How Much Does It Cost to Start a Company?

Introduction

Starting a company in Dubai can be a smart decision. The city is growing fast and is known for its strong economy, business-friendly rules, and good lifestyle. But one of the most common questions people ask is: How much does it cost to start a company in Dubai?

In this blog, we will break down all the possible costs in a simple and clear way. We will talk about the types of companies, the types of business licenses, government fees, office costs, and more. This guide will help you plan better if you are thinking of opening a business in Dubai.

Note :- Business formation in Dubai is the process of officially setting up a company under the laws of the UAE. Entrepreneurs can choose to open a company in the Mainland, Free Zone, or Offshore, depending on their business needs. Dubai offers flexible options, full foreign ownership in many zones, tax benefits, and easy company setup.

Why Dubai Is a Popular Place to Start a Business

Dubai has become one of the top business hubs in the world. Here are a few reasons why people love starting companies here:

No income tax for individuals
Easy company setup rules
Access to world-class infrastructure
A wide range of business activities allowed
100% ownership in many Free Zones

Dubai welcomes new businesses. Whether you’re a small entrepreneur or a large company, you will find support here.

Types of Company Setup in Dubai

Before we talk about the cost, you need to know the two main ways to set up a company in Dubai:

Mainland Company

This type of company allows you to do business anywhere in Dubai and across the UAE. You can work with government contracts and private clients.

Free Zone Company

Free Zones are special areas where foreign investors can own 100% of the company. These zones are perfect for international businesses that don’t need to work directly with the UAE market.

Offshore Company

This is usually used for international trading or holding assets. These companies cannot do business in the UAE market but have low setup costs and tax benefits.

Each of these options comes with different costs, and we’ll explain them one by one.

Main Costs to Start a Company in Dubai

Now let’s look at the different types of costs you might need to pay when setting up a business in Dubai.

Business License Fee

To start any company in Dubai, you need a business license. There are three main types:

Commercial License – For trading businesses
Professional License – For services and consultancy
Industrial License – For manufacturing businesses

License Cost in Mainland

For a mainland business, a license will usually cost between AED 10,000 to AED 15,000 depending on the type of activity and the authority.

License Cost in Free Zone

In Free Zones, the cost can vary a lot. Some Free Zones offer packages starting from AED 5,000 to AED 15,000 per year. The cost depends on:

Type of license
Free Zone location
Number of visas
Office type (desk, shared, or full office)

Name Reservation and Initial Approval Fees

Before registering your company, you must reserve a business name and get initial approval from the authority. These fees are usually:

Name reservation – Around AED 600 to AED 1,000
Initial approval – Around AED 1,000 to AED 1,500

These are one-time payments at the start of your company setup.

Office Space Cost

Depending on your business type and where you are setting up, office space may or may not be needed.

Office in Mainland

In mainland Dubai, you must rent a physical office. The cost depends on the area:

Small office – AED 15,000 to AED 30,000 per year
Medium office – AED 30,000 to AED 60,000 per year
Premium area – AED 80,000+ per year

Office in Free Zone

Many Free Zones offer flexible desk options such as:

Shared desk – AED 5,000 to AED 10,000 per year
Executive office – AED 15,000 to AED 30,000 per year

Some Free Zones allow you to set up a company without a physical office if you’re doing only online business.

Visa Fees

If you want to live and work in Dubai, you need a visa. The number of visas you can apply for depends on your business package and office size.

Investor visa – Around AED 3,500 to AED 5,000
Employee visa – Around AED 4,000 to AED 7,000 each
Medical test, Emirates ID, stamping – These add AED 1,000 to AED 2,000 more per visa

Visa costs are yearly or every 2–3 years, depending on the type.

Sponsorship or Local Service Agent Fees

For some mainland businesses, you might need a local sponsor or a local service agent (LSA). They help you meet legal rules, and you pay them a yearly fee:

Sponsorship fees – Around AED 8,000 to AED 20,000 per year
LSA fees – Around AED 5,000 to AED 10,000 per year

This cost depends on your agreement with the sponsor or agent.

Company Registration Fees

When you register your company, the government will charge a one-time fee. The amount depends on your location and business activity:

Mainland – Around AED 5,000 to AED 10,000
Free Zone – Often included in the business package

Other Possible Costs

There are a few more costs to keep in mind when starting your company:

Immigration Card and Labor Card

Immigration card – Around AED 1,000
Labor card – Around AED 2,000

Company Stamp

You’ll need a company stamp, which costs around AED 100 to AED 200.

Memorandum of Association (MOA)

This legal document shows the structure of your company. You may need a legal expert to prepare it.

MOA drafting and notarization – Around AED 2,000 to AED 4,000

Bank Account Opening

Opening a company bank account is usually free, but some banks ask for a minimum deposit like AED 5,000 to AED 50,000, depending on the type of account.

Tips to Reduce Company Setup Costs in Dubai

If you want to save money while starting your company, here are a few tips:

Choose the Right Free Zone

Some Free Zones offer low-cost packages with everything included. Pick one that fits your business needs and budget.

Go for a Flexi Desk

If you don’t need a big office, go for a shared or flexi desk. It costs less and still meets legal needs.

Limit the Number of Visas

Start with one or two visas only. You can always add more later as your business grows.

Use Business Setup Services

Some service providers offer full setup packages. They know the rules and can save you time and money.

Final Thoughts

Starting a company in Dubai is a great opportunity for many entrepreneurs. The costs depend on many factors such as license type, office space, number of visas, and your business location. Whether you choose a mainland setup or a Free Zone, planning your budget is very important.

The good news is that Dubai offers flexible options for every type of business and budget. You can even start small and grow your company over time.

If you are serious about starting a business in Dubai, it’s best to talk to a professional business consultant who can guide you through the process and help you save time and money.

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