Dubai is popular among entrepreneurs and investors from all over the world. It is a business center of the Middle East with established international relations and favorable commercial laws. Opening a business in the city and the emirate is also beneficial because of their demographic advantages. However, starting a business requires costs. Lack of information will lead to financial losses.
Businessmen who have decided to start their own business in Dubai are most often interested in such questions:
- Where is it more profitable to register a company in Dubai?
- How much money will it take to start your own business?
- Is it possible to launch an inexpensive business?
- Which of the free zones in Dubai is the least expensive for business?
- Do I have to pay in advance for the registration of a trade license?
- Are there any affordable business solution providers in Dubai or cheap business setup services in the UAE?
- How much does it cost to register a limited liability company (LLC)?
- What taxes are levied by the government of Dubai for starting a business?
The cost of registering a company in Dubai changes periodically. Therefore, it is best to use the help of an experienced consultant who:
- will give a complete list of monetary payments that will have to be made at the initial stage;
- will provide updated information on price fluctuations for judicial and other public services;
- will advise how to avoid unnecessary expenses.
The cost of creating an enterprise depends on:
- type of activity;
- chosen jurisdiction;
- required permits and certificates, etc.
Costs of registration of a local company in the UAE
|Commercial license, Dubai||Price, dirham UAE||Professional license, Dubai||Price, dirham UAE|
|Initial approval*||120||Initial approval*||120|
|Name Approval*||620||Name approval*||620|
|Services of the state online system “Tasheel”*||230||Services of the state online system “Tasheel”*||230|
|Notarization of the foundation agreement*||1,500||Notarization of the foundation agreement*||900|
|License fee**||10 000 (approximately)||Licensed collection**||5 600 (approximately)|
|2.5% of the annual rent of the premises (currently not valid) **||500||Payment for a foreign name (if you take an Arabic name, no fee is charged)**||000|
*–one-time government fees
** – annual state fees
What is included in the cost of starting a Dubai LLC business
Initial approval from DARE
The Department of Economic Development (DER) provides a permit for the start of commercial and entrepreneurial activities on a fee basis. This gives the right to conduct commercial operations for a maximum of six months. At the same time, you need to fill out the necessary documents and submit them to the relevant authorities. The payment is made once.
The trade name is the name under which you will manage your company. The price of registration depends on which name you have chosen. It includes payments for:
- commercial name;
- name of a foreign company, etc.
A one-time payment is also charged for the approval of the brand name.
Office rental for LLC
Hiring office space for local companies is a mandatory condition. This allows officials to conduct inspections, monitor transactions and ensure that entrepreneurs comply with immigration laws. The rental period can be from a year or more.
Confirmation of the Founding Agreement of LLC
The procedure is carried out between partners or shareholders of the company. The confirmation price is a one–time payment and depends on the authorized capital.
Drafting an LLC agreement in Arabic and English
The agreement on the opening of an LLC is signed by mutual consent of the partners. The contract is drawn up in two languages: Arabic and English. This is necessary for a better understanding between all shareholders. Registration of the contract is paid. The costs also include payment for the transfer.
Tax of the Ministry of Economic Development (fee for DER)
The Ministry of Economy in each Emirate charges a nominal one-time fee for the registration of an LLC. There are other annual fees that may vary.
Trade permit for local companies (included in the payment of the GIFT)
The purchase of a trade license is a one–time expense, its size depends on the type of activity. Sometimes, when applying for a trading license, an insurance deposit is also required. The availability of permits, as well as the current activities of private enterprises are constantly monitored by departments. This entails additional expenses.
It is also called Tejari. It gives the right to engage in commerce. Tejari is paid every year.
Contribution to the Chamber of Commerce
A commercial enterprise is obliged to transfer a certain amount to the account of the Chamber of Commerce every year. The amount depends on the scale of the enterprise and its activities.
Fee for improving commercial services
This is an annual contribution paid for the improvement of work performed by government agencies.
Fee for administrative services
The administrative tax covers all paperwork performed by the department. Paid once.
Other important expenses
- One–time – launch of a general trading company;
- One-time license fee for the conclusion of the contract;
- The Economic Department charges real estate brokers;
- The government charges a small percentage of the rental price. In the case of an office or a store, the payment amount is 5%, for a warehouse – 20%;
- Other duties are possible.
How much does it cost to start a business in a FEZ
Free zones throughout the country are governed by their own set of rules and regulations. The procedures for registration of firms and related payments also differ. Some of the requirements of FEZs are similar in different regions. These include the condition of having a local sponsor, visa fee. But each zone has its own special conditions. They may concern:
- smart desk;
- licensing and registration fees;
- total capital requirements;
- bank guarantees.
