Dubai stands as a coveted choice for entrepreneurs and investors globally. As the Middle East’s central business hub, the city provides exceptional global connectivity and welcomes entrepreneurs with favourable commercial laws. The strategic location and demographics make starting a business in Dubai highly lucrative.
Yet, comprehending the intricacies of company formation costs is crucial. Without proper knowledge, unexpected expenses can arise. In this blog, Shuraa Business Setup will provide a comprehensive guide on the Company Formation Cost in Dubai.
Comprehensive Guide to Company Formation Cost in Dubai
Registering a company in the UAE is meticulously structured for successful outcomes. Shuraa Business Setup takes on the complete responsibility of guiding you through the Company Formation Cost in Dubai process, providing unmatched support from the initial steps of document submission to obtaining essential company documents and beyond.
Trade Name Approval and Business Activity Selection:
Begin by finalising your company name and selecting the appropriate business activity. The chosen trade name must receive approval from the relevant authority to initiate the registration process. Shuraa Business Setup will facilitate this crucial step and coordinate the approval of your selected business activities, ensuring they align with your trade license.
Document Submission and Coordination:
Prepare all necessary documents and shareholder details for submission to the respective authority. Remarkably, a company can be established without the physical presence of shareholders in the UAE. Shuraa Business Setup expertly handles the coordination of document processing, ensuring a smooth and hassle-free company registration process within a short timeframe.
Application for UAE Residence Visa:
Once your company documents and trade license are approved, it’s time to apply for a UAE Residence Visa for investors. Shuraa Business Setup guides you through the application process, assisting in preparing the necessary documents, including the immigration card and residence visa application form. Our dedicated Businessmen PRO Agents ensure a streamlined visa processing experience with government authorities.
Residence Visa and Emirates ID Processing:
To complete the residence visa application, investors must visit the UAE for a medical test and stamping of the residence visa on their passport. Shuraa Business Setup simplifies this process, efficiently coordinating the visa documentation, processing, and passport delivery. Our expert PRO Agents handle all aspects, ensuring a hassle-free experience for investors.
Bank Account Opening Assistance:
Shuraa Business Setup collaborates effectively with UAE banks to assist in opening both corporate and personal bank accounts. While the physical presence of shareholders is necessary for corporate bank account verification due to KYC compliance, the paperwork for account opening can be handled remotely. Investors can easily combine their visit for Emirates ID and medical examination with Dubai’s bank account opening process.
Investors can access professional consulting support when partnering with experienced business consultants like Shuraa Business Setup. Our dedicated PRO Service Agents handle every investor’s business requirement, ensuring efficient document processing, company registration, and timely collection and delivery of essential documents. Trust us to represent your interests and act as your agent, providing a seamless and hassle-free business registration experience in the UAE.
Understanding Company Formation Cost in Dubai
The cost of registering a company in Dubai can vary due to occasional alterations, making it challenging to pinpoint fixed rates for approvals and documentation. Entrepreneurs are advised to consult knowledgeable and cost-effective business setup consultancies in Dubai to navigate these fluctuations and avoid unnecessary expenses. These corporate advisors educate entrepreneurs about initial charges and inform them about changes in judicial prices and other government services. They offer valuable insights into potential expenditures, helping entrepreneurs make informed decisions.
The overall Company Formation Cost in Dubai is influenced by factors such as the type of business activity, the chosen jurisdiction, and the necessary approvals and certifications. Shuraa Business Setup has compiled an up-to-date list of standard business setup costs in Dubai to simplify this process. These costs are categorised under Mainland and Free Zone setups for easy reference.
Establishing a Business in UAE Mainland
Certainly! Here are some key points summarising the information about setting up a Company Formation Cost in Dubai:
- Diverse Business Landscape: UAE Mainland is home to a wide range of businesses, from large multinational companies to small and medium enterprises.
- High Demand Sectors: Retail shops, restaurants, coffee shops, and shopping centres are in high demand, attracting global brands seeking opportunities in the UAE mainland market.
- Investment Attraction: Mainland Company Registration in the UAE is a sought-after business investment due to its market potential and accessibility to a multicultural audience.
- Amendments in Registration Process: Recent amendments in the Commercial Companies Law have eliminated the requirement for a local sponsor or service agent to register a Mainland Company in the UAE.
