What are the Costs Involved in Setting Up a Business in Dubai?
Setting up a business in Dubai is an exciting venture, but understanding the costs involved is essential. Dubai offers vast growth opportunities, supported by a business-friendly environment, strategic location, and world-class infrastructure. However, when it comes to company setup in Dubai, there are several expenses to consider. From licensing fees to office space, and employee visas, the costs can vary based on the type of business you’re planning to establish.
In this blog, we will break down the various expenses involved in the Dubai company setup.
1. Business Licensing Costs
The first major expense in company setup Dubai is the cost of getting a business license. Every business operating in Dubai requires a license to legally function. Depending on the nature of your business, the type of license you need will vary:
- Commercial License: For businesses involved in trading goods and services.
- Professional License: For service-based businesses such as consultancies or freelancers.
- Industrial License: For businesses involved in manufacturing or industrial activities.
The cost of a business license can range from AED 10,000 to AED 50,000 or more, depending on the activity and the location of your business. Mainland licenses tend to be slightly more expensive than free zone licenses due to the broader range of activities they allow. Some specialized licenses may have additional fees, so it’s important to factor that into your budget.
At Bizvise, we help you identify the right type of license for your Dubai company setup, ensuring you comply with all legal requirements while keeping your costs in check.
2. Trade Name Registration Fees
Another essential step in the company setup in Dubai process is registering your trade name. Your trade name is the official name under which your business will operate, and it must be unique and comply with the UAE’s regulations. The cost of registering a trade name ranges from AED 600 to AED 2,000, depending on the complexity and uniqueness of the name.
In addition to the initial registration fee, you may also incur fees for trade name reservation and approvals from relevant authorities. This is a relatively small but necessary cost for any new business looking to establish a presence in Dubai.
3. Local Sponsor Fees
In many cases of establishing a mainland company in Dubai, foreign investors must engage a local sponsor who possesses 51% of the company's shares. This local sponsor is generally an Emirati individual or entity. Although they may not participate in the daily operations of the business, they are legally obligated to serve as a shareholder.
The expenses associated with securing a local sponsor can vary significantly based on the terms of the agreement. Some sponsors may impose an annual fee that ranges from AED 10,000 to AED 30,000 or more, while others might take a percentage of the profits. It is crucial to negotiate terms that are beneficial for both parties and consistent with your business goals.
Recent amendments to UAE legislation now permit 100% foreign ownership in specific sectors, thereby removing the necessity for a local sponsor in those instances. If your business is categorized within these sectors, you may be able to eliminate this expense.
4. Visa Costs
Another considerable cost associated with establishing a business in Dubai is the acquisition of visas for both yourself and your employees. The visa expenses depend on the number of employees you intend to hire, the type of visa required, and whether you are opting for a mainland or free zone company setup in Dubai.
For a mainland enterprise, the cost of an employment visa generally falls between AED 4,000 and AED 7,000 per employee, which includes medical testing and Emirates ID registration. Furthermore, you should also consider the costs of dependent visas if you plan to relocate family members to the UAE.
Free zones may provide package deals that encompass a specific number of visas along with the business license, making this option more economical for smaller enterprises or startups. Bizvise can assist you in navigating the visa application process, ensuring that all documentation is properly managed to prevent unnecessary delays or additional costs.
5. Office Space Rental
One of the most fluctuating expenses associated with establishing a company in Dubai is the cost of office space rental. The city provides a diverse array of office solutions, including co-working spaces, virtual offices, fully serviced offices, and warehouses. The overall cost will be influenced by your specific business requirements, the size of the office, and its geographical location within Dubai.
- Co-working or shared office spaces: These are particularly suitable for startups or freelancers, offering flexibility at a more affordable price, generally ranging from AED 800 to AED 3,000 per month.
- Virtual offices: This option serves as a budget-friendly alternative for businesses that do not necessitate a physical office but require a business address for licensing. The annual cost for virtual offices typically falls between AED 1,500 and AED 5,000.
- Serviced offices or standalone offices: Larger enterprises or those needing additional space may opt for fully serviced or standalone offices in prestigious areas such as Downtown Dubai or Business Bay, with rental costs ranging from AED 50,000 to AED 150,000 per year or more.
To effectively manage office space expenses, it is crucial to evaluate your current requirements and project future growth. Bizvise provides a variety of office solutions tailored to your business size and financial plan, allowing you to concentrate on your operations without the strain of excessive rental costs.
6. Legal and Notarization Fees
Establishing a company in Dubai involves several legal procedures, including the notarization of documents, contract drafting, and obtaining approvals from various governmental bodies. Depending on the intricacy of your business structure, you may require the assistance of a legal professional for document preparation and submission.
The costs for notarization and legal services can range from AED 1,500 to AED 5,000, contingent upon the number of documents and the extent of assistance needed. While this may appear to be an additional financial burden, it is an essential step to ensure compliance with local laws and regulations.
At Bizvise, we collaborate closely with legal professionals to facilitate the process, ensuring that your company setup in Dubai proceeds smoothly and avoids any legal complications.
7. Marketing and Advertising Expenses
Establishing a new business in Dubai necessitates a comprehensive marketing strategy to draw in customers and enhance brand recognition. The expenses associated with marketing can differ based on your objectives and sector; therefore, it is crucial to set aside a budget for both digital and traditional marketing initiatives.
- Website creation: Developing a professional website is vital for creating an online presence. Depending on the site's complexity, costs may range from AED 3,000 to AED 10,000.
- Digital marketing: Engaging in social media campaigns, search engine optimization (SEO), and pay-per-click (PPC) advertising can incur monthly expenses between AED 5,000 and AED 20,000, contingent upon the scale and reach of your campaigns.
- Traditional advertising: Utilizing billboards, print advertisements, and event sponsorships tends to be costlier but can effectively reach local audiences. These expenses can vary from AED 10,000 to AED 100,000 or more, depending on the medium and duration of the campaign.
Bizvise provides digital marketing services customized to meet your business requirements, ensuring that your marketing budget achieves optimal returns on investment.
8. Miscellaneous ExpensesIn addition to the primary costs associated with establishing a business in Dubai, various miscellaneous expenses may arise. These can encompass fees for opening a bank account, business insurance, and IT infrastructure. Although these expenses are typically minor, they can accumulate and should be included in your overall financial plan.
- Bank account opening fees: These fees can vary between AED 1,000 and AED 5,000, contingent upon the bank and the account type selected.
- Business insurance: This is crucial for safeguarding your assets, with costs ranging from AED 2,000 to AED 10,000, depending on the scale and nature of your enterprise.
- IT infrastructure: The expenses for setting up computers, networks, and security systems can fall between AED 5,000 and AED 20,000, based on your specific needs.
Establishing a business in Dubai represents a considerable investment; however, with meticulous planning and budgeting, it can yield long-term success and profitability. A comprehensive understanding of the costs associated with setting up a company in Dubai is vital for making informed choices and ensuring that your business is positioned for success from the outset.
Whether you are launching a new venture or expanding an existing one, Bizviseis equipped to assist you in navigating the company setup process in Dubai. We provide expert advice and customized solutions tailored to your financial parameters. From licensing and visa processing to securing office space and marketing assistance, we are dedicated to facilitating a cost-effective business journey in Dubai.