How to Start a Coworking Space in Dubai: Licensing, Costs and Setup Guide
A step-by-step guide to opening a coworking space or business centre in Dubai and the UAE: mainland vs free zone licensing, Ejari, VAT and corporate tax, location, pricing, flexi-desks and operations.
Dubai is one of the world's most active markets for flexible workspace. Constant new company formation, entrepreneurs relocating from around the world, remote workers and regional teams of international companies all create demand for coworking spaces, business centres and flexi-desks.
Opening a coworking space in Dubai follows the same principles as anywhere (see our general guide to starting a coworking space), but licensing, leases and tax have local specifics.
This guide is general information, not legal or tax advice. UAE regulations and authority requirements change, so confirm details with the relevant authority or a licensed business setup consultant.
Step 1: Understand demand in the UAE
Dubai's flexible workspace demand comes from:
- New company founders who need a licence-compliant office or flexi-desk
- Freelancers and remote workers, including those on remote work or freelance visas
- SMEs that want private offices without long leases
- International companies opening a regional presence
- Teams needing meeting rooms and event space in prime business districts
Popular areas include Business Bay, DIFC, Downtown, JLT, Dubai Marina, Dubai Internet City and Media City, Al Quoz and Deira, each with different audiences and rents.
Step 2: Mainland or free zone
| Mainland | Free zone | |
|---|---|---|
| Licensing authority | Department of Economy and Tourism (DET) | The free zone authority |
| Serving clients | Broad flexibility across the local market | Rules on trading outside the zone |
| Setup | More steps | Often more streamlined packages |
| Office space | Commercial premises with Ejari | Premises inside the free zone |
| Best for | Spaces targeting the wider city market | Spaces serving companies licensed in that zone |
Some operators partner with free zones to offer flexi-desk and office solutions to newly formed companies there. Others target the broader market from a mainland location.
Step 3: Get the right licence
- Choose a legal structure and trade name
- Select business activities that cover coworking or business centre operations (and any add-ons such as café or event services)
- Obtain initial approval, then the trade licence once premises are secured
- Check whether additional approvals are needed for your activities or building
Step 4: Secure premises
- Choose a building with good access, parking and metro connectivity
- Confirm the landlord permits coworking or business centre use
- Register mainland tenancy contracts through Ejari
- Plan fit-out approvals with the building management and relevant authorities
- Budget for civil defence and safety compliance
Step 5: Plan costs
One-time costs
- Licence and registration fees
- Security deposit and advance rent (often paid in cheques)
- Fit-out, furniture and air conditioning
- IT, access control, CCTV and meeting room technology
- Branding, website and launch marketing
Recurring costs
- Rent, service charges and utilities (such as DEWA)
- Staff salaries and visas
- Internet, cleaning, maintenance and supplies
- Licence renewals and insurance
- Software and marketing
Break-even example
Illustrative numbers only:
- Sellable seats: 60
- Average revenue per occupied seat: AED 1,200 per month
- Monthly costs: AED 48,000
Break-even = AED 48,000 ÷ AED 1,200 = 40 seats, or 67% occupancy.
Step 6: Tax and compliance
- VAT: standard rate of 5%. Registration is mandatory when taxable supplies exceed AED 375,000 a year, and voluntary registration is possible above AED 187,500.
- Corporate tax: 9% on taxable profits above AED 375,000, with registration requirements for businesses.
- Invoices: issue VAT-compliant tax invoices to members.
- Contracts: clear membership agreements covering term, deposits, use of address and termination.
Work with a UAE accountant from day one.
Step 7: Design products for the Dubai market
- Flexi-desks and licence-support office packages
- Hot desks and dedicated desks for freelancers and remote workers
- Private offices for SMEs and regional teams
- Virtual offices: address and mail handling
- Meeting rooms and event spaces by the hour or day
- Add-ons: parking, phone booths, company setup assistance through partners
Price by commitment length and use annual packages to secure cash flow. See our coworking pricing strategy guide.
Step 8: Run operations efficiently
With many members on different packages, you need accurate seat allocation, clash-free room bookings, VAT invoices, renewals and receivables tracking. AppZex Cowork handles seat maps, bookings, memberships, invoicing with tax, visitors, leads and occupancy reports across locations. Start a 14-day free trial.
Step 9: Marketing that works in Dubai
- Google Business Profile with Arabic and English details and photos
- A fast bilingual website with packages, virtual tours and WhatsApp enquiries. Our website development team builds these.
- Partnerships with business setup consultants, free zones, banks and accountants
- Listings on coworking marketplaces and commercial property portals
- Community events for founders and freelancers
- Instagram and LinkedIn content showing the space and members
Launch checklist
- Mainland or free zone decision made
- Trade licence with the right activities
- Premises approved and Ejari registered (mainland)
- Fit-out and safety approvals complete
- VAT and corporate tax obligations reviewed with an accountant
- Packages, pricing and membership agreements ready
- Management software configured
- Website, Google profile and partnerships live
Frequently asked questions
Do I need a special licence to run a coworking space in Dubai?
You need a trade licence whose permitted activities cover operating a coworking space or business centre, issued either by Dubai's Department of Economy and Tourism for mainland businesses or by a free zone authority. The exact activity names and approvals vary, so confirm with the licensing authority or a business setup consultant.
Mainland or free zone: which is better for a coworking space?
A mainland licence generally gives more flexibility to serve clients anywhere in the emirate, while free zones can offer simpler setup and specific incentives but have rules on where and with whom you can trade. Your target members and location should drive the decision.
What taxes apply to a coworking business in the UAE?
The UAE has a 5% standard VAT rate, with mandatory VAT registration above the AED 375,000 annual taxable supplies threshold, and a federal corporate tax of 9% on taxable profits above AED 375,000. Consult a UAE tax advisor for your situation.
What is a flexi-desk in Dubai?
A flexi-desk is a shared desk package often used by small companies, particularly in free zones, to meet office requirements for licensing at a lower cost than a private office. Rules on what counts as eligible office space depend on the authority.
Written by
Uday Madan, Founder of AppZex Solutions
Uday has spent five years building production software, from business web apps to multi-tenant SaaS platforms. He started AppZex to give small and mid-sized businesses the kind of software large companies take for granted, without enterprise price tags or year-long timelines.