- Expatriate Ownership: Mainland as well as Free Zone companies can now be wholly owned by expatriates across various business categories such as commercial, industrial, and trading, except in strategic sectors like energy, banking, and Oil and gas.
- Restricted Sectors: Certain sectors like security, defence, military activities, fisheries-related services, banks, exchange shops, and telecom services require local partnerships due to restrictions on expatriate ownership.
- Company Structures: Mainland businesses in UAE operate under various company structures, allowing flexibility in business models and operations.
These points provide an overview of the critical aspects of setting up a company in the UAE Mainland.
Primary company structures are available in the UAE Mainland:
Limited Liability Company (LLC)
The Limited Liability Company (LLC) structure is widely recognised in mainland UAE and is preferred by investors with more than two shareholders (up to 50). LLCs offer numerous advantages for entrepreneurs in the region. In this setup, an investor’s liability is limited to the extent of their shares. LLCs can engage in various business activities, including commercial, services, and industrial sectors.
Notably, 100% expatriate ownership is allowed for specific business activities within LLCs, eliminating the need for a local UAE National Sponsor.
Professional Company (Civil Work Company)
Professionals such as consultants, legal experts, accountants etc. can establish a Civil Work Company in mainland UAE. This option allows the owner to retain 100% ownership of the company’s shares. Registering a Civil Work Company with the Department of Economic Development (DED) in the respective emirates offers skilled professionals an efficient way to start their businesses.
The Dubai Economy provides a variety of Professional Licenses, making it an attractive choice for entrepreneurs. Key benefits include full ownership for shareholders without requiring a UAE National as a partner.
Branch or Representative office of foreign companies
Companies operating in Free Zones within the UAE or outside the country can establish a Branch or Representative Office on the mainland. Specific criteria and requirements exist for forming a Branch or Representative Office.
This option is particularly lucrative for foreign companies seeking active expansion in UAE’s local markets. Branch Offices allow large organisations to streamline operations in new markets, allowing them to assess market conditions and audience response before making significant expansion decisions.
Establishing a Company in a Free Zone
Registering a Free Zone Company in the UAE is notably simpler compared to Mainland Company Formation. Dubai’s Free Zones are favoured for their streamlined business setup procedures, exceptional facilities, and prospering business ecosystems.
One key benefit of setting up a Designated Free Zone Company is the less Value Added Tax (VAT), a significant advantage for entrepreneurs. Additionally, operating costs for Free Zone Companies are minimal, as payments for office space, amenities, and utilities are typically made annually. This straightforward approach significantly eases the financial burden for business owners.
Company Formation Cost in Dubai- Freezone
Here are the Company Formation Cost in Dubai:
Diverse Regulations, Varied Costs:
Free zones in the UAE operate under unique rules and regulations, leading to differing procedures and charges for company setup. While certain aspects like local sponsorship, rental fees, and visa expenses remain consistent, variables such as intelligent desk facilities, office units, warehouses, license fees, registration charges, shared capital requirements, visa fees, and bank guarantees can vary based on the chosen free zone.
Dubai’s Top Free Zone License Costs:
According to Shuraa experts, one of the most popular Dubai free zone license costs are associated with the International Free Zone Authority (IFZA). The charges are AED 17,900* (including provisions for one investor visa) and AED 12,900* (without a visa). These costs vary based on the type of business entity, such as the Free Zone Entity (FZE) or branch office.
Free Zone Company Registration Fee:
The registration fee is a one-time payment made to the free zone authority during the initial stage of business registration. The fee fluctuates depending on the company type, whether a Free Zone Entity (FZE) or a branch office.
Annual Licensing Fee:
Free zone companies are subject to an annual licensing fee applicable to trading, services, and industrial businesses. This fee, regulated by the free zone authority, is an essential component of the yearly operational expenses and is part of the single-window licensing procedure.
Rental Costs and Flexibility:
Renting an office space is a significant expense in a free zone business setup. While it grants 100% ownership of assets and liabilities, rental costs vary based on the chosen jurisdiction, duration (monthly, yearly, or multi-year leases), and the available renting options. The selected rental space also dictates the number of visas obtainable, and the scope of business activities permitted for the company. Choosing the most suitable rental option involves considering these factors to optimise convenience, control, and overall expenses.
