Cost Of Starting A Business In Dubai

Dubai has emerged as a favored location for entrepreneurs and investors globally. Renowned as the commercial nucleus of the Middle East, Dubai is acclaimed for its superior global connectivity and business-friendly legal framework, making it an attractive destination for new ventures. The demographic benefits further enhance its profitability. However, grasping the financial requirements for establishing a company in Dubai is crucial, as insufficient knowledge might lead to extra costs.

Mainland business setup / LLC company formation costs

Expense CategoryDubai Commercial License CostDubai Professional License Cost
Initial Approval (one-time gov’t fees)AED 120AED 120
Name Approval (one-time gov’t fees)AED 620AED 620
Tasheel Fee (one-time gov’t fees)AED 230AED 230
Notarization of MOA (one-time gov’t fees)AED 1,500AED 900
License Fee (yearly gov’t fees)AED 10,000 (Approx.)AED 5,600 (Approx.)
Market Fees (yearly gov’t fees)AED 500 (Exempted)Foreign Name Charges (yearly gov’t fees) – AED 2,000 (Avoidable with Arabic name)

Experts advise that the fees for company incorporation in Dubai are subject to change. Therefore, engaging with a knowledgeable and cost-effective business consultancy in Dubai is recommended. These professionals assist in understanding early-stage fees, keep clients informed about changes in legal and government fees, and offer advice on minimizing unnecessary expenses.

The investment for starting a business in Dubai varies based on the business type, chosen jurisdiction, required approvals, and certifications. To simplify, Shuraa Business Setup has compiled a recent list of standard business setup costs in Dubai, categorized into Mainland, Free Zone, and Offshore.

Costs Involved in Mainland LLC Business Formation in Dubai, UAE:

  1. Initial Approval from DED: The Department of Economic Development (DED) grants initial permits for commencing business activities. A nominal charge is levied for a period of six months, allowing time for further documentation. This is a one-off cost in the business startup process.
  2. Trade Name Approval: The trade name represents your business identity. Costs may vary depending on the chosen name and include reservation fees, commercial name fees, foreign company name fees, among others. This is also a one-time expense.
  3. Office Space Rental for LLC: For a mainland business in Dubai, renting an office space is compulsory, facilitating legitimate operation checks and adherence to immigration laws. This cost can be annual or for a specified term.
  4. Attestation of MoA: The attestation of a Limited Liability Company’s Memorandum of Association, involving partners or shareholders, varies based on share capital but is a one-time fee.
  5. Drafting LLC Contract in Arabic and English: The LLC agreement, drafted in both Arabic and English, requires mutual agreement of partners. Translation costs may be additional. This is a one-time expense.
  6. DED Charges: The Ministry of Economy charges a one-time registration fee for LLCs, with additional annual fees varying per business.
  7. Mainland Trade License Fee: Acquiring a trade license involves a one-time fee, which can vary based on business activity. A security deposit may also be required.
  8. Commercial License Fee / Tejari: This annual fee is mandatory for commercial activities.
  9. Dubai Chamber of Commerce Fee: An annual fee for general trading companies, with varying rates for industrial or manufacturing businesses.
  10. Commercial Services Improvement Fee: An annual fee for governmental department improvements.
  11. Administrative Services Fee: A one-time charge for paperwork processing.

Additional Costs:

  • One-time fee for general trading company setup.
  • One-time contracting license fee.
  • Real estate broker company fee charged by the Economic Department.
  • Government levy on rented premises (5% for office or shop, 20% for warehouse).
  • Additional fees depending on business nature.

Free zone company formation cost

The UAE’s free zones operate under unique regulations and procedures, leading to varying costs for company setup. Commonalities include local sponsorship, rental, and visa fees, but differences arise in areas like smart desks, office units, warehouses, license fees, registration fees, share capital requirements, and bank guarantees, which depend on the chosen free zone.

Notable Free Zone Licensing Costs in Dubai (as per Private Wolf experts):

  • International Free Zone Authority (IFZA): AED 17,900 (including one investor visa) or AED 11,900 (without visa). Prices vary by company type (e.g., FZE or branch office).

Components of Dubai Free Zone Business Setup Costs:

  1. Free Zone Company Registration Fee: A one-time fee paid to the free zone authority when registering a business, varying based on the company type.
  2. Free Zone License Fee: An annual charge for all companies within a free zone, applicable to trading, service, and industrial companies. It’s included in the company registration and handled through a single-window procedure by the respective free zone authority.
  3. Rental Cost: Office rent is a primary expense in free zone business setup, offering 100% ownership of assets and liabilities. Rental costs, which can be monthly or yearly, depend on the free zone and type of space rented. The rental size also influences the number of visas available and permissible business activities.

Rental Options in Free Zone Setups:

  • Smart Desk: A cost-effective option, typically a single desk, ideal for freelancers and small businesses.
  • Office Units: Small, self-contained office spaces; costs vary by area.
  • Permanent Offices/Warehouses: Larger, full-fledged office spaces or warehouses, offering more benefits but at a higher cost.
  1. Share Capital Requirements: Free zone companies must have a specified share capital, either divided among shareholders or as a total company investment. Most UAE free zones mandate a minimum share capital for company formation.
  2. Free Zone Visa Fee: Limited employment visas are available based on office size, with annual renewal fees. Additional costs for new employees include residency stamps, medical fitness certificates, and ID cards, varying if the employee is inside or outside the UAE.
  3. Bank Guarantee for Free Zones: Companies must provide a bank guarantee for each employee.
  4. Registered Agent Fee: A local agent is required for governmental procedures in free zones, with fees applicable at initial stages and during license renewals.

Other Key Expenses in Free Zone Company Formation:

  • Name approval charges
  • Notarization fees
  • Insurance costs
  • Premium bank account setup in Dubai
  • Typing and shipping fees
  • Medical checks
  • Police clearance
  • Emirates ID card

For specific free zone choices, these costs may vary.

Offshore company formation costs

Offshore company formation fee – AED 15,500
Standard share capital – No deposit required
Offshore registered office fee – N/A
Nominee services –  Included in formation fee
Maintenance / renewal fee (not levied in the first year) – AED 12,000

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