Start Your Construction Company in a Dubai Free Zone: A Guide to Success

In 2022, residential construction was on top in the UAE’s construction market. Looking ahead to 2023, if you’re considering starting your construction company, you can capitalize on the continued recovery in tourism and investments in hotels, offices, retail, and data centers, as commercial development is anticipated to increase. The industrial sector will also benefit from advanced manufacturing and export activity.

Infrastructure will grow due to the government’s focus on a sustainable transport system. Energy and utilities will expand with health, education, and museum investments. Institutional may dip in 2023 but bounce back with investments in healthcare and education. Residential will also grow with rising demand and housing projects.

The building industry in Dubai has become one of the highest-grossing business sectors in the United Arab Emirates due to investors seizing these fantastic growth prospects. You can participate in this expanding industry if you’re interested. With the assistance of the business setup professionals at BizDaddy, it’s effortless.

Understanding the Free Zone Advantage

Dubai’s free zones offer a business-friendly environment with 100% foreign ownership and repatriation of profits. As a construction company, choosing a free zone allows you to tap into the growing construction sector while enjoying various incentives and privileges.

A Step-by-Step Guide

  • Research and Choose the Right Free Zone: Identify the most suitable free zone for your construction business based on facilities, proximity to major ports, and specific industry focus.
  • Company Registration: Complete the free zone company registration process, which involves submitting required documents and obtaining necessary approvals.
  • Business License: Acquire the construction license specifying the nature of your construction activities.
  • Leverage Business Setup Consultants: Engage with expert business setup consultants to streamline the process, saving time and effort.

Dubai Construction Company Licenses

In Dubai, construction companies can access different business licenses suited to specific construction activities. The below-given licenses cater to different types of construction businesses operating in Dubai.

  • Building Contracting License: For constructing residential, commercial, and industrial buildings.
  • General Contracting License: Enables handling of various construction tasks, including infrastructure projects and civil engineering.
  • Civil Engineering License: Specifically for working on civil engineering projects like roads, bridges, and highways.
  • Steel Construction License: This license is for companies that excel in steel construction and fabrication.
  • Electrical Contracting License: Companies with this license can handle electrical works, installations, and maintenance for construction projects.
  • Plumbing Contracting License: This license allows businesses to handle plumbing and sanitary works for various construction projects.
  • Interior Fit-Out License: Companies holding this license specialize in interior fit-out and decoration services for commercial and residential spaces.
  • Landscaping Contracting License: This license enables businesses to provide landscaping and horticultural services for building projects.
  • Demolition Contracting License: Companies with this license can undertake demolition and dismantling works for structures and buildings.
  • Carpentry and Flooring Contracting License: This license allows businesses to provide specialized carpentry and flooring services in construction projects.

Dubai’s construction companies must hold the appropriate license for their specific area of expertise and operation. Each permit may have different needs and criteria to meet, so it is best to obtain professional help from company setup specialists to ensure a smooth and compliant licensing application process.

Requirements for Construction Company Setup in Free Zones

  • Share Capital: Depending on the chosen free zone, meet the minimum share capital requirements.
  • Local Partner: Free zones typically allow 100% foreign ownership, eliminating the need for a local partner.
  • Office Space: Secure an office space within the free zone’s premises to establish your company’s physical presence.

Benefits of Starting a Construction Company in a Free Zone

  • Tax Advantages: Enjoy tax exemptions on corporate income, personal income, and customs duties.
  • Access to Global Markets: Dubai’s strategic location provides easy access to international markets, opening doors to global opportunities.
  • State-of-the-Art Infrastructure: Free zones offer modern infrastructure and world-class facilities to support your construction operation

Costs Involved

person signing loan agreement for purchase of apartment | Construction Company

Setting up a construction company in free zones may involve initial costs for company registration, license issuance, and office space rental. However, free zones often offer competitive pricing and attractive packages, making it a cost-effective choice for aspiring construction entrepreneurs.

Below are estimated costs for setting up a construction company in a Dubai free zone:

ActivityEstimated Cost (AED)
Company Registration8,000 – 15,000
Construction License20,000 – 25,000
Office Space Lease30,000 – 50,000
Warehouse Space Lease50,000 – 100,000
Employment Visas5,000 – 7,000 per visa

Note: The costs mentioned above may vary depending on the free zone, business activities, and the size of the company.

Visas and Labor Permits

As a construction company owner, you can apply for employment visas for yourself and your employees to work legally within the free zone. Obtaining passports and labor permits is streamlined in free zones, making it convenient for your business operations.

Approvals Required for Construction Companies in UAE

To launch your construction company, securing external government permissions is imperative after obtaining the proper license.

  • Dubai Water and Electricity Authority- Dubai Water and Electricity authorities are necessary to obtain all of the company’s essential amenities.
  • Department of Drainage and Irrigation – Authorization for the handling of liquid waste and other disposable services
  • Department and the Dubai Civil Defense Authority– The Building Department and the Dubai Civil Defense Authority decide whether or not the construction enterprise complies with the applicable building laws.


Starting a construction company in a Dubai-free zone is a strategic move that can propel your business to new heights. The free zone advantage, combined with Dubai’s booming construction sector, offers limitless potential for growth and success. With Bizdaddy’s expertise as your trusted business setup consultant, you can navigate the complexities and embark on a rewarding journey in the construction industry. Leap, and let your construction dream soar in Dubai’s free zones!