Apart from being a regional hub, the tourism and economy of Dubai are diverse, the infrastructure is top-notch, and the talent it attracts is world-class.
Additionally, what also helps new businesses in Dubai is tax-free. Keeping all that in mind, we mustn’t forget about the costs involved in setting up a business in Dubai. There are a lot of opening costs that one must go through, from trade license renewal fees.
If one is setting a business up in a free zone, each of the free zones has its procedures to get started and costs. Some even have a minimum capital investment that the owners need to establish their business in a free zone, rather than merely branching out an existing company.
When you hire employees and move them to Dubai, there are costs involved in that too, sponsoring costs, getting their visas and paperwork done so they can live in Dubai. The next essential cost would be in the supply chain when you import goods; there are guidelines set up by Dubai customs. If a company is trading within the GCC, the fees charged by custom are somewhat less compared to the ones buying outside of the GCC.
Costs For LLC Business Setup in Dubai
- Initial approval from DED – The economic department will be approving of the business operations to get them started.
- Approval of trade name – This is the name of your company is going to go by to do business. It includes fees for reservations, commercial name fees, foreign name fees, and these make the prices fluctuate based on the name that is selected.
- Rent for office space – To rent an office in the mainland of Dubai is mandatory as it allows the authorities to verify the legitimacy of the companies. The office locations after getting rented also help in conducting inspections and ensuring that immigration laws stand. The rent can be termed yearly or termly.
- Attesting Memorandum of Association (MoA) – This is done between the partners of the company or the promoters/shareholders. Even though the costs differ on the share capital, it is just a one time cost.
- Drafting of the contract of LLC in Arabic and English – This is also a one time cost. For better understanding between shareholders, drafting of the agreement is done in both languages, with the mutual consent of both partners.
- DED Fees – The economic department also charges a nominal one time fee to register the company.
- Mainland Trade License Fee (included in DED Fees) – Though acquiring a license is a one time expense, the business activities will determine whether the fees would vary or not.
- Commercial License Fee (included in DED Fees) – When a company engages in commercial activity, this is a yearly fee that they have to pay.
- Chamber of Commerce Fee (Included in DED Fees) – This is also a yearly fee. It varies for companies depending on their type of business: general trading, industrial, manufacturing, etc.
- Commercial Services Improvement Fee (Included in DED Fees) – This is paid for the improvement work done by the government. This is a yearly fee.
- Administrative Services Fee (Included in DED Fees) – For all the paperwork that is to be done during the business set up, this fee is charged by the department. This is a one time expense.
Costs For A Free Zone Business Setup in Dubai
- Free zone Company registration Fee – At the initial stage of registering a business, a one-time payment needs to be done to the free zone authorities. The cost will differ based on the type of the company, whether it’s a free zone company or a branch office.
- Free zone license fee (Included in FZC registration) – This fee is applicable to trading companies, companies in the service sector and the industrial sector as well. This is a yearly charge, to function the companies under free zone jurisdictions. The free zone authorities themselves do it.
- Rental Cost (Included in FZC registration) – The original rental cost that Dubai free zone business setup incurs is an office space. It provides you with 100% ownership of assets and liabilities. The rentals in the free zone can be termed monthly, yearly, and even a lease of several years can be obtained depending on the company’s needs.
- Some renting options that are available in the majority of the free zone business setups are:
1. Smart desk service
2. Office units
3. Permanent office / Warehouses
4. Share capital requirements (included in FZC registration) – To have a free zone company established, you would need a share capital that is fixed. It could be equally divided among all the shareholders or can also be a total investment by the company.
5. Free zone visa fee – Depending on the office space acquired by the company, the visas for employment is limited in nature. There are various expenses involved for employees who are coming from outside of the UAE – residency stamp, medical fitness certificates, ID card, issue visa, etc.
6. Registered Agent Fee – In free zone business setup, you require a local UAE agent to mandate all the government procedures, which isn’t the case in an LLC company setup. The agent may charge a one time or a recurring fee with initial and renewal charges.
Costs For An Offshore Company Setup in Dubai
- Offshore Company Formation Fee – Depending on the offshore jurisdiction that is opted by the owner of the company, the registration fee varies. It is a yearly fee.
- Standard Share Capital (included in offshore company formation fee) – While an offshore business has the flexibility to conduct commercial activity alongside making investments, some jurisdictions may require a standard share capital while some may not.
- Offshore registered office fee (included in offshore company formation fee) – To incorporate an offshore company, you need to have a local presence. Even though a fully functional office isn’t a requirement, there needs to be an address registered for the company. This is payable annually.
- Charges for opening a bank account (included in offshore company formation fee) – It is a one time expense, and it is necessary to regulate commercially in UAE.
- Nominee services – During the absence of the owners, directors, shareholders or related nominees are appointed for certain and signatory purposes. The rights that the nominees have is limited, and the service provided by them is chargeable.
- Agent fee (included in offshore company formation fee) – Similar to that of free zone companies, the business setup of an offshore company also requires a local agent. Whenever the company is involved in government procedures, the agent’s services are necessary and are chargeable. The agent is also to be paid yearly.
- Offshore Business Maintenance Fee – This fee is to be paid to the jurisdiction authority of whichever offshore region the business is established at. An annual fee is paid for the first legal year, after which a fixed sum is to be paid every year.
Now you might have got an idea how the costs according to the type and area of business works. Dubai is a great opportunity to start a business or investing into. If you are looking for any assistance regarding setting up a business in Dubai, we at Commitbiz have a team of experts who can help you with forming a company, registration and consulting. Contact us today for availing further services.