Dubai, without exaggeration, is considered a paradise for conducting business. In addition to optimal tax conditions, this Emirate attracts investors with cutting-edge technologies, ambitious business projects, developed infrastructure, and of course, elite office buildings equipped with the best equipment and high-speed internet. Tourists from all over the world constantly flock to the UAE. Among them are stars and celebrities accustomed to spending thousands of dollars on goods and services, stimulating the economy of the Emirates.
Opening a company in Dubai or the UAE is not difficult with the competent support of professionals. You need to choose an activity (trade, manufacturing or services), determine the location, register a unique company name, obtain the necessary documents and open a bank account. The specialists at Dynasty Business Adviser will confidently guide you through these stages, which will allow you to save a significant amount of time and business setup in Dubai cost.
In our article, we will examine how much it costs for setting up a business in Dubai or other UAE Emirates, and what expenses you can expect when running a business.
How much does it cost to open a company in the UAE “turnkey”
The UAE or Dubai company registration fees “turnkey” are relatively low. Specialists will clarify your wishes, assess your business and calculate the budget. In just a few days, you will be able to start full-fledged work.
The price of the “turnkey” UAE or Dubai company formation cost depends on many factors:
- the type of your business activity;
- the Emirate in which you want to register your business;
- your desire to open a company in a free zone;
- the size of the rented office;
- the number of licenses and residence visas
For your convenience and to save your time, we have provided the information in a price table. The average company registration cost in Dubai or the UAE that you register “turnkey” is $6,990.
Nuances of opening a company in Dubai cost
It’s interesting to know, that, as of 2023, Dubai is home to 3.7 million people, with only 15% of them being native residents: this reflects the local authorities’ favorable attitude towards foreign investors and individuals from different races and cultures. If you specialize in finance, web development, IT technologies, or consulting, Dubai undoubtedly offers excellent business development opportunities. It is important to consider expenses, including cost of business license in Dubai or in the UAE, the cost of turnkey services, tax fees, etc.”
One-time and annual expenses uae business license cost
If you ordered a “turnkey” business setup in free economic zones, the cost of company registration falls under one-time expenses: approximately the same amount will need to be paid annually to renew the ability to conduct business.
In other cases, you can expect the following annual expenses:
- UAE business license cost: trade license* (the price depends on the initial cost, in Dubai it is 15,000 – 20,000 AED, in other Emirates the cost ranges from 2,500 to 15,000 AED);
- virtual office rental (from 9,500 to 20,000 AED per year) or physical office rental (from 42,000 AED per year) (the cost depends on the size of the premises, approximately – internet and utilities together with the connection deposit (depends on the type of premises, on average 80 m2 cost around 2,000 AED per month).
In FEZ, these expenses are supplemented by payment for extending the migration card and mailbox (about 900 AED per year). When registering a business in Dubai and Abu Dhabi, it will be necessary to maintain audit reports, so you will need to pay for the services of auditors (the price depends on the type of services). The cost of starting a business in Abu Dhabi is an important factor to consider when establishing a company in the UAE, as it can vary depending on the specific requirements and services needed.
*It is important to remember that the trade license issued to you expires after a year. You need to renew it on time, otherwise you may be fined from 100 to 1000 dirhams, and in some cases, the license may be revoked. We recommend starting the procedure 3-4 weeks before the expiration date. Renewing a license costs the same as the initial registration.
Ongoing Expenses
When calculating the cost of starting a business in Dubai, it is important to consider ongoing expenses as well. These include:
- taxes charged after reaching an annual income of 375,000 dirhams;
- salaries and social security for employees;
- accounting and legal services.
Taxes
After exceeding the threshold of 375,000 dirhams, you will have to pay the following taxes:
- value added tax (VAT) at a rate of 5% – it was introduced in 2018;
- corporate income tax, which is 9% – was introduced in 2023.
The types of taxes also depend on the nature of the business.For example, certain types of activities may be exempt from VAT. And when selling and producing “harmful goods” such as sweetened carbonated drinks, energy drinks, tobacco products, electronic cigarettes – excise taxes (indirect taxes) of 50-100% are provided. Additionally, all commercial goods, except those imported by charitable organizations and government agencies, are subject to customs duties of 5% of the value.
