A business owner measuring the cost of business setup in UAE.

What is the Cost of Business Setup in UAE?

by Zaara 17, Nov 2023

The cost of business setup in UAE is a major deterrent factor for all those seeking to relocate their businesses. Having a better understanding of the cost of business setup in UAE will make it easier for businesses that want to be formed there. This blog provides you with an overview of the costs of setting up a business in the UAE.

When it comes to selecting a business area in UAE, you have two choices: the mainland area and the free zone area of the region. The costs vary for both areas and are beneficial in their own way.

Cost of Business Setup in UAE – Mainland and Freezone

Mainland Setup Costs:

The cost of setting up a business in the mainland area depends on factors such as the size of the business, the number of visa licenses, and the locations. Some extra costs that increase the cost, however, include the following –

a) Mandatory Government Fees:

It includes notary fees, trade licenses, departmental registration, and lawful translations. All these can be either a one-time or yearly fee.

b) Business Incorporation Fees:

It comprises the fees for submitting documents, a plan of inspection, etc. It is basically a one-time fee.

The compulsory provision is new business registration with the Ministry of Labor and Immigration. They have to amend the registration every two years.

Additionally, you will have to pay out a yearly sponsorship fee, a one-time legal charge, a charge for a commercial building, and a visa per citizen.

To maintain and retain an International Branch Office in the UAE, you also need to grow the following on a yearly basis - 

  • PRO Service rates for the Management of Trade Licenses.
  • Enrolment fee for Ministry of Economy.
  • Enrolment fee for the Chamber of Commerce.
  • The fee to a Central Auditor for an Annual Audit.
  • Waste Management Charge.
  • Fee for Parent Group Audit Certification by the Central Auditor.
  • Residue Management Fee (not available in the UAE).
  • Corporation PO Box Fee.

Cost of Company Formation in UAE

It is not easy now to set up a company and require some fee at different stages. The business organization has to determine how and where the business has to be set up. If the company is set up in the free zone or in the mainland, there are unique points that the company's management needs to bear in mind.

Cost of Company Formation in Mainland

The framework that has been chosen for the company, the operation being carried out, the total number of visas needed, etc., are some of the key points that need to be considered in order to finalize a cost for the company. The company will have to spend on the following - 

  • Booking Fee for a One-Time Business Name.
  • State One-Time Fee (including trading license charge, operation charge, etc.).
  • Charge on Incorporation.
  • What Amount do the Sponsors Pay?
  • Commercial Premises Bill.
  • Registration and Visa Fees for Businesses.
  • Visa (based on population).
  • License Renewals.

Cost of Company Formation in Freezone

Just like the mainland, the company's importance depends on different factors, such as the operation being carried out, the market activity being practised, and several other factors.

Some of the expenses that occur are –

  • Registration Cost.
  • License Cost.
  • Rent of the Place.
  • Visa Obligation.
  • Profit Shares.

Other than this, there are many other factors that need to be kept in mind while creating a free zone business.

Such expenses will include raw material and human resources taxes, power, transport, etc.

Ways of No-Cost/Low-Cost Business Setup in UAE 

The cost of business setup in UAE is majorly affected by the type of region you want to form the respective business. 

Although both can be done on a budget, the all-in-one feature of free zone setups can make it one of the UAE's most cost-effective ways of registering a company.

If budget is your main focus, start by searching for the affordable free zone that will suit your needs. Apart from price, establishing a free zone has many benefits.

In addition to taking benefit of the UAE's zero percent tax rate, you will also enjoy the benefits of a full customs tax deduction, no currency limits, and the right to resettle 100 percent of your money and income.

If, however, you want to trade directly with the local UAE market, then you should set up a mainland company. Depending on the type and scale of your business, it can still be done in a cost-effective manner.

A company formation consultant can help you determine the structure that best fits your needs and your budget.

The setting up of a company can be difficult and complicated for an entrepreneur, and it is recommended that the services of a business setup consultancy are availed.

You may be all at shore trying to grasp the fee structure of setting up the business in UAE. Hiring a business consultancy company to register your UAE business start-up will make it much simpler for you; local business setup recommendations such as Commitbiz will guide you through the setup process and help you launch a business on a spin-key basis. Contact us today!

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