How to Start an AI Company in Dubai - Flyingcolour

How to Start an AI Company in Dubai – A Guide for Indian Entrepreneurs

Dubai is fast becoming a global innovation hub. With world-class infrastructure, forward thinking leadership and tax friendly policies, it’s the perfect destination for AI startups. For Indian entrepreneurs looking to start an AI company in Dubai, the time couldn’t be better.

This guide covers everything from legal requirements and setup procedures to licensing, costs and business zones so you can start your AI business confidently and compliantly.

Why Dubai is the Best Place to Start an AI Company in 2025

1. Government Support for AI

UAE was the first country in the world to appoint a Minister of State for Artificial Intelligence in 2017. Initiatives like UAE Artificial Intelligence Strategy 2031 and Dubai’s Smart Government agenda shows strong national support.

2. Strategic Location for Global Expansion

Dubai offers unmatched access to markets in GCC, Africa, Asia and Europe. As a digital hub it’s perfect for AI service exports.

3. Tax Friendly Environment

• 0% personal income tax

• 9% corporate tax only on profits exceeding AED 375,000 (as per Federal Decree-Law No. 47 of 2022)

4. 100% Foreign Ownership

AI startups can have 100% ownership in several Free Zones and even in selected Mainland activities.

5. AI Ecosystem and Tech Zones

Dubai Internet City (DIC), DIFC Innovation Hub and Dubai Silicon Oasis are designed for high-tech ventures like AI, ML, blockchain and data science.

Types of AI Businesses You Can Start in Dubai

• AI Software Development

• Machine Learning Consulting

• AI Chatbot and NLP Services

• Computer Vision and Deep Learning Applications

• Predictive Analytics & Data Science

• AI in Healthcare, Fintech and Logistics

Business Jurisdictions for AI Company Setup

1. Free Zones

Recommended for tech startups, Free Zones like:

• Dubai Internet City (DIC)

• Dubai Silicon Oasis (DSO)

• Dubai Multi Commodities Centre (DMCC)

• IFZA Offers benefits like:

• 100% foreign ownership

• Zero customs duty

• Shared workspaces or Flexi-desks

2. Mainland Dubai

• Register with the Department of Economic Development (DED)* Wider business freedom to serve UAE-based clients without an agent

• Physical office mandatory

Step-by-Step Process to Start an AI Company in Dubai

Step 1: Choose Your Business Activity

• AI services, software publishing, IT consulting or machine learning development

Step 2: Pick Your Jurisdiction (Mainland vs. Free Zone)

• Free Zones = 100% ownership, low-cost, ideal for R&D

• Mainland = Best for client-facing operations inside UAE

Step 3: Reserve Your Trade Name

Submit at least 3 name options. Make sure the name is not offensive and doesn’t include abbreviations unless approved.

Step 4: Get Initial Approval

Submit the following:

• Passport copies of shareholders

• Application form

• Business plan

• NOC (if on current UAE visa)

Step 5: Finalize Office Space

• Free Zone: Flexi-desk, shared office or private unit

• Mainland: Office lease + Ejari

Step 6: Receive Trade License

Once approved, you’ll get:

• Trade license

• Company incorporation documents

• Establishment card (for visas)

Step 7: Open a Corporate Bank Account

Required documents:

• Trade license

• MOA (if LLC)

• Passport copies of shareholders

• Tenancy contract

Documents Required

• Passport copies (all shareholders)

• Passport-size photos

• Visa/Emirates ID (if applicable)

• Trade name approval certificate

• Lease agreement (Ejari or Free Zone space)

• MOA and company structure chart

• Business activity description

Government Decrees and Legal Framework

• Federal Decree-Law No. 47 of 2022: Corporate Tax

• Federal Law No. 2 of 2015: UAE Commercial Companies Law

• UAE Data Protection Law (2022): AI firms dealing with data must comply

• Cabinet Resolution No. 6 of 2020: Economic Substance Regulations (ESR)

• Dubai AI Roadmap 2031: Promotes AI innovation in government and private sectors

Benefits of Starting an AI Company in Dubai

• Strong government support for AI startups

• No restrictions on capital repatriation

• Access to global tech talent

• Startup-friendly licensing in Free Zones

• Potential eligibility for 10-year Golden Visa

Challenges to Be Aware Of Challenges to Be Aware Of

• Rapid changes in AI and data protection regulations

• High cost of recruiting skilled developers

• Competition from global tech companies already in Dubai

Why Indian Entrepreneurs Love Dubai’s AI Market

• India’s large talent pool in IT and AI

• CEPA established bilateral ties

• Cultural familiarity and large Indian expat community

• Opportunities to work with UAE and global clients

Why Choose Flyingcolour Business Setup?

We have helped over 10,000+ businesses, including many Indian tech entrepreneurs, set up their companies in Dubai.

We offer:

• AI/IT license consultation

• Mainland or Free Zone registration

• Visa & immigration support

• Office space leasing assistance

• Bank account and compliance setup

Whether you want to set up a deep tech lab or an AI marketing service, we make it easy.

FAQs: Starting an AI Company in Dubai

1. Can an Indian citizen own 100% of an AI company in Dubai?

Yes. Free Zones allow 100% foreign ownership. Mainland also allows it in many sectors.

2. Is AI business a regulated activity?

Only if you process sensitive user data or operate in healthcare/finance. Data Protection Law applies.

3. Can I get a Dubai Golden Visa?

Yes, if you invest significantly or employ high-skilled tech talent. AI startups are encouraged under the UAE innovation framework.

4. Can I run an AI business from India?

Yes, especially in Free Zones. But for local clients, it’s better to have a physical presence.