Salaries
The minimum salary in the UAE is $1,250. For programmer services, you will need to spend from $5,000. In addition to salary, you will need to make contributions for medical insurance, which is mandatory and paid annually in the amount of approximately 2,500 dirhams. Within the framework of social security standards for employees, you will also need to consider expenses for a residence visa, education subsidy for children, housing compensation, etc. If it is assumed that native residents will work in the company, you will need to deduct pension and social contributions for them in the amount of 12.5% of the salary.
Accounting services
It is important to remember that accounting services play a key role in the success of a business. Specialists in this field monitor compliance with legislation and prepare reports in accordance with the requirements of the UAE tax authorities. This is despite the fact that in free economic zones there are autonomous legal frameworks with their own rules. Thanks to their high competence, the specialists at Dynasty Business Adviser help submit reports on time, properly formatted, which allows companies to avoid unnecessary expenses on penalties.
Legal Services
In some matters, companies may need specialized assistance from legal consultants and notaries to process and certify documents, execute transactions, legalize documents, and open bank accounts. Regular assistance and audits from our specialists help avoid mistakes, increasing trust in your business from investors and partners.
How to reduce costs through operating a business in FEZs
The Emirates have free economic zones (FEZs), where registering a business allows you to receive tax benefits such as exemption from corporate tax, VAT and customs duties. These benefits can significantly reduce the cost of opening a company in Dubai free zone, for example, making it an attractive option for entrepreneurs looking to establish a business in the region. On this page, we have compiled a list of the best free economic zones in the UAE. They are ideal for startups, small and medium-sized enterprises, consulting and manufacturing companies, and IT corporations.
Examples of Free Economic Zones in Dubai:
- Dubai Multi Commodities Centre (DMCC).
- Dubai Silicon Oasis (DSO).
- Dubai International Financial Centre (DIFC).
- Jebel Ali Free Zone (JAFZA).
Additional Expenses
Now let’s consider what other services will require expenses, in addition to those listed above, after you open a company in the UAE, and the cost of these services.
- Residence visa. If you, your employees, or family members plan to stay in the UAE for a long-term or permanent period, you will need a residence visa in the UAE. The cost of this visa is approximately $2,400, and its validity period is 2 years.
- Registration fees. To develop your business, you will need to register a trade mark, which is necessary for identifying the company and protecting it from copying of trademarks. The cost of such registration, without the services of our specialists, is $1800.
- Certificate of tax residency. As we mentioned earlier, when reaching an annual income of 375,000 dirhams, you will need to pay VAT. To avoid double taxation, it is necessary to obtain a certificate of tax residency from the UAE. This official document is presented to the state of the country whose citizen is the investor. The cost of such a certificate for legal entities is $5,000.
- Document legalization. This procedure involves translating official documents obtained in another country into Arabic or English.Its complexity lies in the passage of several stages of certification in various departments. Its complexity lies in the passage of several stages of certification in various departments. It is very important to seek qualified help in this matter – only in this case can you obtain a positive decision in the shortest possible time. The cost of legalization can be learned through individual consultation.
- Notary services. Some business-related issues (financial, legal) can be delegated to qualified personnel through the preparation of a general or personal power of attorney. This will free you from the need for personal presence at transactions, routine tasks, and allow you to allocate time for other important matters. The cost of the service is approximately 1,600 AED.
Depending on the specifics of your business, you should also consider possible expenses for equipment and inventory, logistics and transportation, marketing services, and advertising.
Conclusion
Despite the apparent complexities, conducting business in Dubai and other Emirates is significantly more advantageous in terms of conditions than in any other country. The information presented above will help you get oriented on what expenses to anticipate to avoid unpleasant surprises. To accurately calculate how much it costs to open a company in the UAE and subsequently run a successful business, please contact us for professional assistance.
Our company’s certified specialists have expertise in law and international planning. They will help you successfully navigate the steps of company registration, including, for example, advising on the Dubai LLC company registration cost, and advise on how to do it most profitably. We are genuinely interested in the successful completion of this stage, so that you can continue to collaborate with us under our full legal and accounting support.
