What is the Cost of Setting up a Business in Dubai?

by Zaara 24, Sep 2015

What is the Cost of Setting up a Business in Dubai?

For all those planning to migrate their business to Dubai, costs of setting up a business can be a big deterring factor. Having a clear idea of how much it may costs to set up a business in Dubai can make the going easy for businesses aspiring to have a presence in Dubai.

In this blog, we give you a breakup of the costs involved in setting up a business in Dubai.

When it comes to choosing an area for your business in Dubai, you have two options: the city’s free zone area and the more coveted mainland area. The costs incurred will depend on which of the two areas you choose to do business.

Free Zone Setup Costs

Setting up your business in the city’s freezone area has its own advantage, particularly in terms of costs. However, costs vary by free zone i.e. it depends on which free zone you choose to set up your business. Besides, costs in a free zone area also depends on the business structure, nature, building, and a number of visas sought. 

Some of the chief ones in the Dubai fall inside the Dubai Creative Clusters Authority (DCCA) and the Dubai Multi Commodities Centre Authority (DMCC). There are also free zones for instance Jebel Ali Free Zone, Dubai Airport Free Zone and Dubai Silicon Oasis Free Zone. Apart from the minimum share capital, these are the fees incurred for Dubai free zone formation.

Office Rent Per Annum

The cost of rent may differ depending on the Free Zone it is in. The area you lease will dictate the number of visas that the business can acquire. Your choice comprises of a Smart Desk, office space and a permanent office. There may be service charge included which is calculated as a percentage of your lease.

Freezone License Per Annum

This cost is applied to trading companies, services companies and industrial companies. The selected Free Zone issues the license.

Freezone Business Registration

This cost is given to the Free Zone authority to permit you to register the company. The cost may vary relying on the Free Zone and the company type, for example Free Zone Establishment (FZE) or Branch Company.

Freezone Visa with Renewal

Free Zone companies have some degree of visas permissible according to the office space. The visa fees may vary depending on employees who are from outside or inside the UAE.

Bank Guarantee

Each Free Zone company has to prove a specific amount of bank guarantee for its employees. For example, this can be 45 days salary with additional a one-way ticket to their native country.

Mainland Setup Costs

Just like free zone costs, the costs of setting up a business in the mainland area depends on factors such as the nature of the business, visa permit counts, and premises.

We have provided a list of Dubai Mainland Company Formation cost you might incur while registration. Bear in mind that the business setup in Dubai cost listed here to give you an idea and may differ depending on multiple factors, including the kind of company, business type, location and the requirement of the business. There are also some additional costs that ultimately add up.

The cost mentioned below is for Limited Liability Company Setup as it is the most preferred corporate entity in the UAE.

Preliminary Approval of License

To commence business in Dubai, you can begin by getting an immediate license from the Department of Economic Development (DED). It permits you to set up business operations straight away. The Dubai Mainland license cost may differ depending on the type of license.

Trade Name Approval

You’ll require approval for the name you have selected for your company. The cost may change a little depending on the name. There are a number of charges to be paid for this, including reservation cost, cost of commercial name, cost of foreign company name, etc.

Office Rent

It is obligatory to contain an office space to set up your business. This is merely to make sure that it’s a legal business since it allows the authorities to conduct inspections, supervise operations and to confirm that immigration laws are being followed.

Attestation of Memorandum of Association (MoA)

The MOA is done among the partners or shareholders of the company. The attestation cost can be varying depending on the share capital invested.

Drafting Contract and Court Agreement Attestation

The contract of an LLC is drafted with the common consent of all the stakeholders. The contract requires to be drafted in both Arabic and English language, so there may be further fee for the translation. All partners or their lawyers have to sign the Court Agreement Attestation at the court.

Ministry of Economy Fees

This fee will be paid yearly to conduct commercial activities.

Trade License Fee

Depending on the nature of your business, the Dubai trade license cost may differ. You might also be inquired to present proof of a security deposit.

Chamber of Commerce Fee

The cost for a general trading company may vary from manufacturing or industrial company.

Administrative Services and Public Waste Municipality Fee

Administrative costs are paid for the necessary paperwork made by the department and the public waste fee

Market Fees or Term Cost Per Annum

A percentage of this is remunerated to the government on the whole amount of rent. An office or shop gives 5% whereas a warehouse gives 20%.

Offshore Setup Costs

You can set up an offshore company in Jebel Ali Free Zone (JAFZA).

Here is the cost break-up of an offshore company formation in Dubai.

Standard Share Capital

An offshore business is a flexible instrument to conduct commercial activities as well as make investments. However, some offshore jurisdiction might have a requirement of standard share capital, while some do not have any such constraints.

Offshore Business Registration

An offshore company registration fee is yearly. The registration fee varies depending on the offshore jurisdiction opted by the owner of the company as well as the type of business activity that will be carried out.

Offshore Registered Office Fee

Having a local presence is essential for incorporating an offshore company in Dubai. However, there is no compulsion to have a fully operational office subject to the business activity. Yet, having a registered address is a must. This expense is payable annually.

Offshore Bank Account Opening Fee

Having a bank account is essential to operate commercially in the UAE. This is a one-time, preliminary expense.

Nominee Services

Directors, shareholders or related nominees are appointed for decisive and signatory purposes during the absence of the owner. The nominees are given limited rights by the owner and their services are chargeable.

Offshore Business Maintenance Fee

A maintenance fee is paid towards the jurisdiction authority of the offshore region. This is an annual fee for the first legal year, then second year onwards, a fixed sum is paid towards the offshore authority.

Commitbiz | One-Stop-Shop for Business Incorporation in Dubai

If you feel the need to hire a business setup consultant in Dubai due to the super long process of business setup in Dubai, then we at Commitbiz can assist you. You manage your business proceedings while we complete all the procedures for you. Instead of paying fees at every step to the government, you will just have to pay us a one-time fee to us and voila! Your business will be registered in just a few days.

Contact us or chat with our consultants today!