Cost of starting a company in Dubai
Cost of Starting a Company in Dubai
Entrepreneurs and investors throughout the world flock to Dubai. The city has strong global connections and entrepreneur-friendly commercial rules as the Middle East’s economic hub. As a result, launching a business in Dubai is extremely profitable, not to mention advantageous demographically. When it comes to starting a company in Dubai, however, knowing how much it costs to start a firm is critical. Unwanted overheads might result from a lack of information.
The cost of registering a company in Dubai fluctuates, thus a set charge for various permissions and documents is doubtful. As a result, it is best to contact a well-informed and affordable business setup consultancy in Dubai, which can assist entrepreneurs in becoming familiar with the charges levied at the outset, provide updates on changes in judicial prices and other governmental services, and advise them on likely expenditures to avoid unnecessary outlays.
The cost of Starting a Company in Dubai is also determined by the sort of business, the jurisdiction chosen, the permissions and certificates required, and other factors. The costs are divided into three categories: Mainland Company Formation, Free Zone Company Formation, and Offshore Company Formation.
The following are the costs of forming an LLC in Dubai and the United Arab Emirates:
Initial approval from DED-
Initial permissions from the Department of Economic Development (DED) are required to begin company activities. For a little charge, you can start operations for up to six months, giving you ample time to finish your other paperwork. This is a one-time expenditure associated with the costs of starting a company in Dubai.
Approval of a trading name
The trade name is the name under which you will run your business. The pricing may vary depending on the name you select. Charges such as reservation fees, commercial name costs, international business name fees, and so on are included in trade name fees. It may be extended further based on your instructions. The fee of approving a trading name is likewise one-time.
Renting an office for LLC
For a mainland business establishment in Dubai, renting an office space is required since it assists authorities in ensuring that firms are legal. This enables officials to perform inspections, monitor activities, and guarantees that your firm follows the law. Renting an office space can be done on an annual or term basis.
Attestation of MoA
The Memorandum of Association (MOA) of an LLC is attested by the partners or shareholders of the firm. Although it is a one-time charge, the attestation cost may vary based on the share capital.
Drafting the LLC contract in Arabic and English
The contract for forming an LLC in Dubai is typed with the partners’ approval. The contract must be written in both Arabic and English to ensure that all stockholders understand it. The expense of translation may be incurred in addition to the contract’s writing. This is also a one-time expense.
Every Emirate’s Ministry of Economy levies a modest one-time cost to create LLCs. However, other annual costs differ from company to company.
Mainland trade license fee (Included in the DED fee)
A trade license is a one-time fee, however, the amount varies based on the company activity. When applying for a trade license, you may be asked to submit a security deposit. Departments inspect licenses and other feasible operations regularly, which might result in a fee at some point.
Tejari / Fee for commercial license
Every year, the commercial license fee, also known as Tejari, must be paid to engage in commercial operations.
Fees for the Dubai Chamber of Commerce
The Dubai Chamber of Commerce must be paid every year. The figure given is for a general trade firm. The cost of an industrial or manufacturing firm may differ.
Fee for commercial services improvement
This is an annual sum provided to the government for the development of its departments’ work.
Fee for administrative services
There is also an administrative fee for all of the department’s documentation; however, this is a one-time cost.
Other important expenses
1. One-time cost for general trading business setup
2. One-time charge for contracting license
3. Economic department charges real estate brokers company fee
4. The government levies a modest fee based on the cost of the rented space. A 5% fee is required for an office or a store, whereas a 20% fee is required for a warehouse.
5. Depending on the nature of the business establishment, additional fees may be imposed.
Costs incurred for free zone business setup
Because each of the UAE‘s free zones operates under its own set of laws and regulations, the procedures and costs for Starting a company in Dubai may vary. While certain features, such as having a local sponsor, rental coats, and the visa charge, are the same across areas, others, such as the smart desk, office units, warehouses, licensing fee, registration fee, shared capital requirements, visa fee, and bank guarantee, may vary.
The following are the costs of establishing a free zone business in Dubai and the United Arab Emirates:
Free zone company registration fee
This is a one-time payment given to the free zone authorities when registering a business for the first time. The fee varies depending on the type of organization, such as an FZE or a branch office.
