO Filing
Economic Substance Regulation (ESR) and Ultimate Beneficial Owner (UBO) disclosures are mandatory for transparency and anti-money laundering efforts.
8. Visa Quota Management
Track your visa quotas and employee capacity based on your office size. Apply for additional quota if your business expands.
Alternatives to Physical Office Spaces
1. Virtual Office:
With a virtual office, your business can operate using a recognized address while avoiding the cost and upkeep of a traditional workspace. It’s especially useful for startups, freelancers, remote teams, and international companies that want to establish a presence in Dubai without incurring high overhead costs.
A virtual office is ideal for:
- Remote teams managing operations online
- Consultants or freelancers who don’t need a daily office
- Offshore or international companies looking for a UAE presence
- Startups are trying to reduce setup costs during the early stages
2. Flexi-Desk
A flexi-desk, also known as a hot desk, allows you to work in a shared office environment for a limited number of hours per week. It’s commonly offered in free zones and provides:
- A desk space you can use as needed
- Basic meeting room access
- Eligibility for limited visa allocation
- A cost-effective way to meet office requirements
3. Co-Working Spaces
Co-working offices are shared spaces where professionals from different companies work under one roof. They offer:
- Desks, private offices, and meeting rooms
- Networking opportunities with other entrepreneurs
- Utilities, high-speed internet, and admin support
- A modern work environment without the cost of a private lease
4. Business Incubators
For startups or new ventures, business incubators can provide office space along with mentorship, networking, and startup support. These are usually run by government-backed programs or large free zones.
5. Remote or Home-Based Setup
Depending on the license type and jurisdiction, some small businesses can operate from home, especially if they don’t need physical client interactions. While this may not always qualify for visa allocation or official licensing in the Dubai mainland, it’s suitable for early-stage testing or freelancing.
Why Choose LUKADAH to Open Your Office?
At LUKADAH, we help you open a physical office in Dubai the right way, saving time, avoiding red tape, and ensuring legal compliance. Our experts guide you through trade name reservation, license selection, Ejari registration, visa applications, and more.
You don’t need to stress about delays or documentation, just focus on growing your business. Whether you’re launching a small startup or a global brand, we’ll tailor the setup to your goals.
📞 Contact Us
Phone: +971 4 394 0800
Email: info@lukadah.com
FAQ
1. Do I need a physical office to get a trade license in Dubai?
Yes, especially for mainland companies. A physical office is usually required to issue a trade license and secure visa quotas.
2. What is the difference between a flexi-desk and a virtual office?
A flexi-desk gives you limited desk access, while a virtual office offers only an address and admin services without workspace usage.
3. Can I upgrade from a virtual office to a physical one later?
Yes, many businesses start with a virtual office or flexi-desk and later move to a full office as they scale operations.