Low cost business setup in Dubai

A Guide To Initiating Low-Cost Business Setup in Dubai

by Zaara 10, Nov 2023

Dubai, the famous business location, has been continually growing in terms of its strategic global location, economy, and incredibly attractive tax regime. It has long been a lucrative option for ambitious entrepreneurs from across the globe. Dubai offers plenty of foreign investors to tap into imports and exports of commodities in the current market trends, along with taking advantage of the growing tourist traffic in the city.

The big city and its bright lights can also be daunting. You need to know various facts, get acquainted with different business regulations, and avoid the problems encountered while launching a profitable and low-cost business in Dubai. Setting up a business in Dubai is relatively cheaper compared to many global cities, thanks to the lack of corporate and personal income tax.

The low cost of business setup is more prevalent even in a free zone. However, registering a company in Dubai is so easy that it can be completed by following a few simple steps, no matter which setup you choose.

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How to Start a Business in Dubai with Limited or Less Cash

The element that perhaps has the most significant bearing on the cost of setting up a business in Dubai is whether to select the location for your company. While both can be attained on a budget, the all-in-one nature of free zone setups can make it one of the most beneficial ways to register a company in Dubai.

Start by pursuing the cheapest free zone that fits your needs if budget is your primary focus. Aside from price, there are many leads for setting up a business in a free zone. The UAE’s zero percent tax rate is an additional benefit. You can have total custom tax exemption, repatriate 100 percent of your capital and profit, and no currency restrictions.

However, you should establish a mainland business to trade directly with the local UAE market or take on government contracts. This can still be done economically, depending on the size and nature of your business. You can get support from trustworthy business setup consultants to decide on the setup that best suits your budget and your requirements.

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Setting up a Business in Dubai

The activity for setting up a business in Dubai follows the same simple steps, regardless of your budget.

  1.  Your business activity or activities need to be established first. The Dubai Department of Economic Development (DED) has permitted more than 2,000 businesses, covering all sectors and sub-sectors. However, there might be a great choice in the activities that you can execute; it is vitally essential that you list them correctly on your license application. If you undertake unlicensed business activities, it can lead to penalties.
  2. You will need to choose a business name in the next step. While this may seem like an evident point, it’s worth mentioning due to the UAE’s strict set of naming conventions that may not be familiar to anyone outside of the region. You must keep in mind that the company’s name cannot include any offensive language or any references to Allah or Islam. You must use your full name if you wish to include your name in your company name rather than just your surname or initials. You must ensure that your chosen name is available to be registered as the final step.
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Mainland or Free Zone for Low-Cost Setup in Dubai

One of the most critical aspects of initiating the procedure for company formation in Dubai involves strategic decisions for choosing the right jurisdiction. We have a separate blog on understanding the difference between mainland free zone business setups.

The mainland business allows investors to trade directly with the UAE market. With the new regulation on full foreign ownership, there are many mainland activities through which you can incorporate a company without a local sponsor. But for other business activities, you will need to have a local sponsor who will own 51% of the shares in the business.

The free zone business offers investors 100% business ownership, and the procedure is quicker and cost-efficient. Businesses also need not provide any corporate tax. There are more than 20 free zones in Dubai dedicated to various business activities. Hence, you can decide your free zone based on your business operations.

A final decision on the jurisdiction should be made after considering the pros & cons of business setup in Dubai mainland as well as free zones.

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Your Licence Application

  1. You can proceed with your application once you’ve found the cheapest free zone that matches your requirements or needs. This stage shall include two steps. The first is to establish the kind of business license that you require. You need to prepare a formal application, as free zone company registration in Dubai requires. A completed form, along with necessary and essential documentation about you and your company, would be appropriate for further proceedings.
  2. If you require a mainland setup, the process is mostly similar. You would prepare your application to the DED in this case. You can develop any required visa applications at this stage, which includes your visa as well as employee visas for your dependants and staff. The number of visas you can apply for will turn on the size of your business and where you choose to set up your business in most cases.
  3. In the final step, you’ll need to open a business bank account in Dubai to operate your business. A bank account opening in Dubai as a foreign national is not always easy. All the local and international banks have different application and acceptance criteria, and navigating them can be challenging.
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Commitbiz for Starting Your Low-Cost Business In Dubai

The application process isn’t complicated; it does require an expert’s eye. If your application has any error, it can lead to delay or rejection. That is why it’s often a good idea to work with a company set-up specialist to help you conclusively establish your business. Commitbiz is a company formation expert who can help you with the application, managing your license, and visa applications, communicating with all authorities and relevant departments, and reporting back when you’re ready to start trading. Contact us today!


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