A booming economy, excellent infrastructure, strategic global location and extremely attractive tax structure have long made Dubai the ideal destination for companies or entrepreneurs all over the world to set up their business.
However, for individuals planning to move their business to Dubai, the costs of setting up their company can be a tedious and intimidating part. Having a certain kind of information on how much it may cost to set up a business in Dubai can make it relaxing and easier for companies planning to open their businesses in Dubai.
How much do you need for setting up a company in Dubai?
Well, when it comes to setting up of a company in Dubai, it is not such a simple process and involves numerous mandatory permissions and approvals which of course comes along with a cost or fees which you may have to pay one-time or yearly.
So, if you have decided to set up your company in Dubai, here are certain major costs that you need to keep in mind which will give you an idea about how much you would be spending initially for your set-up.
To begin with, the costs incurred will generally depend on which areas you desire to do a business in Dubai. Primarily, there are two types of areas that you can operate in Dubai which comes with their own set of costs, ownership rights and regulations, and benefits:
- Free zone area
- Mainland Dubai area
Free Zone Set-up Costs
Setting-up your business in the free zone is not only relatively easy but also has many advantages, including complete ownership and no import duties. There are several different free zones and the costs and advantages may vary depending on the location and kind of business. Also, each free zone has different start-up procedures and fees.
Following are the usual approximate costs that are required in a free zone set-up in Dubai:
- One-time fee for registering a business in the Dubai
- One-time fee for name reservation of the company
- The yearly fee for a business licence
- The yearly fee for business premises
- Visa fee per person
Further, here is the break-up of costs and fees you should keep in mind:
Free Zone Licence
The selected Free Zone issues the licence. The cost is applied to trading, services and industrial companies.
Yearly Cost: AED 10000 – 50000
Free Zone Registration
You need to register your company in the selected free zone and pay fees to the free zone authority. The cost may differ depending on the free zone and the company type.
One-time Cost: AED 5,000 – 45,000
The rental cost is likely to vary depending on the free zone it is set up in. The area you lease will also specify the number of visas that the business can get hold of.
Average Yearly or Term Cost: AED 15,000
Free zone visa with renewal fees
Free zone companies have some amount of visas permitted according to the office space. The visa fees may differ depending on employees.
Yearly Cost: AED 3,000 – 5,000 each
Each free zone company has to prove a specific amount of bank guarantee for their employee which varies. This is a yearly expense.
Registered agent fee including renewal cost
You will require a UAE local mediator or agent in every free zone, to authorize every governmental process and assist in company set up and also during the renewal of your licence. Hence, you will be required to give fees for his services which is a one-time fee only.
These include preliminary approvals, insurance expenses, notarization charges, police clearance, medical check, postal services etc. Besides, you also need to consider:
One time cost on trade name: AED 500-1000
One time cost on MOA: AED 1000-2000
The costs of setting up a business in Mainland Dubai depend upon various factors including the business activity, visa sanction and property.
Following are the approximate costs that are required in a Mainland Dubai set up in Dubai:
- Mandatory Government fees which comprise of attorney fees, trade licence, and registration at government department. All these costs may be paid one time or annually.
- One time business incorporation fees which comprise of the amount paid for document submission, inspections etc.
- Company registration with Immigration and Ministry of Labour (if it is a new company). Noteworthy, the registration needs to be renewed after every two years.
- Annual sponsor and legal fees, commercial site fee and visa permit cost per person.
- In case of establishing a Limited Liability Company (LLC) in the Mainland, then there is minimum capital which is expected to be AED 300,000 approximately. Worth mentioning, once you obtain the trade licence for LLC, you can change this share capital to working capital. Also, you would require to partner up with a local national who will have at least 51% ownership in the business.
Further, here is the break-up of costs and fees you should keep in mind:
Preliminary Approval of Licence from DED
To start a business in Dubai, you need to get an immediate licence from the Department of Economic Development (DED). This will allow your company to start working right away for 120 days while you get all the other documents in order.
One Time Cost Involved: AED 110
Trade Name Registration
You are required to select a valid company name and get it registered. The cost may vary a little depending on the name such as fee can rise if you choose a non-Arabic name.
One Time Cost: AED 700-900
It is mandatory to have an office space to set up your company in Dubai to ascertain the legitimacy of your company. Notably, the cost of office space if rented differs depending upon the location.
Monthly Cost (average): AED 80 per square feet
Attestation of MOA
The Memorandum of Association (MOA) is to be drawn out and approved by all the partners or shareholders of the company. The attestation cost varies as per the share capital invested.
One time Cost: AED 400
Drafting the LLC Contract and Court Agreement Attestation (CAA)
The LLC contract has to be drawn up under the administration of all the partners. This will be done in both Arabic and English languages. All the partners or their attorneys are required to sign the CAA.
One time Cost: AED 1000 – 2000 for CAA and additional AED 300 for typing
Ministry of Economy Fee
This fee is required for getting your company registered.
One time cost: AED 3,000
Depending on the type of your business, the trade licence cost may vary.
One time cost: AED 15,000 and additional AED 3,000 renewal
Commercial Licence Fee
This cost will be paid to carry out commercial activities.
Yearly Cost: AED 700
Chamber of Commerce Fee
The fees vary depending on whether you have a manufacturing or industrial company.
Yearly Cost: AED 1,200
Commercial Services Improvement Fee
This fee is charged by the government for the improvement tasks that they undertake.
Yearly Cost: AED 400
Administrative Services Fee and Public Waste Municipality Fee
This is charged by the department for all the paperwork that is done and the public waste fee.
One time cost: AED 50 and additional AED 1,000 for waste
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%. This may vary accordingly as per the location and size.
Yearly Cost: AED 1,250
Besides, you will also be required to pay following costs on an annual basis to keep your company in Dubai running:
- PRO Service costs for trade licence management
- Fee for yearly audit by a local auditor
- Fee for documentation of parent company’s audit by a local auditor
- Fee for corporate PO BOX
So, these are the necessary costs linked to set up a company. However, these might differ depending on several factors such as the kind of company, business type, location and the requirement of the business. Further, some additional costs eventually add up.
Get Started Now!
Undeniably, there are several difficulties and formalities involved in setting up the business in Dubai and the associated legalities and requirements. So, it is advisable to take the services of Shuraa Business Setup to make the entire process easy and understandable. We are the pioneers when it comes to hassle-free business setup services in Dubai!
So wait no more and contact Shuraa and get started with your dream business today!