What Is the Cost of Setting Up a Company in Dubai? Business Setup Toolkit

What Is the Cost of Setting Up a Company in Dubai? Business Setup Toolkit

Dubai has been the flag-bearer of the United Arab Emirates's global progress for quite some time. The city provides expanding economic opportunities, diverse business start-ups, and investor-friendly policies to entrepreneurs from all over the world. Before you start forming your company, you must decide which free zone you want to operate in. The location you choose will determine the various legal structures of your business and how much money you will need to set up a business in Dubai.

It is gratifying to start a new business in Dubai. Nonetheless, it isn't easy to quickly become acquainted with a foreign environment and comprehend the international market. Dubai Mainland and Dubai Freezone have different rules and regulations that affect the cost of setting up a business in Dubai. Let's take a better look at how much it will cost to set up and run your business in Dubai by breaking down the expected expenses before and after your company gets established.

Fees Incurred with Startup Business in Dubai 

Even though many costs will arise depending on your business location in Dubai, four costs cannot be avoided and will undoubtedly be a part of your cost of setting up a business in Dubai. These are given below one by one.

 1. Registration Fee

The business registration fee is a one-time payment to the free zone authority during the initial stages of registering your company. The company's legal structure will determine the exact price. The cost of writing a company in a Dubai-free zone is not incredibly variable; it typically ranges between AED 9,000 and AED 10,000.

2. License Fee

The most critical step in operating in one of Dubai's free zones is selecting a business license. The three most common business licenses available are for trading, services, and manufacturing. Unlike company registration fees, license fees are recurring costs that can range from AED 10,000 to AED 50,000 per year.

3. Office Fee

Renting an office space in Dubai is required to obtain a business license. Each free zone in Dubai provides a variety of desk spaces to meet your company's needs, such as service, innovative, and flexible desks, which typically cost between AED 15,000 and AED 20,000.

4. Share Capital

The minimum share capital amount varies significantly by free zone and can range from AED 1,000 to AED 1,000,000, depending on the business activities and licenses. In general, the average share capital requirement for Dubai free zones is AED 50,000.

Dubai Mainland Vs Dubai Free Zones

When compared to other free zones in Dubai, the cost of establishing a company in mainland Dubai is relatively high; however, the value-added services and business support provided to member companies have found the mainland as the world's leading free zone for the past six years.

Over the years, the government has facilitated the business owners and tried to create a streamlined company formation process that makes it quick and straightforward for businesses to establish in Dubai. It only takes 2-4 weeks for your company to be fully operational, with half of the work being done remotely.

Dubai's business opportunities are limitless, with over 900 different business activities spanning 20 sectors. With a record-breaking 2025 new companies registered in 2020, the mainland has established itself as one of the world's most interconnected business districts and is poised to shape the future of trade in 2021 -22.

The cost of setting up depends on the type of business you want to establish; however, the following is a broad guideline to keep in view while planning for the business setup. Let's look into the cost breakup for both the zones that you would require:

Free Zone Company Setup Costs

Incorporating a company in a free zone has advantages, particularly in terms of cost. However, one must keep in mind that there are numerous free zones, and the cost of incorporation will vary between them. Aside from the location, the cost of the business will be determined by a variety of factors such as the business structure, nature of the business, infrastructure requirements, the number of visas required by the company, access to suppliers and raw materials, and so on.

Some of the most sought-after. Let's look into all the cost that is associated with it.

1. Office Setup and Rent Costs

The rent for the building required by the business is determined by the Free Zone in which the company is located. The location and nature of the business will also play a role in determining the total number of visas required. A service charge calculated as a percentage of your lease may also be included. These are all yearly fees for establishing a company in Dubai.

2. Free Zone License on a Yearly Basis

Before starting a business in any of the Free Zones, every company must obtain a license. The license fee will be charged to trading companies, service companies, and industrial companies that establish themselves in the Free Zone. 

 3. Business Registration Cost in Free Zone

This fee is incurred when the required Free Zone Authority registers the business and recognizes that it is located in the Free Zone. This cost is determined by the Free Zone in which the company is established, such as Hamriyah Free Zone, DMCC, etc., as well as the nature of the company launched, such as Free Zone Establishment (FZE) or Branch Company.

4. Renewal of Visa

The Free Zone is required to obtain Visas for their employees based on the office space chosen by the company's management. The Visa fees may vary depending on whether the employees are from outside the UAE or are UAE residents, but this cost will be included. When a visa expires, the cost of the visa also returns.

5. Financial Guarantee

Every Free Zone company must provide a bank guarantee for all of its employees. This is proof that the company is hiring and will not be involved in a scam. For example, this could be 45 days' salary plus a one-way ticket to their home country.

Mainland Company Setup Costs

The costs of establishing a business on the mainland, like the costs of establishing a business in a free zone, are determined by factors such as the nature of the company, the number of visa permits required, and the location of the business.

It should be noted that the business setup costs in Dubai listed here are only estimates and may vary depending on a variety of factors such as the type of company, business type, location, and business requirements. There are also some additional costs that add up over time. A list of the majority of the expenses that a business will incur while registering a company in Dubai Mainland is provided below.

1. Preliminary Approval of Business License

An essential thing in order to start a business in Mainland Dubai, the management must obtain a business license. This license is available from the Department of Economic Development (DED). This license will allow the organization to conduct all business operations immediately. The cost of a Dubai Mainland license may vary depending on the type of license required by the business.

2. Trade Name Reservation

Obtaining approval for the business name is a critical requirement before beginning operations. Several fees must be paid for the business name to be approved, including the following.

1. Reservation Cost.
2. Cost of Commercial Name.
3. Cost of Foreign Company Name.

3. Office Rent

Most businesses in Dubai require dedicated offices to ensure that they are legal, as this allows authorities to conduct inspections, supervise operations, and ensure that immigration laws are followed. The cost of office rent is determined by the size of the office, the amenities provided, and the company office location.

4. Attestation of Memorandum of Association (MoA)

The Memorandum of Association (MOA) for a business is created through discussion among the company's partners or shareholders. The cost of attestation can vary depending on the capital invested by the shareholders or the share allocated to the shareholder according to the parties' agreement.

5. Drafting Contract and Court Agreement Attestation

Since this contract must be drafted in Arabic and English, the business may be charged for contract translation. All partners or their attorneys must sign the Court Agreement Attestation at the court.

6. Ministry of Economy Fees

This fee is paid to the concerned authority by the company's management annually for conducting commercial activities in Dubai Mainland.

a) Trade License Fee:

When establishing a business in Dubai, you will be required to pay a Trade License Fee, the cost of which will vary depending on the nature of your business. You may also be asked to show proof of a security deposit for Trade License Fees.

b) Chamber of Commerce Fee:

Having to pay the Chamber of Commerce The fee would then entitle the business to a certificate issued by the Chamber of Commerce, which will allow for the recognition of goods and aid in estimating customs tariffs. The cost of a general trading company may differ from the cost of a Manufacturing Company or an Industrial Company.

Launch Low-cost Business Setup in Dubai With Danburite Corporate

Danburite Corporate specializes in low-cost company formation in the United Arab Emirate's mainland and free zones. Our expert Business Consultants will guide you through the company formation process and ensure you obtain the General Trading License in Dubai for the lowest possible cost. Get settled in Dubai at a low cost and stop worrying about the lengthy financial registration process. Contact us online, and we will remotely register the company for you.