Starting a Business in Dubai: An Exciting Journey

Greetings, fellow entrepreneurs! I am extremely excited to write and share my thoughts on starting a business in Dubai, having lived through that exciting expedition myself. I can assure you that it is a huge adventure. So take a cup of karak chai, which is one of the drinks here, and let’s get right to the point where we will look into the business setup costs in this beautiful city.

Business Setup in Dubai: Overview

Let us first understand the talking point here before I get down to the actual nitty gritty, that is, "crunching numbers." In Dubai, there are three broad categories of business structures available:

Free Zone
Mainland
Offshore

All of which have their own advantages and, you guessed it again, costs. Hmmm, I recall that when I was doing my own fact-finding, I was so confused with those I had in mind. But worry not, it is not that complex once the basics are grasped.

The primary elements that will impact your setup costs include:

The type of business structure you select
What business do you intend to carry on
How many visas do you wish to apply for
What size is your intended office space

Dubai Free Zone Business Setup Costs

Free Zones, ah! These are small business havens located across Dubai city. They allow 100 percent ownership by foreigners, nice for us expatriates. Some of them include DMCC (Dubai Multi Commodities Centre) and DIFC (Dubai International Financial Centre).

Application and License Charges

These may cost you between AED 10,000 and AED 50,000 (about $2,700 and $13,600 respectively) with respect to the Free Zone. When registering my business with DMCC, I paid approximately AED 20,000 for the registration and licensing.

Office Options and Costs

Free zones offer various office options:

Flexi-desk: From AED 15,000/year
Co-working space: From AED 25,000/year
Small office: From AED 50,000/year

For my case, I began with a flexi-desk, which was what I needed and could afford at the time.

Visa Costs

Per visa costs AED 3,000-5,000. Do not forget, medical tests costs and Emirates ID costs are additional factors that you will have to include.

Share Capital Requirement

Every Free Zone has its own set of minimum capital requirements, but it usually is around AED 50,000. Other Free Zones have such a capital requirement; the exception is a nice bonus – some do not.

Cost of Opening a Business on Main Land

Forming a mainland company allows you to conduct business anywhere in the UAE and not just in the free zones. This is what I finally moved to as my business expanded.

Registration and Licensing Fees

These cost between AED 15,000 and AED 50,000 based on the nature of your business activity.

Office Space Options

Paid office because other than free zones, mainland businesses have and require an operative office from the first day of business. However, the expenses can be broad such as:

Small office in a business center: From AED 50,000/year
Commercial space in a prime area: That rate can even go up to millions a year or more!

I began with a small office in a business center because it was a good compromise between home office and commercial rents.

Additional Fees

Don't overlook these:

Local sponsor fees (if needed): From AED 15,000/year
Trade Name Registration: Approximately AED 2,000
Initial Approval: Around AED 1,000

Other Factors Influencing Costs

Once again, your business type is significant in the computation of costs. For example, when I added a trading license to my existing service license, it had its own fees.

The industry-specific licenses and permits may also make your expenses higher. For instance, people from food and beverage will require further clearances from the Dubai Municipality.

And there are annual maintenance and renewal costs that you cannot ignore. Those things can catch you if you are not ready!

Unforeseen & Extra Charges

Now, at this instant, let me share a personal history by saying: when I started and believed all the expenses planned had already been incorporated, well, I know some of you smile. Here are some costs that thankfully I was able to avoid:

Administrative Charges

Things like document attestation, PRO services charged for processing of visas, & official company stamps & imprint are very expensive.

Compliance and Legal

In case of contracts, you may require legal advice or find it necessary to retain somebody to assist you with compliance matters. I spent an approximate amount of AED 10,000 on legal expenses in the 1st year.

Accounting and VAT Registration

In the case that you are VAT registered (which you will have to be due to your turnover surpassing AED 375,000), even accounting will have to be included. I make accounting expenses of about AED 1,000 per month out of the accounting services provided.

To Sum Up

Setting up a business in Dubai is neither simple nor inexpensive, yet it is undeniably reasonable. Depending on your preferences, there are total expenditures that can go from AED 50,000 to AED 500,000 and above.

What I recommend: plan on a ceiling that is higher than even what you as the business owner feel comfortable with. You can never go wrong having a buffer. Also, keep in mind that these expenses are investments into your dream. I started small and over time expanded my operations, so can you!

The business environment in Dubai is very active and full of prospects. Sure, there are costs, but the upside is enthralling. So, what is it going to be? Taking the plunge? If you have any questions, feel free to drop them in the comments. I can never get tired of discussing my adventures in this beautiful city, so please ask me anything!

UAE WONDER

Search Suggest

Starting a Business in Dubai: The Real Costs You Need to Know!