Business Setup UAE: Understanding the Costs of Setting Up a Foreign Company in Dubai
For many international entrepreneurs, business setup UAE—and particularly in Dubai—offers a gateway into one of the world’s fastest-growing markets. However, understanding the various costs involved in establishing a foreign company is crucial for planning and budgeting. In this guide, we’ll break down all the factors contributing to the cost of setting up a business in Dubai.
Why Consider Business Setup in UAE?
The UAE attracts investors due to its tax-free environment, strategic location, and advanced infrastructure. Whether you choose the mainland or a free zone, the process is streamlined and accessible. However, each choice affects the overall cost of setup.
Business Licensing Costs in Dubai
Depending on the activity of your business and the jurisdiction (mainland or free zone), licensing fees can vary significantly. Here’s a quick breakdown:
- Trade license (Mainland): AED 10,000–15,000 annually
- Trade license (Free zone): AED 5,000–14,000 annually, often bundled with other services
- Professional licenses: For consultants or service-based companies, fees can range between AED 7,500–15,000
Keep in mind that additional fees may apply for specific activities or governmental approvals.
Key Steps for Business Setup in UAE
Understanding each step of the setup process helps you account for all potential expenses. Here are the main steps involved:
1. Choosing the Right Business Jurisdiction
Dubai offers three main jurisdictions for foreign companies:
- Mainland – Direct access to the UAE market
- Free Zone – 100% foreign ownership and tax benefits
- Offshore – Ideal for global business without UAE physical presence
Your choice affects license type, office requirements, and cost.
2. Registering the Company Name
Company name reservation costs range from AED 620–720. Names must comply with UAE regulations, avoiding offensive or religious terms.
3. Initial Approval and MOA Drafting
Obtaining initial approval from the Department of Economic Development (DED) is essential and may cost around AED 110–150. Additionally:
- Drafting the Memorandum of Association (MOA): AED 2,000–4,000
- Notarization and translation of documents: AED 1,000–2,500
4. Office Space Requirement
A physical business address is mandatory for most setups. Office expenses may vary:
- Shared desk in a free zone: AED 10,000–15,000 annually
- Executive office in mainland: AED 20,000–50,000+ depending on location and space
Some free zones offer flexi-desk options to reduce initial investment.
Visa and Immigration Costs
For foreign business owners and employees, visa costs can be substantial. Here are some typical expenses:
- Investor/Partner Visa: AED 3,000–6,000
- Employment Visa (per employee): AED 4,000–7,000
- Medical test and Emirates ID: AED 1,000–1,500 per person
Some free zones include multiple visa allocations within specific setup packages, eliminating the need for separate payments.
Other Administrative and Operational Costs
Besides licensing and visas, entrepreneurs must plan for miscellaneous costs:
- Company stamp and signage: AED 300–1,000
- Bank account opening: Free to AED 2,000 (plus minimum balance requirements)
- Legal and consultancy fees: Can range from AED 2,000–10,000 depending on complexity
Some companies choose to work with professional business setup consultants to ensure accuracy and time-saving—these services, while optional, come at an added fee.
Simplifying Business Setup Costs Through Packages
To attract foreign investors, many UAE free zones offer setup packages that bundle services for a fixed price. These packages may include:
- Business license
- Office space (shared or physical)
- Trade name registration
- Initial visas
Prices can range from AED 15,000 to AED 35,000+, depending on free zone and activity type.
Cost Comparison: Mainland vs Free Zone
| Cost Component | Mainland | Free Zone |
|---|---|---|
| License Fee | AED 10,000–15,000 | AED 5,000–14,000 |
| Visa Quota | Limited, based on space | May be included in package |
| Office Rent | Higher | More flexible |
| Ownership | Up to 100% (as of recent reforms) | 100% foreign ownership |
Your decision depends on long-term strategy, client base, and need for physical presence.
Additional Compliance and Renewal Expenses
Don’t forget the recurring costs to maintain your company. These may include:
- Annual license renewal
- Visa renewal for employees
- Audit and bookkeeping requirements
- Health insurance premiums
Renewals usually mirror original setup costs but may vary based on updated policies.
Ways to Reduce Costs When Setting Up in Dubai
Here are some smart tips to save money during your business setup UAE process:
- Choose a free zone that offers package deals
- Start with shared desk options
- Limit the number of visas you apply for initially
- Bundle legal and consulting services
Staying lean early on allows you to reinvest profits as your business scales.
Final Thought: Is It Worth the Investment?
Setting up a foreign company in Dubai involves multiple layers of cost, but the benefits—tax advantages, global connectivity, and business-friendly policies—make it a worthy investment for most entrepreneurs. With proper planning, you can manage your budget effectively and start a successful journey in the UAE market.
For official documentation and more insights, visit the UAE Government Portal.
Also, check out our in-depth guide on Best Free Zones in UAE for Business Setup for further insights.
