Setting up a business in the United Arab Emirates (UAE) is an attractive opportunity for entrepreneurs seeking a global business hub with zero income tax, world-class infrastructure, and easy market access. However, understanding the business setup cost in the UAE is crucial before starting your venture. The cost varies depending on factors such as the type of business activity, location (mainland or free zone), licence type, visa requirements, and office space.
Key Factors Affecting Business Setup Cost in the UAE
The overall cost of establishing a company in the UAE depends on several key elements. These include the trade licence fees, which differ based on whether the company is commercial, professional, or industrial. Trade name registration and initial approval also add to the setup cost. The office space requirement is another major factor; businesses operating in the mainland are required to have a physical office, while free zones offer more affordable options like flexi-desks or virtual offices.
Other cost components include visa and immigration fees, especially for investors and employees, and local sponsor or service agent fees if you’re setting up a mainland company. Additionally, there are hidden costs such as document attestation, bank account setup, insurance, and annual renewals that entrepreneurs should account for.
Business Setup Cost in Dubai
As the UAE’s business capital, Dubai offers multiple company formation options in the mainland, free zones, and offshore jurisdictions. Each has its own pricing structure and benefits.
Dubai Mainland Business Setup Cost
Setting up a company in Dubai Mainland allows businesses to trade anywhere within the UAE and internationally. The trade licence and registration fees for a mainland company typically range from AED 10,000 to AED 25,000, depending on the business activity. Office rental is another significant expense, with annual costs ranging from AED 15,000 to AED 50,000 for small offices, while premium locations cost higher.
Entrepreneurs must also factor in visa costs, which average between AED 3,000 and AED 7,000 per person, and local sponsor fees, which can range between AED 10,000 and AED 50,000 per year. Overall, the estimated total business setup cost in Dubai Mainland ranges between AED 30,000 and AED 60,000 for small businesses and can exceed AED 100,000 for larger setups.
Dubai Free Zone Business Setup Cost
Dubai’s free zones are ideal for entrepreneurs seeking 100% foreign ownership, simplified regulations, and lower startup costs. The free zone licence packages start from AED 12,000 to AED 25,000, depending on the zone and business activity. Many free zones offer cost-effective office solutions like flexi-desks, which can range from AED 5,000 to AED 20,000 annually.
Visa expenses are generally similar to mainland costs, around AED 3,000 to AED 6,000 per visa. The total cost of setting up a business in a Dubai free zone starts at approximately AED 15,000 to AED 35,000, making it a popular choice for startups and small enterprises.
Offshore Company Setup Cost
For businesses looking to establish an international presence without operating within the UAE market, an offshore company setup is a cost-effective option. The registration cost for an offshore company typically ranges between AED 8,000 and AED 20,000. Offshore setups usually do not require office space or visas, making them ideal for holding, consulting, or international trading businesses.
Choosing the Right Option
When deciding where to establish your business, it’s important to consider your goals and operational needs. The mainland is suitable for businesses targeting the local UAE market, while free zones are best for export-oriented or service-based companies seeking flexibility and cost efficiency. Offshore entities work well for international holdings or virtual operations.
Final Thoughts
In conclusion, the business setup cost in Dubai and across the UAE can range from AED 15,000 to AED 35,000 for a basic free zone setup and AED 30,000 to AED 60,000 or more for a mainland company. Offshore setups are the most affordable, starting around AED 8,000. Entrepreneurs should also plan for ongoing costs like licence renewals, visa renewals, and office rent.
Whether you’re launching a startup or expanding an international business, Dubai and the UAE provide a stable and growth-oriented environment. Consulting a professional business setup advisor can help you choose the best jurisdiction, optimise your budget, and ensure a smooth company formation process.