Costs of Setting Up a Business in Dubai

If you’re considering opening your own company in Dubai, cost is a major factor to consider. Here are fees you should keep in mind

Posted on

26 April 2017

| Last updated on 24 July 2019

by Clarice Awa

Many expats come to Dubai to follow their dreams and have better lives

Whether you've just moved or have been here for years and want to venture out into the business world, there are so many factors to consider before deciding to open a company.

The initial costs are one of the major deciding factors of whether you'll be able to take on this new challenge. So we'vee put together a list of some of the main costs you'll have to add to your budget.

Keep in mind that the fees listed are only an approximation to give you an idea and that they vary a lot depending on many factors, including the type of company, what business it is, where it's located and the needs of the business. There are also always some extra smaller fees that eventually add up.

For a Limited Liability Company (LLC)

A limited liability company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the company's capital. Foreign equity in the company cannot exceed 49%, meaning you will need a local partner who has a majority share in the company. Generally, the minimum capital is Dhs 300,000.

1. Initial approval or instant licence from DED

One-time cost
Approximately: AED 110

To open a business here, you can start by getting an instant licence from the Department of Economic Development (DED). It allows you to start business operations right away, with 120 days to complete all your other documentation.

2. Trade name approval

One-time cost
Approximately: AED 700 - 900 (AED 2,000 - 3,000 for non-Arabic names)

You'll need to get approval for the name you have chosen for your company. The cost might change slightly based on the name. There are several fees to be paid for this, including reservation fees, commercial name fees, foreign company name fees, etc.

3. Office rent

Yearly/Termly cost

It is mandatory to have an office space to set up your business. This is simply to ensure that it's a legitimate business since it allows the authorities to do inspections, monitor operations and verify that immigration laws are followed.

4. Memorandum of Association (MOA) Attestation

One-time cost
Approximately: AED 400

This is done between the partners of the company. The attestation fee can be different depending on the share capital.

5. Drafting the contract and Court Agreement Attestation

One-time cost

Approximately: AED 1,000 - 2,000 for CAA + AED 300 for typing

The contract of an LLC is drafted with the mutual consent of the partners. The contract needs to be drafted in both Arabic and English, so there might be an additional cost for the translation. All partners or their attorneys will need to go to sign the Court Agreement Attestation at the court.

6. Ministry of Economy fee

One-time cost

Approximately: AED 3,000

You will be charged a fee to register your company.

7. Trade licence

One-time cost plus renewal fees

Approximately: AED 15,000 + AED 3,000 renewal (For general trading licence)

Depending on the type of your business, the trade licence fee can vary. You might also be asked to show proof of a security deposit.

8. Commercial Licence fee (Tejari)

Yearly cost
Approximately: AED 700

This fee needs to be paid annually to be able to conduct commercial activities.

9. Chamber of Commerce fee

Yearly cost

Approximately: AED 1,200

The cost for a general trading company will differ from an industrial or manufacturing company.

10. Commercial services improvement fee

Yearly cost

Approximately: AED 400

This fee goes towards the improvement works that governmental departments do.

11. Administrative services fee and public waste municipality fee

One-time cost

Approximately: AED 50 + AED 1,000 for waste

12. Market fees

Yearly/Termly cost

Approximately: AED 1,250+ (Can vary a lot)

This is a percentage paid to the government on the total amount of rent. An office or shop pays 5% while a warehouse pays 20%.

For a Free Zone Company

Setting up a company in a Free Zone has many benefits, including having 100% ownership and exemption from all import duties. There are many different Free Zones and the costs and benefits vary depending on the location and type of business.

Some of the major ones in the Dubai Emirate fall under the Dubai Creative Clusters Authority (DCCA) and the Dubai Multi Commodities Centre Authority (DMCC). There are also others such as Jebel Ali Free Zone, Dubai Airport Free Zone, and Dubai Silicon Oasis Free Zone.

Cheaper options are usually outside of the Emirate, such as Sharjah Airport International Free Zone, RAK Free Trade Zone, Fujairah Free Zone, and Ajman Free Zone.

Keep in mind that you will likely require a minimum share capital to open the company and this can also vary tremendously.

1. Office rent

Yearly or termly cost

Approximately: AED 15,000+

The cost of rent will vary based on the Free Zone it’s in. The place you rent will dictate the number of visas that your business can obtain. Your options include having a Smart Desk (for freelancers or if no office space is needed), an office unit (small and self-sufficient) and a permanent office (full-fledged office space). There is also a service charge that’s calculated as a percentage of your rent.

2. Free Zone licence

Yearly cost

Approximately: AED 10,000 – AED 50,000

This fee applies to trading companies, services companies, and industrial companies. The chosen Free Zone is the one that does the licensing.

3. Free Zone registration

One-time cost

Approximately: AED 5,000 – AED 45,000

This fee is paid to the Free Zone authority to allow you to register your company. The cost will be different depending on the Free Zone and the company type, such as Free Zone Establishment (FZE) or Branch Company.

4. Free Zone visa

Yearly cost with renewal fees
Approximately: AED 3,000 – AED 5,000 each

Free Zone companies have a limited number of visas allowed according to the office space. The visa fees are different if it’s an employee from outside or inside the UAE.

zCosts of Setting Up a Business in Dubai

5. Bank Guarantee

Yearly cost

Every Free Zone company has to show a certain amount of bank guarantee for each of its employees. For instance, this can be 45 days salary plus a one-way ticket to their home country.

6. Registered agent fee

One-time cost with renewal fees

In any Free Zone, you’ll need a UAE local agent to mandate all the governmental procedures. Therefore, you will need to pay for his help. You will need this agent to set up the company but also once it’s time to renew your licence.