How to start a software company in Dubai: a founder's guide

The short answer: how to start a software company in Dubai

Every software company in Dubai needs a license from one authority: the Department of Economy and Tourism (DET) for the mainland, or the authority of the free zone you join. That authority decides the application. Your job is to give it a file that matches what the business will really do.

For a software or IT business, four choices shape everything else: the activity, the jurisdiction, the premises and the people you plan to hire. Get those right and the later steps, such as tax registration, protecting your code and handling customer data, follow a predictable order.

It is tempting to start with the license price. It is better to start with your customers: who pays you, where they are, and whether you sell development services, software licenses or access to a platform.

Step 1: choose the activity that matches your product

Your activity is what the license allows you to do, so choose it from what you actually deliver. Dubai's mainland list, searchable on the Invest in Dubai platform, and zones that use the UAE's unified activity codes, such as Dubai Silicon Oasis, use names like these:

Wording varies between zones. Dubai Internet City licenses tech companies under categories such as Software, IT Services and Internet and Multimedia, set out in a Dubai Development Authority (DDA) decision on license categories. Some zones also treat e-commerce as a category of its own.

Mixing these up is the most common activity mistake. IFZA's FAQ says IT consulting firms are not entitled to market or produce software, so a consultancy activity will not cover selling your own product. Search the official lists, or start with our activity finder, before you commit.

• Computer Systems & Communication Equipment Software Design if you design and build software, apps or SaaS products.
• Information Technology Consultants or Computer Systems Consultancies if you advise clients rather than ship a product.
• Information Technology Network Services if you design or run networks for clients.
• Web-Design or Social Media Applications Development & Management for web and social app work.
• Computer Systems & Communication Equipment Software Trading if you resell software licenses.
• Portal if you run an online platform rather than build software for clients.

Mainland or free zone: what changes for a software business

The biggest difference is where you can operate. Dubai Internet City's FAQ says its license is valid only for operating within the free zone, and that an FZ-LLC can apply to DDA for a dual license to work elsewhere in the UAE. A mainland license comes from DET, which often suits a business whose clients are mainly UAE companies or government bodies.

Tax treatment differs too. The Ministry of Finance (MoF) says a free zone person that meets the conditions to be a Qualifying Free Zone Person can have a 0% corporate tax rate on its qualifying income. u.ae adds that free zone businesses keep their incentives provided they do not conduct business in the UAE mainland.

On the mainland, u.ae lists the legal forms as general partnership, limited partnership, limited liability company (LLC), public joint stock company and private joint stock company, and says the form must match the activity. A memorandum of association (MOA) is needed for limited partnerships, LLCs and joint stock companies, and in Dubai your office lease must be registered with Ejari.

Dubai Internet City, Dubai Silicon Oasis, DMCC and IFZA compared

Four Dubai options come up most often for tech founders. Each is run differently, so compare the facts each one publishes rather than the brand names.

Dubai Internet City (DIC) is a member of TECOM Group and is overseen by DDA. Its FAQ offers a Free Zone Limited Liability Company (FZ-LLC) or a branch, says registration usually takes 7 working days, and routes visa and licensing services through axs, TECOM's digital service platform.

Dubai Silicon Oasis (DSO) operates under the Dubai Integrated Economic Zones Authority (DIEZ). It issues service, trade and industrial licenses to a Free Zone Company (FZCO) or a branch, and says existing FZEs are treated as FZCOs under its 2023 Regulations. Its Dubai Technology Entrepreneurship Campus (Dtec) runs coworking space for start-ups.

DMCC runs a tech ecosystem with communities for gaming, AI, crypto and blockchain, and e-commerce. It forms individual, subsidiary and branch companies and says setup typically takes around 10 working days, depending on documents and approvals. Our DMCC business setup page covers the process.

IFZA is headquartered in Dubai Silicon Oasis, issues professional and commercial licenses and works through a network of professional partners. Its FAQ says there is no mandatory office requirement for up to four visa allocations. See our IFZA business setup page for details.

Flexi desk or office: premises and visas for your team

In a free zone, your premises usually decide how many residence visas you can sponsor, so plan your space around your hiring plan. Each zone publishes its own rule:

The standard work visa is valid for two years and can be renewed, according to u.ae. Free zone companies process visas through the zone's own portal, while the Ministry of Human Resources and Emiratisation (MOHRE) issues work permits for private-sector employers on the mainland.

