Dubai is the middle east business hub, and conducting business in this city has proven highly profitable. The main advantages of starting a business in Dubai are:
- Excellent global connectivity,
- Entrepreneur-friendly commercial laws.
The costs of starting a business in Dubai vary from time to time and mainly depends on:
- Business activities,
- Opted jurisdiction,
- Required certifications and approvals,
- Etc.
The standard costs of business establishment in Dubai are classified into three categories:
- Mainland business setup,
- Free Zone business setup,
- Offshore company establishment.
The costs of the LLC business setup in Dubai include:
- A nominal fee issued by the Department of Economic Development (DED) allows entrepreneurs to be initially operative for six months. This is a one-time expense, allowing entrepreneurs to start their business while completing their documents.
- Trade name fees, which is basically the name a business is run under. Depending on the selected name, the costs may vary. The costs of registering a trading name include i) reservation fees, ii) commercial name fees, iii) foreign company name fees, etc.
- Renting a physical office, which is mandatory for operating business in Dubai mainland for the following reasons: i) monitoring the business operations’ legitimacy, ii) ensuring the immigration laws are adhered to, etc.
- Attestation of Memorandum of Association (MoA), which is signed between the LLC shareholders, and its cost depends on the share capital mainly.
- Drafting the LLC contract, which should be available both in Arabic and English.
- DED fees, which include annual charges depending on the type of business, and a one-time LLC registration fee plus a Mainland trade license fee. The license costs vary from business to business, and in some cases, even a deposit is requested by DED.
- Commercial license fee, which also goes by the name Ejari, should be paid annually for engaging in commercial activities.
- Dubai chamber of commerce fees, which is another fee that should be covered annually. The fees vary based on the business activities run under an LLC.
- Commercial services improvement fees, which should be paid annually.
- Administrative services fee, this fee is a one-time expense issued for all the paperwork and documentation carried out by DED.
Based on the business activities, there may be some additional fees:
- General trading company formation, which is a one-time fee,
- Contracting license, which is another one-time fee,
- Charges the real state brokers company receive, issued by the Economic Department,
- Government charges, including 5% of office rent and 20% of warehousing,
- Etc.
The main costs of starting a business in Dubai include:
- Free Zone company registration fee, which is a one-time payment, issued by the Free Zone authorities. The costs may vary based on business activities and legal form.
- Free Zone license fee is an annual charge, applicable to trading, industrial, and services companies.
- Rental costs, which are mandatory for operating business in Free Zones, allow the 100% ownership of the registered company’s assets and liabilities. Free Zone rental costs can be monthly, yearly, or even a lease of several years. The rented place is also a decisive factor for the number of visas the main applicant can request and business activities conducted under the registered company.
Renting options available in the majority of Free Zones
- Smart desk, which is the most suitable option for freelancers and small-scale businesses, and as its name suggests, it signifies just a desk for one person to run their business.
- Office units, which are small areas created into a self-sufficient office space. Their costs differ depending on the area they are located in.
- Permanent offices/ warehouses, which are more expensive than the previous two options, include more perks.
The additional costs for starting a business in Dubai include:
- Share capital requirements, which are basically the investments the shareholders of a company gather to establish it. Most of the Free Zones in the UAE require a minimum of share capital, and it is better to decide the total amount at the beginning.
- Free Zone visa fee is limited in number depending on the type of the business and the area of the announced office space. Visa fee can be levied annually and is required to be renewed every year. The visa fees for employees outside of the UAE include i) residency stamp, ii) medical fitness stamp, iii) ID card. For new employees inside the UAE, the expenses include i) residency stamp, ii) medical fitness stamp, iii) ID card, and visa issuance without leaving the UAE.
- Bank guarantee, which is mandatory for running a business in any Free Zone inside the UAE. Entrepreneurs need to present a certain amount of bank guarantee for each employee.
- Registered agent fee, which is mandatory for conducting a business in any Free Zones in the UAE. Unlike LLCs, having a local partner to run a business in these zones is mandatory from the legal point of view. The registered agent should be paid initially, and the payment will be repeated every year during the renewal of the licenses.
