Costs for setting up a company in Dubai

The cost of setting up a company is a crucial factor for entrepreneurs looking to start business in Dubai. This exciting economic centre offers numerous opportunities, but company formation costs vary depending on the type of business, location and specific requirements. In this article, you will learn everything you need to know about the costs of setting up a company in Dubai.

1. Types of company formation in Dubai

There are various ways to set up a company in Dubai, which has an impact on the costs. The main options are:

• Free zone company: Setting up a company in a free zone offers various tax benefits and facilitates international trade.
• Domestic company: This option allows companies to operate in the local market, but requires a local partner or sponsor.
• Public restrictions: Certain industries, such as healthcare or education, have specific regulatory requirements that can increase the cost of incorporation.

2. Breakdown of the costs

The cost of starting a business is made up of various components. Here are some of the most important cost factors:

• Licence fees: Depending on the type of business and location, licence fees can range from AED 7,500 to AED 15,000.
• Office rent: The rental cost for an office in a free zone varies. Smaller offices can cost from AED 10,000 per year.
• Sponsorship or partnership fees: If you are setting up a domestic company, you may need to budget for additional fees for local sponsors.
• Notary services: Notary fees for company incorporation may incur additional costs.
• Legal and Consultancy Fees: It is recommended to consult a legal advisor, especially if legal aspects are unclear.

3. Additional considerations

In addition to the direct costs, entrepreneurs should also consider the following points:

• Bank account opening: some banks in Dubai require a minimum deposit to open a business account.
• Visas and permits: Costs for work visas and other permits can also vary.
• Marketing and advertising: Budgeting for marketing activities is crucial to the success of your business.

4. Conclusion

The cost of starting a business in Dubai can vary significantly depending on the type of business, location and specific requirements. It is advisable to plan carefully and consider the various factors in order to build a successful business.

Illustrative example on the topic: Costs for setting up a company

An example of the cost of starting a business could be the story of Anna, who wanted to open a restaurant in Dubai. She opted for a free zone to benefit from the tax advantages. The licence fees were AED 12,000 and she was able to rent a small office for AED 15,000 per year. She also hired a local sponsor, whose fees took up an additional AED 5,000. In total, Anna’s start-up costs totalled around AED 35,000. Although the initial investment seemed high, Anna planned to be profitable within the first year. Thanks to careful budgeting and a well thought-out business plan, she was able to achieve her goal and today has a thriving restaurant business in Dubai.

For more information on topics in the property sector, take a look at our articles on rental agreements and property valuations.