One of the main concerns of new entrepreneurs is the cost of business setup in Dubai. The main costs involved change occasionally; hence, there is likely a different rate for getting business licenses and approvals. The main costs depend on the business activity type, jurisdictions, licenses, and other approvals. Therefore, it is necessary to understand the costs involved in starting a business in Dubai, as it will save you time and help avoid any extra expenses.
You are also advised to contact a corporate advisor for your business setup in Dubai. Consultants help you understand initial costs, governmental fees, and other expenses involved, which can save you from extra payments. Both mainland and free zones have different laws that affect the costs involved in company setup. Let us look at the process in detail.
Company Setup Cost in Dubai
In Dubai, there are three main areas where you can set up your business: the mainland, the free zone, and the offshore. The costs for a mainland or a Limited Liability Company (LLC) are below.
| Cost of Dubai Professional License | Cost of Dubai Commercial License |
| Initial approval cost – AED 120 | Initial approval – AED 120 |
| Name approval cost – AED 620 | Name approval – AED 620 |
| Tasheel Fee – AED 230 | Tasheel Fee – AED 230 |
| Attestation of MOA – AED 900 | Attestation of MOA – AED 1500 |
| License fee (Yearly fee) – AED 5600 Approx | License fee (Yearly fee) – AED 10,000 |
| Foreign name costs – AED 2000 | – |
*Costs may be different according to a change in government laws.
Services Involved in the Cost of an LLC Dubai Company Setup
Below are the services involved in the cost of LLC company formation in Dubai.
Getting Initial Approval
The company will get initial approval from the Department of Economic Development to start operating its business. The fee is paid once, and it allows you to start your business for the next six months and gives you time to prepare all required documents.
Getting Name Approval
Select a name for your company that you’ll use to run your business. The costs involved in name approval are paid once, but they can differ according to your selected name. The main charges in approving company names are reservation fees, trade name fees, foreign name fees, etc.
Leasing an Office
Leasing an office space to run their business is mandatory for mainland companies. It ensures the business’s legality, lets the authorities inspect and monitor business operations, and ensures the company follows the rules and regulations. The costs of leasing an office can be yearly or monthly, according to the lease contract.
Notarization of MOA
A company’s MOA is notarized between its shareholders and partners. The cost is paid once and can be different depending on the type of shareholder capital.
Preparing the Contract in Arabic and English
A contract for an LLC company is drafted in Arabic and English so all shareholders can understand it. Drafting and translation are also one-time costs.
Department of Economic Development Fee
The DED charges are paid once for the LLC company’s registration process, although you may need to pay additional fees depending on your type of business.
Business License Fee (Mainland)
A one-time fee is charged for business license registration. However, the cost can be different depending on your business activity. This license fee is also included in the DED fee, and you may need to submit a security deposit when applying for your trade license.
Commercial License Fee (Tejari)
The company pays the commercial license, also known as Tejari, for commercial business activities yearly.
Administrative Fee
A one-time administrative fee is paid to the department for doing the required paperwork.
Charges of Commercial Services
The yearly charges paid to the government for improving commercial services are included in the company registration cost in Dubai.
Dubai Chamber of Commerce Charges
A yearly fee is paid to the Dubai Chamber of Commerce, which is also part of the business setup cost in Dubai. The costs can be different for a general trading company, an industrial company, or a manufacturing company.
Some Additional Charges
There are other additional charges included in company registration costs, such as,
- One-time fee for the formation of a general trading company
- One-time fee of license contract
- Real estate dealer company fee paid to Ministry of Economics
- For rented offices, 5% is payable, while for a warehouse, 30% is paid to the government.
There can also be additional charges depending on the type of business you run in Dubai.
Dubai Free Zone Company Setup Cost
The process of setting up a free zone company is different from that of a mainland business setup. Each free zone has its own set of regulations and authority, and its costs are also different from each other. Free zones offer minimal operational costs for new entrepreneurs. The charges for office spaces, facilities, and services are paid annually to the authorities.