The most popular licenses for the price in Free Zone Dubai are:
- with the provision of one investor visa, 17900 dirhams;
- without a visa, 11900 dirhams.
These prices vary depending on the type of company.
What is included in the cost of starting a business in the FEZ
This is a one-time payment made to the administration of the free zone at the initial stage of registration of the enterprise. The amount of payment varies depending on the type of company.
License fee (included in the registration fee)
This is an annual payment that a company under the jurisdiction of the FEZ is obliged to pay. It is applied to firms engaged in trade, services, and industry. Licensing is carried out by the free zone authority of a particular jurisdiction using the “single window” method.
Rent (included in the registration fee)
Paying for office rent is one of the main expenditure items. This ensures you 100% ownership of the assets and liabilities of the enterprise. The presence of office space facilitates control by departments. A flexible payment system has been developed for an entrepreneur: monthly, per year, or even for several years at once. The number of visas available for obtaining and the list of available types of commercial and industrial activities are indicated in the rented place. Each jurisdiction has its own terms of employment. Having studied them, you can choose the most convenient and inexpensive option for opening a company.
Rental options available in most free zone business centers:
- “Smart table”. Smart desk means having only your own desk, which is why it is cheap. This is the most suitable solution for freelancers and small businesses.
- Office premises. These are rooms created for offices. The cost of office space located in the free zone depends on the area.
- Permanent office/warehouses. A permanent office implies a full-fledged room. Its rent is higher than that of a smart desk or an office block, but there are benefits here. The same applies to the warehouse rented in the free zone.
- Requirements for the authorized capital: The organization of an enterprise in a free zone requires investment either on the part of the company’s shareholders or on the part of an individual entrepreneur. To simplify the procedure, it is necessary to determine the size of the authorized capital at the very beginning. The amount can be either divided equally between the shareholders, or a total investment within the firm. In most FEZs in the country, the requirements for the authorized capital to open an enterprise are minimal.
- Visa to the free zone: Private institutions of the FEZ have a limited right to obtain a work visa. It depends on the area of office space purchased by the owner. The visa fee is charged annually and requires an extension. For a new employee, the costs of obtaining a residence stamp, medical certificates and registration of an identity card will be required.
- Bank guarantee for the free zone. This is another type of mandatory financial contribution. The free zone enterprise must have a certain amount of bank guarantee for each employee.
- Fee for a registered agent. To complete all the necessary government procedures when registering in the FEZ, you will need a local registered agent. His work must be paid for. The initial amount is paid for assistance in obtaining a license. If it is extended, the amount is paid again.
Depending on the free zone, you may have additional expenses in the form of a fee for:
- name approval;
- premium bank account;
- typing and delivery;
- medical examination;
- police permit;
- identity card.
Costs of opening an offshore company
|Costs||Price, dirhams UAE|
|Payment for the launch of an offshore company||15 500|
|Standard Share Capital||No deposit needed|
|Registration of an offshore office||No data available|
|Nominal services||Included in the payment for the creation of the company|
|Maintenance/renewal fee (not charged in the first year)||12 000|
What is included in the cost of organizing an offshore business
Organization of an offshore company
To register an offshore company, it is required to pay a registration fee. Its amount depends on the type of business activity, as well as the offshore jurisdiction chosen by the owner of the company. It is made once a year.
Standard share capital
Offshore business is a flexible tool for conducting private activities and investing. In some offshore jurisdictions, there is a restrictive condition on the standard authorized capital, in others there are no such restrictions.
Offshore office registration
The presence of an office is important for the registration of an offshore company. It is not necessary that it be fully operational: there are conditions for different types of commerce. But the presence of a registered address is mandatory. These expenses are paid annually.
Fee for opening a bank account
A bank account is required for commercial activities in all seven emirates. Its opening is paid. This expense is preliminary and is paid once.
Directors, shareholders or related candidates are appointed to resolve issues during the absence of the owner. The owner grants limited rights to nominees on a paid basis.
To create an offshore business, a local agent is required, who needs to be paid for assistance whenever the company participates in any government procedures.
Offshore business service
The service fee is paid in favor of the authority of jurisdiction of the offshore region. This is the fee for the first legal year. Starting from the second year, the entrepreneur pays a fixed amount to the offshore authority.
The above expenses give entrepreneurs who decide to work in Dubai or another emirate a clear but generalized picture of the main costs associated with starting their business. Regardless of whether you plan to invest your dollars or euros, these costs will be calculated in UAE dirhams and may vary. It depends on the type of company, the legal structure of the firm and a number of other conditions.