Renting Options in Free Zone Business Setups:
Smart Desk Service:
The most cost-effective choice for initiating a free zone business setup is the smart desk service, which provides a dedicated workspace for freelancers and small-scale businesses. Ideal for those seeking a minimalistic setup, this option involves having a designated desk for individual use.
Office units are self-contained spaces tailored to functional office environments. The cost of these units in a free zone jurisdiction varies based on the chosen area. These spaces offer a balance between affordability and privacy for growing enterprises.
Permanent Office Spaces and Warehouses:
A permanent office provides a comprehensive, fully equipped workspace. While more expensive than intelligent desks or office units, it offers enhanced facilities and advantages. Similarly, free zone warehouses provide ample storage options, each with associated costs based on the selected area.
Associated Expenses in Free Zone Business Setup:
Share Capital Requirements:
Free zone businesses require investment from shareholders or sole proprietors. Determining the share capital at the outset streamlines the process. The amount can be equally divided among shareholders or represent the total investment in the company, with most UAE free zones specifying a minimum share capital requirement.
Free Zone Visa Fees:
Companies operating within free zones are eligible for a specific number of employment visas, determined by the office space they occupy. Visa fees must be renewed every two years, while the license itself requires annual renewal. These expenses cover residency stamps, medical fitness certificates, ID cards, and, for new employees from abroad, additional fees for visas issued within the UAE.
Registered Agent Fee:
Unlike Limited Liability Companies (LLCs), Operating within a free zone does not require it, and within these zones, all established companies are exclusively limited liability companies (LLC). This agent’s assistance incurs initial costs and may recur during license renewals, ensuring smooth compliance with regulations.
Depending on the free zone of your choice, some of the other vital expense to note are:
- Name approval charges
- Notarisation charges
- Insurance expenses
- Premium bank account in Dubai
- Typing and shipping fees
- Medical check
- Police clearance
- Emirates ID card
Services Included in the Cost of LLC Business Setup in Dubai, UAE
1. Initial Approval from DED:
The Department of Economic Development (DED) provides initial approvals for business operations. This one-time nominal fee allows a startup window of up to six months, allowing ample time for other necessary documentation.
2. Approval for Trade Name:
The trade name, crucial for company management, incurs charges such as reservation fees, commercial name fees, and foreign company name fees. Costs may vary based on your chosen name. This is a one-time expense.
3. Renting Office for LLC:
Renting an office space is mandatory for mainland business setups, ensuring legitimacy. It facilitates inspections, operational monitoring, and adherence to immigration laws. Office rental can be an annual or monthly cost.
4. Drafting Contract in Arabic and English:
Drafting the LLC contract in Arabic and English ensures mutual understanding among shareholders. Translation costs may apply, representing a one-time expenditure.
5. Department of Economic Development Charges (DED Fee):
Every Emirate’s Ministry of Economy levies a nominal one-time fee to register LLCs. Yearly fees vary, and licenses undergo regular scrutiny.
6. Mainland Trade License Fee and Commercial License Fee (Included in DED Fee)
Acquiring a mainland trade license incurs a one-time expense, varying based on business activity, sometimes necessitating a security deposit. Additionally, commercial activities require an annual payment, known as ejari, ensuring compliance with licensing requirements. Both licenses and associated activities are subject to periodic scrutiny to maintain regulatory standards.
7. Dubai Chamber of Commerce Fee:
An annual fee payable to the Dubai Chamber of Commerce, the amount mentioned, applies to general trading companies; costs may differ for industrial or manufacturing firms.
Other Important Expenses:
- One-time general trading company formation fee.
- One-time contracting license fee.
- The economic department charges real estate brokers company fees.
- The government sets a percentage of premises rented: 5% for offices or shops and 20% for warehouses.
- Additional charges, depending on the nature of the business setup, may apply.
Commence Your Business Journey with Shuraa Business Setup
Our team of dedicated business setup professionals is here to assist you in establishing your business in Dubai or any Emirate within the UAE seamlessly and efficiently. While our services come at a charge, the nominal fee is justified by the convenience and support we provide. Investing in our services is a valuable choice, saving you considerable time, effort, and, most importantly, money!
Contact Shuraa to Consult with Our Experienced Dubai Business Setup Specialists at No Cost. We guarantee you the best prices available in the market.