Cost For Company Setup in Dubai: A Detailed Overview

Dubai is an investor’s paradise; hence more and more corporations are migrating to Dubai. But as with any commercial undertaking, setting up a business in Dubai has its own challenges too. The financial undertaking of a company formation in UAE requires a substantial amount of research to minimize unfavorable expenditures.

Below are a few important inquiries which will arise when creating a commercial entity in Dubai:

• Where can you set up a business in Dubai?
• What are the necessary costs involved to set up a business in Dubai?
• Is there a cost-effective way to start a company in Dubai?
• Can the business license be paid for in advance?
• Which Free Zone Company Setup process is the cheapest?
• What charges are associated with LLC company formation cost in Dubai?
• Do all free zone business setup cost the same across the board?
• Are there business setup consultants in Dubai who offer affordable services?
• What are the charges assigned by the local authorities of Dubai when setting up a business?

If these are a few of the questions which you’re also asking yourself, here is a comprehensive response to all your queries.

As far as the cost of business setup is concerned, the Government of UAE makes changes to the business setup cost from time to time, therefore, giving a defined cost is not quite possible. Hence, it’s important to team up with an experienced and a reputable business setup consultancy in Dubai as they know all the ins and outs of the whole business setup process in Dubai and will help you make an informed decision.

From keeping you updated regarding the fluctuating judicial prices to inform you about any changes made to the governmental charges or business setup laws, the business setup consultancy firm will help you at each step of your company formation process. The cost of setting up a business in Dubai, therefore, is largely contingent upon its nature as well as any required licensing and so forth. Despite the overhanging factors which have an influence on the overall cost, here are the typical fees associated with this process. The costs are divided into three groups – Business setup in Dubai Mainland, Free Zone business setup and Offshore Company Formation in UAE.A Detailed Overview of all the Costs Involved for Starting a Business in Dubai:

LLC Company Formation Fee In Dubai Mainland

COST – LICENSE FOR COMMERCIAL PURPOSES (License and Sponsor Fees)

COST – FOR PROFESSIONAL LICENSE (SOLE PROPRIETORSHIP)

EXTRA FEES AS PER REQUIRED STIPULATIONS

*Note – All government charges as per actual, they may vary time to time.

Cost For Dubai Mainland Company Formation described briefly:

(kindly refer to the above table to see the costs associated with each license)

Preliminary Approval + Tasheel from DED

The Department of Economic Development (DED) allows you to commence your business operations immediately. A nominal one-time fee is charged which lets you start and carry out your business operations for a maximum of 6 months. Until those 6 months, you can complete the other requirements and documentation associated with the business setup.

Fees for the reservation and approval of trade name (one-time cost)

The trade name is the name under which you’ll be operating your business. The cost may differ depending on the nature/demand of the name you wish to reserve. To register the trade name, the following charges have to be paid:
• Reservation Fees
• Commercial Name Fees
• Foreign Name Fees etc.
The cost of registering the trade name is also a one-time cost and may vary depending on your mandate.

Workplace rent – LLC Business Setup (yearly cost)

Renting a physical workplace for a Mainland business setup is mandatory as it is a way for officials to have an assurance that the organization is indeed legitimate and is adhering to all the immigration laws. The rent of the office space could be a yearly/termly cost.

Attestation MOA fee (one-time cost)

This is a one-time cost and is done amongst the associates/shareholders of your company. The fee can fluctuate as it is contingent on the share investment.

Drafting the Agreement in English and Arabic (one-time cost)

This legally binding arrangement of an LLC business setup is outlined with the mutual consent of all the partners involved. This process needs to be prepared in Arabic in addition to English due to the fact that LLC businesses have both a local partner and a foreign partner. Therefore, this is to ensure that shareholders fully comprehend the documents that they are signing.

DED registration fee (one-time cost)

The Department of Economic Development (DED) of the emirate you’re registering your business in, will charge a one-time nominal fee to register your LLC business setup.

Mainland Trade License fee (one-time cost along)

This is a one-time cost but the charges may vary depending on the business activity you plan to conduct. A security deposit is also sometimes required, along with the trade license fee.

Cost for a Commercial License in Dubai/Tejari Fees (yearly cost)

This is a yearly cost which enables your company to conduct commercial activities

Chamber of Commerce Fee (yearly cost)

This is the fee which has to be paid to the Chamber of Commerce every year. The cost mentioned belongs to a general trading company. The cost may differ for an industrial or manufacturing company.

Fee for Commercial Services Improvement (Yearly Cost):

This is an annual fee which is paid to the governmental departments for improvement works.

Administrative services fee (one-time)

This is a one-time expense charged for all the paperwork involved by the department.

Other important expenses you need to account for are listed below:

1: A small percentage of the rental amount of the premises is paid to the government. If it’s an office or a shop, the government charges 5% of the rental amount. For warehouses, 20% of the rental amount is payable to the government.
2: Other additional expenses may occur, depending on the nature of your business setup.

Cost for Free Zone Business Setup in UAE

Free Zone business setup cost described briefly:

Registration Fee (one-time cost)

Paid to the Free Zone Authority at the initial registration stage, this cost is solely dependent on which free zone you are located in as well as the nature of the company.

The annual fee for Free Zone License

Companies under Free Zone jurisdiction are liable to pay this fee. This fee applies to trade companies, service companies plus industrial companies. It’s a single-window procedure and is done by the free zone authority of a specific jurisdiction.

Rental Cost

One of the main charges involved in Free Zone Business Setup in Dubai is the rental cost of the office space. The cost of the rental could be a monthly/yearly affair or could also be a lease of several years. The number of visas you can apply for and the number of business activities you can conduct depends on the size of the office you rent.

Offshore Business Setup cost in UAE

Dubai Offshore company setup cost described briefly:

Offshore Company formation fees

This fee is a one-time fee and is dependent on the jurisdiction of the establishment as well as the nature of the business.

Standard Share capital

Setting up an offshore company is a great way to carry out commercial activities plus also make investments. Some offshore companies come with a requirement of standard share capital, while some don’t have any such requirements.

Offshore Registered Office fee (yearly cost)

It is mandatory to have a registered address for the established corporation.

Open company bank account in Dubai (one-time cost)

Opening a company bank account in Dubai is mandatory to commercially operate in the UAE. This cannot be done remotely – therefore you’ll need to be physically present in Dubai.

Agent fee

Just like free zone companies, offshore company setup also requires the help of a local agent. You’ll need to pay the local agent for his services, whenever your company engages in any governmental procedure. Additionally, you’ll also have to pay the agent on a yearly basis too.

Nominee services

Shareholders, directors and other nominees are appointed to make decisions during the owner’s absence. Although their rights are indeed restricted, their services are still billed per annum.

Offshore Business Maintenance Fee:

This yearly fee is paid for the first legal year to the offshore region’s jurisdiction authority. A fixed sum is paid to the offshore authority from second year onwards.

Please note that all the information and the costs mentioned in this article are just to give aspiring investors an overview of the principal costs involved in starting a business in Dubai or UAE. These costs may vary depending on your company type, your company’s legal structure, business setup jurisdiction, and the latest governmental developments.

If you’re looking to setup a business in Dubai or UAE, get in touch with us today to get the best quotes and a tailored pricing structure for your company formation process. Our team of experts at Business Link UAE assists all national and international investors to make their dream come true all over UAE.

For more information contact us at 00 971 556070118 or Email us to info@businesslinkuae.com