What is the Cost of Business Setup in Dubai?
Dubai remains a great hub for entrepreneurs and investors seeking to expand their business presence in the Middle East region. With its strategic location, state-of-the-art infrastructure, and tax benefits, business setup in Dubai is an ideal option. However, understanding the costs involved is extremely necessary for a successful launch. Here’s a comprehensive breakdown of the costs to expect when establishing a business in Dubai (2024-25).
1. Fees for Business Licenses
The type of business license depends on the nature of your activities and whether you choose to start your business in the mainland or a free zone (2024-25).
Mainland License: Businesses in the Mainland are licensed to operate across Dubai and the UAE. License fees can range from AED 12,000 to AED 30,000 or more, depending on the industry and location.
Free Zone License: Free zones in Dubai cater to different industries with unique benefits that include full foreign ownership and tax exemptions. Free zone licenses typically cost between AED 10,000 and AED 50,000, depending on the location of the free zone and type of business.
2. Fees for Office Space
Setting up a physical or virtual office is essential as part of the business setup process. The cost of business setup in UAE (2024-25) includes fees for office setup. The office space varies based on location, size, and facilities.
Mainland: If you choose a physical office on the mainland, costs can start at AED 15,000 per year for smaller spaces, while office spaces with premium facilities can reach upwards of AED 100,000 annually.
Free Zone: Many free zones offer flexible working options like co-working spaces or shared desks, starting from AED 10,000 to AED 15,000 per year. Larger office spaces will naturally be much more expensive compared to the normal ones.
3. Fees for Sponsorship
For a mainland business, a local sponsor or service agent is needed. Sponsorship fees can vary depending on the relationship with the sponsor and the nature of the business activity.
Local Sponsor Fees: Annual fees for a local sponsor may range from AED 10,000 to AED 50,000 or more, depending on the agreement to be signed.
4. Visa Costs
Visa costs depend on the size of your company and the number of employees you plan to sponsor. Visa requirements vary.
Visa Fees: On average, each visa may cost between AED 3,000 and AED 10,000 that includes medical exams, Emirates ID, and processing fees.
5. Government and Registration Fees
While establishing a business in Dubai (2024-25), you need to deal with government authorities. There will be fees for registration, approvals, and processing. These fees can include:
- Trade Name Registration
- Initial Approval Fees
- Notarization of Documents
- Government Processing Fees
The overall cost for these can range from AED 5,000 to AED 10,000 depending on the type of business and its legal structure.
6. Additional Costs
Apart from the core setup expenses, several additional costs must be factored in:
- Opening a bank account: Costs vary depending on the bank but may include initial deposits and monthly fees.
- Insurance: Businesses are normally required to offer health insurance for employees and depending on the nature of the business, other types of insurance may be required, such as liability insurance.
- Legal and Consulting Fees: You may need the support and guidance of business setup consultants like Bizvise for the business setup in Dubai. Dealing with consultants or legal advisors may add to your overall costs but can be crucial in ensuring compliance and efficiency.
7. Total Estimate
After taking all factors into account, you can estimate the overall cost. The total cost of business setup in Dubai can range widely, from AED 30,000 for smaller, simpler free zone business setups, to AED 100,000 or more for more complex mainland businesses requiring larger office space and multiple visa needs.
How to Cut Business Costs While Setting Up a Business in Dubai?
The cost of business setup in Dubai (2024-25) depends on the business activity and objectives. But here are some of the steps you can follow to cut business costs:
- Choose a flexi desk or workspaces which offer various facilities of standalone office, at a low cost.
- Setting up a business in free zones can be cheaper and you don’t have to pay VAT.
- Splitting the rent with another business helps you reduce your costs.
- Save money by not hiring individuals for business-related activities which you can do yourself.
- Use online marketing tools to expand your presence.
Conclusion
Dubai offers huge opportunities for entrepreneurs, with its business-friendly policies, stable economy, and access to international markets. However, it’s essential to have a clear understanding of the overall costs involved. This will help you avoid unnecessary expenses. Whether it’s in a free zone or on the mainland, a well-thought-out plan and a deep understanding of the costs involved will be helpful for a smooth business setup process.