If you are a solo developer, DIC's GoFreelance permit covers categories such as Web, Mobile, Software Development and Architecture Freelancer. It is issued only in your own name and does not allow you to hire or sponsor staff.

• Dubai Silicon Oasis: a flexi desk allows up to two residency visas and a fixed desk up to three; private offices carry a visa allowance based on the space.
• DMCC: every company needs a registered address in DMCC, from flexi-desks to private offices, and the visa count depends on office size and license type.
• Dubai Internet City: one sponsored employee per 60 sq ft of leased space, with a minimum lease term of one year.
• IFZA: no mandatory office for up to four visa allocations.
• Mainland: a physical address that meets municipal requirements, with the lease registered through Ejari.

Protecting your code, product name and brand

Your code is protected by copyright in the UAE without registration. Federal Decree-Law No. 38 of 2021 on Copyright and Neighboring Rights lists smart applications, software and databases among protected works, and says that not registering a work does not prejudice its protection.

Registration still helps if ownership is ever questioned, because the law makes the Ministry's registers a reference for work details and ownership. The Ministry of Economy and Tourism (MoET) runs this as its Intellectual Works Rights Registration service. At the time of writing, it lists AED 50 per author or AED 200 per company, with an average of 3 working days.

Your product name and logo need a trademark instead. MoET's Trademark Registration service checks that the mark is not identical or similar to an existing one, then publishes accepted marks in the Trademarks Bulletin for a 30-day objection period. Under Federal Decree-Law No. 36 of 2021 on Trademarks, protection lasts 10 years from the filing date and can be renewed. We prepare and file trademark registration applications.

Make sure your employment and contractor agreements say who owns the code your team writes, and keep them with your company records.

Data protection rules for apps and SaaS products

If your software handles personal data, Federal Decree-Law No. 45 of 2021 Concerning the Protection of Personal Data applies. It came into force on 2 January 2022 and covers controllers and processors in the UAE, and those outside it that process data of people in the country.

Consent is the default basis for processing, with listed exceptions such as performing a contract or meeting a legal obligation. Users can ask for information about their data and have it corrected, erased, restricted or moved. You must keep processing secure, keep records and notify the UAE Data Office when you become aware of a breach that affects the data's security.

Some data sits outside the law, including health and banking data covered by their own legislation, and companies in free zones that have their own data protection rules. The law also provides for executive regulations, so confirm the current position before you launch.

Corporate tax and VAT basics for software companies

Corporate tax is 0% on taxable income up to AED 375,000 and 9% above that, according to u.ae, for financial years starting on or after 1 June 2023. MoF says every taxable person must register, including free zone persons.

The registration deadline is short. The Federal Tax Authority (FTA) requires a company incorporated on or after 1 March 2024 to apply within three months of incorporation, and MoF set a penalty of AED 10,000 for late registration. Our corporate tax registration service prepares the application for you.

VAT is separate and charged at 5%. Registration becomes mandatory when taxable supplies and imports exceed AED 375,000 over the previous 12 months, or are expected to within the next 30 days. Voluntary registration is open from AED 187,500, measured over the same periods.

Step-by-step launch plan for your software company

This is the order we suggest, from first decision to first invoice:

• Define what you sell: custom development, software licenses, consultancy or a platform.
• Match it to the activity names on DET's list or your chosen zone's list.
• Choose the mainland or a free zone, based on where your clients are and how many people you will hire.
• Pick the legal form and premises, checking the visa allocation each option gives you.
• Reserve the trade name and file the application with passports and shareholder documents.
• Sign the MOA or articles of association and collect the license.
• Apply for the establishment card and visas for you and your first hires.
• Register for corporate tax within three months, and for VAT once you cross the threshold.
• File copyright and trademark applications, and publish a privacy notice before you collect user data.

Why software company setups stall, and how Global Sky PRO helps

Most delays come from a mismatch between the paperwork and the business. Watch for these:

Global Sky PRO prepares and submits your license, visa, tax and trademark applications, and follows up with each authority until it decides. We set out our service fee in writing before we start, and government fees are paid at cost. Explore our free zone company formation service, or message us to talk through your plan.

• A consultancy activity chosen for a business that sells its own software.
• A flexi desk chosen before checking how many visas it allows.
• Shareholder names that differ between passports, the application and the MOA.
• Corporate tax registration left until after the three-month window.
• A product name launched before checking it against existing trademarks.