What is the Cost of starting a company in Dubai? A Founder's Guide

Understanding the costs of starting a company in Dubai is the first step toward transforming your vision into a successful reality.

Dubai has cemented its reputation as a global economic hub, offering a dynamic business environment, access to international markets, and unparalleled tax benefits that attract entrepreneurs from around the world. The city’s business-friendly regulations, innovative spirit, and exceptional quality of life make it a top destination for investors looking to establish a presence in the UAE.

If you're considering this strategic move, your primary question is likely about the investment required. Understanding the costs of starting a company in Dubai is the first step toward transforming your vision into a successful reality. This guide breaks down the expenses, from affordable freelance permits to comprehensive mainland and free zone setups, providing a clear roadmap for your budget and planning.

Choosing Your Path: Mainland vs. Free Zone vs. Offshore

The first crucial decision that will significantly influence your business setup cost in Dubai is choosing the right jurisdiction. The UAE offers three distinct paths for entrepreneurs: Mainland, Free Zone, and Offshore, each with its own cost structure and operational scope.

Dubai Mainland Company Formation Cost

A Mainland company, registered with Dubai’s Department of Economic Development (DED), offers the ultimate flexibility, allowing you to trade freely anywhere within the UAE and internationally. This is the ideal choice for businesses aiming to serve the local market directly, open a physical shop or restaurant, or bid on government contracts.

While historically requiring a local sponsor, recent legal amendments now permit 100% foreign ownership for most business activities, making it more attractive than ever. However, this flexibility comes at a higher price compared to free zones. A key advantage to consider, from our experience, is that securing a corporate bank account can often be a more straightforward process with a Mainland license compared to some free zone setups.

Breakdown of Mainland Costs:

• License Fee: This is the primary government fee. A professional or service license typically starts from AED 9,950, while a general trading license can range from AED 12,500 to AED 15,000.

• Registration and Approvals: Expect various government charges for trade name reservation (approx. AED 620), initial approvals (approx. AED 345), and document notarization. The total for these initial formalities can often be significant.

• Office Rent: A physical office space is mandatory for Mainland companies. Even a basic flexi-desk can cost AED 15,000–20,000 annually, with small private offices averaging around AED 34,000 per year.

• Local Service Agent (if applicable): For certain professional licenses where 100% foreign ownership is allowed, a Local Service Agent (LSA) is still required. Their annual fee typically ranges from AED 6,000 to AED 8,000.

• Visa Costs: Budget approximately AED 5,000–7,000 for each investor or partner visa, which covers processing, medical tests, and Emirates ID stamping.

Overall, a small professional Mainland company can expect a total first-year investment of AED 15,000 to AED 25,000. A trading company can easily require an upfront cost of AED 30,000 to AED 50,000.

Dubai Free Zone Company Setup Cost

Dubai boasts over 30 specialized free zones, which are self-governing economic areas designed to attract foreign investment. These are incredibly popular because they have always offered 100% foreign ownership, 0% corporate tax on qualifying income, and streamlined setup processes. A

Dubai free zone company setup cost is generally lower than a mainland equivalent, making it the preferred choice for businesses focused on international trade, e-commerce, and consulting.

The primary limitation is that a free zone company cannot trade directly with the UAE mainland market; it must use a local distributor or set up a mainland branch. Furthermore, opening a corporate bank account can sometimes be more challenging with a license from a free zone.

Breakdown of Free Zone Costs:

• Budget-Friendly Dubai Free Zones (IFZA, Meydan, DSO): Newer zones like the International Free Zone Authority (IFZA) and Dubai Silicon Oasis (DSO) offer competitive packages, with licenses starting from approximately AED 12,000 to AED 13,000.

• Premium Dubai Free Zones (DMCC, JAFZA, DAFZA): Established zones like the Dubai Multi Commodities Centre (DMCC) offer incredible prestige and infrastructure but come with higher costs. An entry-level DMCC package can start at around AED 35,500 for the first year.

• Office Space: Free zones offer flexible office solutions, from affordable flexi-desks (often included in the package) to serviced offices, which helps keep initial costs down.

• Visa Packages: Costs are often bundled into packages. A zero-visa license is the cheapest, with each additional visa eligibility increasing the package price.

Offshore Companies

An offshore company, such as one registered with RAK ICC or JAFZA Offshore, is a legal entity used for international trade, asset protection, and holding investments. They are not permitted to trade within the UAE and cannot sponsor visas. The setup is relatively inexpensive, starting from AED 6,000–8,000, but their use is highly specific and not suitable for businesses needing a physical presence in the UAE.

Sharjah provides a popular and budget-friendly alternative to Dubai. Setting up a company in Sharjah only works for a few specialized business sectors.

Exploring Cost-Saving Options in Other Emirates

For entrepreneurs on a tighter budget, exploring free zones in Sharjah, Ras Al Khaimah (RAK), or Ajman can offer the cheapest business license in UAE.

• Sharjah Media City (SHAMS) & Ras Al Khaimah (RAKEZ): These zones are famous for their low-cost packages, with basic zero-visa licenses starting as low as AED 5,750–6,000. These are excellent entry points for freelancers and small startups.

• The main Trade-Off: While the license is cheaper, your company will be registered outside Dubai. This means that to operate within Dubai, you would eventually need a branch license or a local distributor.

Understanding the Hidden Costs of Starting a Business in Dubai

Beyond the headline figures for licenses and visas, several other expenses contribute to the total company registration fees in Dubai. It's crucial to factor these into your budget to avoid surprises.

• Document Attestation and Translation: Documents from your home country, such as educational certificates or corporate papers, may need to be legally translated into Arabic and attested by various government bodies. This can add a few hundred to a few thousand dirhams to your total cost.

• Medical Insurance: Health insurance is mandatory for all residents in the UAE. You must secure at least a basic policy to finalize your visa application.

• Security Deposits: Some free zones or landlords may require refundable security deposits for office space or other services.

• Government Fees: Small administrative fees, such as "Innovation" or "Knowledge" fees (around AED 10-20 per transaction), are added to almost every government service and can accumulate over the setup process.

Dubai has cemented its reputation as a global economic hub, offering a dynamic business environment, access to international markets, and unparalleled tax benefits that attract entrepreneurs from around the world.

TL;DR: Costs of starting a company in Dubai

How much is a trade license in Dubai?

The cost of a trade license depends heavily on the jurisdiction and business activity. On the mainland, a professional license fee starts around AED 9,950, while a general trading license fee is closer to AED 12,500–15,000. In a budget-friendly Dubai free zone like IFZA, a license package might start around AED 12,900. In premium zones like DMCC, the annual license fee alone can be AED 10,000–50,000 on top of registration costs.

What are the typical business setup packages Dubai price points?

Business setup packages Dubai price points vary widely:

• Freelance Permits: AED 5,500 - AED 15,000.

• Budget Free Zone Company (1 Visa): AED 15,000 - AED 25,000 for the first year.

• Mainland Professional Company (1 Visa): AED 20,000 - AED 30,000 for the first year.

• Mainland Trading Company (1 Visa): AED 30,000 - AED 50,000+ for the first year.

• Premium Free Zone (DMCC): Starting from AED 35,500+ for the first year.

Your Next Step with START

Navigating the various jurisdictions, fees, and requirements can be complex, but you don't have to do it alone. The costs of starting a company in Dubai are an investment in a future of growth and opportunity. By choosing the right structure and planning your budget carefully, you can set your business up for success in one of the world's most exciting markets.

Ready to take the next step? The expert team at START is here to provide tailored guidance and transparent pricing to fit your specific needs. Contact us today for a free consultation, and let's build your Dubai dream company together.