Dubai has emerged as a global hub for multinational businesses due to its strategic location, world-class infrastructure, and business-friendly environment, making it a prime destination for business setup in Dubai. Entrepreneurs worldwide flock to the city to take advantage of its favorable tax regime, ease of doing business, and access to international markets. According to the World Bank’s Doing Business report, Dubai ranks among the top cities globally for ease of starting a business.

New businesses benefit from a competitive and cosmopolitan environment, advanced financial systems, and proximity to emerging markets in Africa, Asia, and the Middle East. This makes Dubai an attractive destination for business setup, and whether you’re looking for a Dubai Freezone license or exploring other options, there are multiple paths to choose from.

4 Key Factors Influencing the Cost of Business Setup in Dubai

Understanding the costs involved is crucial when planning a business setup in Dubai. The cost can vary significantly depending on factors such as the type of business, location (free zone, mainland, or offshore), and business activities. Below, we’ll explore these factors in more detail.

1. Types of Business Licenses in Dubai

Dubai offers three main types of business licenses, each with its associated costs:

• Dubai Freezone License: A free zone license is ideal for businesses that plan to operate only within a specific zone or intend to export goods internationally. The cost for a Dubai freezone license typically starts around AED 10,000 to AED 15,000. Free zones also offer 100% foreign ownership and exemption from import/export duties, making it a popular option for international businesses. However, businesses cannot operate directly in the UAE market without partnering with a local distributor.
• Mainland License: A mainland company formation in Dubai is ideal for companies that want to operate within the UAE market. This license allows for mainland business formation in Dubai, enabling businesses to freely trade within the country and bid on government projects. The cost for a mainland license generally starts at AED 15,000 and can go up based on factors like office space and the nature of the business.
• Offshore License: If your focus is on international trade or holding assets, an offshore company formation in Dubai could be the best option. Offshore licenses are cost-effective, starting around AED 12,000 to AED 20,000. However, offshore companies cannot conduct business within the UAE market directly.

2. Office Space and Real Estate Costs

Depending on the business setup type, you may be required to rent office space. Free zones usually offer flexi-desks or shared office spaces that can reduce costs significantly. For instance, flexi-desk options in some free zones start from as low as AED 5,500 per year. On the other hand, if you’re opting for a mainland license, you’ll need to rent physical office space, which can increase your expenses.

Real estate prices in Dubai vary widely depending on the location. Office spaces in prime areas like Business Bay or Downtown Dubai will come at a premium, while locations further from the city center, like Jebel Ali or Al Quoz, offer more affordable options.

3. Visa Costs

The cost of employee visas also varies depending on the business setup type and the number of visas required. Free zone companies can issue visas to a limited number of employees based on their office space size. The cost of a visa typically ranges from AED 3,000 to AED 6,000 per employee, including medical tests and Emirates ID charges.

Mainland businesses have greater flexibility in hiring and can sponsor more visas. However, they may need to meet minimum office space requirements to qualify for additional employee visas.

4. Government Fees

Each business setup in Dubai involves paying specific government fees, which depend on the business type and the licensing authority. For example:

• For free zone companies, government fees can start from AED 3,000 to AED 7,000 annually.
• Mainland companies are subject to annual government registration and renewal fees, which can range from AED 5,000 to AED 15,000 depending on the type of business activities.

Additionally, freezone business setup in Dubai offers perks like zero corporate tax and zero personal tax, which can help reduce long-term operating costs.

Hidden Costs to Consider

While the above outlines the basic costs, there are other hidden expenses to be aware of, including:

• Pro Services: Setting up a company in Dubai often requires assistance with legal documentation, translations, and dealing with various government entities. PRO services can cost anywhere from AED 2,000 to AED 5,000, depending on the complexity of your setup.
• Accounting and Audit Fees: Businesses in the mainland and free zones are required to maintain proper accounting records and may need to conduct audits, especially if the turnover exceeds a certain limit. This can add AED 5,000 to AED 15,000 annually.

These factors should be factored into your overall cost estimation when planning your business setup in Dubai.

Free Zones vs Mainland vs Offshore: What’s Right for You?

Choosing between a free zone, mainland, or offshore business setup depends on your long-term business goals

• Dubai Freezone License: Ideal for international companies that want to export goods or services. Free zones offer attractive tax incentives and 100% foreign ownership, but businesses cannot trade directly within the UAE market.
• Mainland Business Formation in Dubai: Suitable for businesses that want to tap into the UAE’s local market. Mainland companies can freely conduct business within the UAE but may face higher costs and different regulatory requirements.
• Offshore Company Formation in Dubai: Perfect for businesses looking to manage international assets or conduct international trade without operating within the UAE market. Offshore companies offer a cost-effective solution but come with limitations on local trading activities.

Why Choose Cleritbiz for Your Business Setup in Dubai?

Setting up a business in Dubai can be complex, with numerous decisions to make regarding licensing, location, and legal requirements. This is where Cleritbiz comes in. With over 10 years of experience and a proven track record of helping more than 2,000 businesses register in the UAE, Cleritbiz provides expert guidance to ensure a smooth and hassle-free setup process. From obtaining a Dubai Freezone license to advising on mainland or offshore company formation, Cleritbiz has the expertise to help you every step of the way. Choose Cleritbiz for reliable, professional service and a successful business setup in Dubai.