Business Setup Cost in Dubai, UAE
Dubai, UAE, is a well-known hub for business and commerce, attracting entrepreneurs and investors worldwide.
With its strategic location, favorable business policies, and excellent infrastructure, Dubai offers a conducive environment for starting and growing a business. However, setting up a company or business in Dubai comes with a cost, and it’s essential to understand the expenses involved before embarking on this journey.
If you want to know business setup cost in Dubai, keep reading as we provide insight into the various costs involved in starting your company in Dubai.
So let’s explore the various costs of starting your business in Dubai so you can step towards success with the right data!
What is the Average Cost of Starting a Business in Dubai?
Various factors, such as the nature of your operations, license category, and location, influence the cost of establishing a business in Dubai.
A Service license can be obtained for as little as AED 20,000, making a ballpark estimate of AED 20,000 to AED 30,000 a reasonable assumption.
It’s worth noting that additional requirements, such as foreign trading names or approvals from regulatory bodies, can increase the overall cost.
What Are the Various Costs involved in Forming a Company in the UAE?
The various costs involved in forming a company in the UAE include the following:
Company registration fee: This fee is paid to the Department of Economic Development (DED) for registering the company.
- Legal fees: This includes expenses for lawyers who can assist with the company formation process and provide legal advice.
- Sponsorship fee: Most business activities in the UAE require a local sponsor, who can be an individual or a company. A sponsorship fee is typically paid to the sponsor for their services.
- Business license fee: A business license must be obtained for each business activity and renewed annually.
- Office space rental: This includes the cost of renting office space in the UAE, which can vary depending on location and size.
- Visa fees: Business visas are required for those wishing to start and run a business in the UAE. This fee includes the cost of obtaining the visa and any medical tests that may be required.
- Bank account opening fee: The bank charges this fee for opening a corporate bank account in the UAE.
- Furniture and equipment: This includes the cost of purchasing or leasing office furniture and equipment.
It’s important to note that these costs can vary depending on the type of company being formed, the industry, and the location in the UAE. Therefore, seeking professional advice from local lawyers, consultants, or business setup companies is advisable to estimate the costs.
Costs for Company Formation in Dubai (Mainland VS Free zone)
The cost of setting up a business in Dubai mainland and free zone can differ due to the factors involved, including the legal fee and taxes. So let’s explore these costs individually!
1. Free Zone Company Formation Costs
Various variables can affect the cost of setting up a business in UAE free zones. One of the direct costs is associated with obtaining the license, which can cost you around AED 2,500 to AED 50,000, depending on the free zone you have finalized for your company.
The type of business can also impact the cost and the annual charges. Additional expenses include government fees and taxes. Here it is important to note that the benefits of starting your business can justify the cost as you can market your product or services to a diverse culture with plenty of business opportunities.
2. Mainland Company Formation Costs
The cost of forming a mainland company in the UAE can vary depending on several factors, including the type of company, industry, and the number of visas required. However, on average, the cost of forming a mainland company in Dubai can range from AED 15,000 to AED 50,000 or more.
The main costs involved in mainland company formation in Dubai include the following:
- Company registration fees
- Legal fees.
- Sponsorship fees.
- Business license fees
- Office space rentals
- Visa fees
- Bank account opening fees
3. Offshore Company Formation Costs
Offshore company formation costs in Dubai, UAE, can vary depending on the type of offshore company, the legal structure, and other factors. Here’s a breakdown of the estimated costs of forming an offshore company in Dubai:
- Incorporation fees: The cost of incorporating an offshore company can range from AED 10,000 to AED 20,000.
- Registered agent fees: Offshore companies must have a registered agent in Dubai who can handle legal and administrative matters on their behalf. The registered agent fees can range from AED 5,000 to AED 15,000 annually.
- Virtual office fees: Offshore companies must also have a registered office address in Dubai, which can be a virtual office. The cost of a virtual office can range from AED 5,000 to AED 10,000 per year.
- Government fees: The Dubai government charges fees for offshore company registration, which can vary depending on the type of offshore company and the legal structure. The fees can range from AED 5,000 to AED 20,000.
- Bank account opening fees: Opening a bank account for an offshore company can cost between AED 5,000 to AED 10,000.
The total cost of forming an offshore company in Dubai can range from AED 30,000 to AED 70,000, depending on the above factors. Therefore, seeking professional guidance before starting an offshore company in Dubai is essential to ensure compliance with all legal requirements and make the process smooth and cost-effective.
FAQs About Business Setup Costs in Dubai
How difficult is it to start a business in Dubai as a foreigner?
Starting a business in Dubai as a foreigner can be challenging but possible. The following factors can make it easier or more complex:
- Local sponsor
- Type of the company
- Business visa
- Cost of running a business
The process can be simplified by seeking help from local lawyers, consultants, or business setup companies.
Is Dubai tax-free for business?
Dubai has a tax-free business environment with no corporate or personal income tax. However, there are specific fees and taxes, such as value-added tax (VAT) and import duties, that businesses operating in Dubai are subject to.
How much does it cost to set up an LLC in Dubai?
The cost to set up an LLC in Dubai can range from AED 15,000 to AED 50,000, depending on various factors such as business activity, location, and legal requirements.
How much does a small business license cost in Dubai?
The cost of a small business license in Dubai, also known as a commercial license, can start from AED 10,000 and vary depending on the business activity and location.
What is the minimum cost to start a business in Dubai?
The minimum cost to start a business in Dubai can be as low as AED 10,000 for a commercial license, but the total cost can vary based on several factors, such as the legal structure, location, and business activity.
How to keep costs down while starting a business in Dubai?
One effective approach to reducing costs when starting a business in the UAE is to seek the assistance of experienced business setups consultants such as Airzone, who can guide you through the process and offer a range of packages tailored to your specific requirements and budget.
If you were wondering about business setup costs in Dubai, we hope that we helped you understand the various costs involved in the process.
Dubai’s thriving economy and tax-free business environment make it an attractive location for entrepreneurs and investors. However, starting a business in the city can come with several costs, including securing a local sponsor, obtaining a business visa, and registering and setting up the company.
Nevertheless, with proper planning and support, the city’s strategic location, diverse industries, and high standard of living make it a highly rewarding and profitable destination for setting up a business.