October 4, 2026

Setting Up a Company in Dubai: Lessons from Our Advisory Practice

If you search for experiences with setting up a company in Dubai, you will find two extremes: reports in which everything is done in five days and tax-free, and reports in which everything went wrong. Neither is usually the reality. This overview describes what actually works well in practice, where things regularly get stuck, and how you can recognise an unreliable provider.

What works reliably

The licence itself – authorities and free zones work quickly and digitally; five to ten working days is realistic
100% ownership – no local partner, no hidden shareholdings
Visa process – medical test, Emirates ID and entry permit are largely predictable
Digital administration – renewals and filings are handled through portals, not at a counter

A realistic timeline

The question of how long it takes is usually answered with the licence processing time. That is the shortest part.

Weeks 1 to 2: choose the zone, define the activity, compile documents, submit the licence application
Weeks 2 to 3: licence and establishment card are issued, entry permit is applied for
Weeks 3 to 5: entry into the UAE, medical test, biometrics, Emirates ID application
Weeks 5 to 7: Emirates ID arrives, bank meeting is scheduled
Weeks 7 to 11: the bank's compliance review, followed by account approval

Anyone who expects five days is thinking of the licence. If you expect a company that is ready to operate, plan for two to three months – and during that time, do not plan for customer payments or salaries to run through the new company.

Where things get stuck in practice

Stage	Typical cause	What helps
Bank account opening	unclear business model, source of funds not documented	prepare contracts, website and bank statements in advance
Wrong licence activity	chosen by package price rather than by business	define the activity before choosing the zone
German tax liability	residence or place of management effectively remains in Germany	review by your German adviser before formation
Late CT registration	assumption that nothing needs to be done at 0%	put the three-month deadline from incorporation in your calendar
Second year	renewal more expensive than the entry price	obtain the renewal price in writing upfront

The three most common misconceptions

“You don't pay taxes in Dubai.” Since June 2023, corporate tax of 9% has applied to profits above AED 375,000. The 0% rate in a free zone is subject to conditions and must be evidenced.
“With the visa, I'm out of Germany.” What counts is residence and habitual abode, not the residence permit. A double taxation agreement that would resolve this question has not existed since the end of 2021.
“The formation is the effort.” The formation is the smallest part. Accounting, deadlines and renewals stay with you permanently.

What clients would do differently in hindsight

Three points come up again and again in conversations after formation.

Combine the trips better. Many travel twice because the medical test and the bank account opening did not fall into the same window. With some lead time, both can be done in one week.

Set up the accounting earlier. Anyone who books the first months without a system pays for the catch-up work before the first annual financial statements – regularly more than ongoing support would have cost.

Involve the German adviser earlier. Almost everyone who ran into tax trouble had that conversation only after the formation.

How to spot an unreliable provider

They promise tax freedom without asking about your residence
They quote no renewal price, only the entry price
They consider accounting optional
They choose the activity for you without knowing your business
They guarantee a bank account instead of offering support to get there
They work without a written scope of services and without a fixed contact person

When the structure does not fit

Not every formation turns out to be the right one in hindsight. The most common case: the company was set up, but the residence stayed in the home country – and the hoped-for savings do not materialise.

An existing company cannot be corrected retroactively
Liquidation costs fees and takes several weeks
Simply letting it lapse accumulates late penalties
Changing the zone is effectively a new formation

This is why we stress the order: first the question of residence, then the structure. The other way round gets expensive.

Our assessment after many formations

Dubai delivers on what it promises in terms of procedure: fast, digital, business-friendly. What it does not deliver is the promise of a carefree life – and that is sold by providers, not by the authorities.

The formations that go well share a common pattern: the German side was reviewed beforehand, the activity fits the business, and the ongoing obligations were planned from the start. So do the formations that go wrong: the decision was made on price, and the tax question came after the licence.