Services involved in Cost of Freezone Company Setup
The services included in Dubai Freezone company setup cost are as follows,
Company Registration Fee
You must pay a one-time fee at the beginning of your business registration in the Dubai free zone. The charges can be different for a branch office and an FZE.
License Fee
Companies registered under free zone authority need to pay yearly license registration fees. These charges are included in the company registration fee and are paid by trading, industrial, and services companies in the UAE.
Lease Charges
At the beginning of your business setup in Freezone, the charges for your office space are also paid, which are included in the registration fee. You’ll get full ownership of your business and liability in the company. These charges can be paid monthly or yearly, depending on the type of your lease contract.
Types of Renting Spaces for Freezone Company Setup
You can select from the different options given below for your office space,
Office / Warehouses
For your new business setup, you can either get an office or a warehouse in the free zone. Both have their own perks, but having an office gives you more advantages than a warehouse.
Smart Desk
Another convenient option for new entrepreneurs or small businesses is a smart desk for their free zone company setup. Smart desk services involve getting a small desk and running your business from there.
Office Unit
Office units are independent small spaces for entrepreneurs to set up their Dubai Freezone company. Their costs depend on the area or jurisdiction you have selected.
Share Capital
Freezone setup in Dubai requires the investment of the sole proprietor or shareholders of the firm. In most free zones, the share capital requirement is minimal, making the process easier. The entrepreneur should decide the amount of share capital at the early stage of business setup in Dubai. The amount can be a total investment in the business or divided among the shareholders.
Visa Fee of Free Zone
For a free zone company in Dubai, there are limited employment visa options according to the office area. An ID card, medical certificate, and residence permit are charged for a foreign employee. For a new employee living in the UAE, there are expenses for an ID card, medical certificate, residence permit, and visa issuance without the need to leave the country.
Requirement of Bank Guarantee
Another Dubai Freezone company setup cost involves a bank guarantee. The company is required to show a specific amount of bank guarantee for every worker it has hired.
Local Agent Fee
A free zone company is required to work with a registered agent for all official procedures. The charges are paid to the agent initially and may have to be paid during license renewal.
Other Important Expenses
According to the free you select, you may need to pay the following expenses,
- Charges of company name approval
- Document verification expenses
- Insurance fee
- Cost of opening a bank account
- Medical fitness certificates
- Emirates ID
- Clearance from the police department
Services Involved in Cost of Offshore Business Setup
The following services are included in the expenses of the offshore company setup,
Offshore Company Setup Fee
The registration fee of offshore companies is paid yearly and depends on the area you have selected and the business activities you choose for your business operations.
Share Capital Requirement
In some offshore areas, share capital is required for new business setups. Offshore companies are legal entities established to engage in international trade and are best for commercial operations.
Charges of Office Space
For offshore companies, having a physical presence in the UAE is essential. You may not need a running office, but you must have a registered address in the country and pay its charges annually.
Cost of Bank Account
Offshore companies are required to have a commercial bank in the UAE for their financial activities. You must pay this fee once.
Charges of Local Agent
Like any other business set up in UAE, offshore companies also need a local agent. A local registered agent is charged yearly for the services he provides.
Services of Nominee
The services of a nominee are utilized when the owner is absent to make decisions in its place without having actual authority in the company. The owner pays the charges of the nominee for their services.
Business Maintenance Fee
The charges of business maintenance are paid to the local jurisdiction of the offshore area. The charges are paid yearly to the authorities.
Advantages of setting up a Business in Dubai
Given below are the advantages of setting up a company in Dubai,
- Exemption from paying taxes
- Full company ownership and no requirement of local sponsor
- Full transfer of profits
- No requirement for statutory capital
- Reach to different sectors in the UAE
- Different choices of legal business activities
Wrap Up
In short, the cost of starting a business in Dubai depends on many elements. Therefore, we can not determine a fixed cost for a new company. Every jurisdiction has its own requirements, and the costs can also be affected by the business activities and the type of license. To simplify this process, you can work with business accountants.
Al-Riyady has years of experience in the UAE’s diverse market. We can help you start your business at a low cost and simplify the registration process. Contact our experts today to register your business with ease. We also provide accounting and auditing services, business feasibility studies, and tax consultancy.