Free zone license fee (included FZC registration)
This is an annual fee that Freezone businesses must pay. Trading, service, and industrial businesses are all subject to the license cost. The license is handled by the free zone authority of a certain jurisdiction, and it is a one-stop-shop.
Rental cost (included FZC registration)
The cost of office rent is one of the initial costs associated with establishing a free zone firm. This gives you complete control over your assets and responsibilities. The cost of renting a freezone might be monthly, annually, or even for several years. The lowest option is determined by the jurisdiction and the rental options available. In addition, the rental location specifies the number of visas that may be obtained or the types of business that can be done.
Renting options available in the majority of the free zone business setups:
1. Smart desk: The cheapest option to start a free zone business is to use a smart desk service, which, as the name implies, entails having simply your desk. For freelancers and small enterprises, this is the ideal option.
2. Office units: These are tiny sections that have been converted into self-contained office spaces. Again, the cost of an office unit in a free zone is determined by the chosen region.
3. Permanent office/warehouses: A permanent office is a fully functional office. A permanent office is more expensive than a smart desk or office unit, but it also comes with additional benefits. The same may be said for a warehouse in a free zone.
4. Share capital requirements: To establish a free zone firm, either the business’s shareholders or an owner must invest. The money may be shared evenly among the owners or used as a complete investment in the firm. In most of the UAE’s free zones, minimum share capital is required to start a business.
5. Free zone visa fee: A free zone firm has a restricted number of work visas, which is determined by the amount of office space purchased by the owner. The price for a visa can be charged once a year and must be renewed. A residency stamp, medical fitness certifications, and an ID card are all expenditures for a new employee working outside of the UAE. For a new employee working within the UAE, the costs include a residence stamp, medical fitness certifications, an ID card, and the issuance of a visa without leaving the country.
6. Bank guarantee for free zone: Having a bank guarantee is another cost for free zone enterprises. Every employee in a free zone firm must have a bank guarantee of a specific amount.
7. Registered agent fee: In contrast to LLCs, a UAE local agent is required to fulfil all governmental processes in the event of a free zone. This registration agent must be compensated for his services; this is a one-time fee that can be repeated when licenses are renewed.
Important expenses according to the freezone
- Name approval charges
- Notarization charges
- Insurance expenses
- Premium bank account in Dubai
- Typing and shipping fees
- Medical check
- Police clearance
- Emirates ID card
Costs for offshore business setup in Dubai:
Offshore company formation fee
Annual registration expenses for an offshore business. The registration cost is determined by the owner’s choice of jurisdiction as well as the type of business activity.
Standard share capital
An offshore firm is a versatile tool for conducting commercial operations and making investments. Some offshore jurisdictions, on the other hand, may have a minimum share capital requirement, while others do not.
Offshore registered office fee
To form an offshore business in Dubai, you must have a local presence. However, having a fully operating office that is exposed to commercial activities is not required. However, a registered address is required. This is a once-a-year expenditure.
Charges for opening a bank account
To conduct business in the UAE, you must have a bank account. This is a one-time cost.
During the absence of the owner, directors, shareholders, or associated nominees are appointed to make decisions and sign documents. The candidates are granted restricted powers and must pay for their services.
Offshore business setups, like mainland and free zone firms, require a local agent who is paid every year for his services whenever the company engages in any governmental processes.
Offshore business maintenance fee
The jurisdiction authority receives a maintenance charge. For the first legal year, there is an annual charge; after that, a set sum is paid towards the authority.
Please keep in mind that the company set-up expenses included in this article are intended to provide aspiring entrepreneurs and business owners an idea of the major expenditures associated with starting a business in Dubai or elsewhere in the UAE.
How Radiant Biz helps you
In matters like business setup, people tend to get confused and get in chaos due to several rules and requirements. This is the time when people tend to look for an expert. A lot of chaos can be avoided if guidance is taken from the very beginning. Every venture may have unique requirements like location, customer convenience, logistical feasibility, and banking services.
We at Radiant Biz strive to understand these unique precepts and provide expert and reliable consultation to our clients with updated laws and governing regulations, awareness of their rights, and cost-effective business solutions tailor-made to their business needs and budget.