UAE Business Setup Costs – A Clear Breakdown for Startup Founders
The UAE stands as an international attraction for ambitious businesspeople. It delivers a low-tax environment, world-class infrastructure, and a vibrant market ideally positioned between East and West. If you are a startup founder or a business owner seeking Dubai company formation, it usually comes with excitement, and so many questions about money.
The UAE business setup costs are popularly flexible, ranging from surprisingly cost-effective to remarkably premium. The key to successful budgeting lies in comprehending the distinction between two major choices – free zone and mainland company formation.
A Clear Breakdown of UAE Business Setup Costs
No matter whether you select Freezone or Mainland, there are four major cost classifications you should budget for. These figures are approximate, as expenses continuously change and differ significantly between distinct free zones and the mainland departments.
Business Setup Costs Explained
1. The Core Licensing and Registration Fees
The government authority (DED for Mainland or the pertinent Free Zone Authority) receives this cost as a principal component.
A. Trade Name Reservation – A minor one-time payment (around AED 600 – AED 2,000) to guarantee that your corporation’s name is distinct and sanctioned.
B. Initial Approval – One-time fee for the pre-approval of your activities and shareholder structure (approx. AED 1,000 – AED 3,000).
C. Business License Fee (Annual) – This is the largest recurring annual expenditure, and its amount depends solely on the category of activity you select (Professional, Commercial, or Industrial).
- Low-Cost Free Zone – Single-activity Professional/Service license (e.g., IFZA, Ajman Free Zone, RAKEZ) costs about AED 8,000 – AED 15,000.
- Premium Free Zone (e.g., DMCC, DIFC) – The price can start from AED 15,000 – AED 40,000+.
- Dubai Mainland (DED) – License cost usually falls between AED 15,000 and AED 30,000+.
2. Office Space and Infrastructure Costs
In the UAE, a physical or certified office address is compulsory to get a Business License in Dubai.
| Type | Location | Cost per Year (Approx.) | Notes |
| Flexi-Desk / Co-working | Free Zones Only | AED 5,000 – AED 15,000 | Provides a shared workstation and necessary Ejari/Tenancy contract to satisfy licensing rules. Perfect for a solo founder. |
| Dedicated Office (Small) | Free Zone | AED 20,000 – AED 50,000+ | A private, small office suitable for 2-4 employees. |
| Dedicated Office (Mandatory) | Dubai Mainland | AED 15,000 – AED 35,000+ | Mandatory physical office space and an Ejari registration are required. This cost significantly drives up the initial UAE startup budget. |
3. Visa and Immigration Costs
A residency visa will be required for you if you are a non-UAE resident and want to start your business. It is a large part of the cost to start a business in UAE.
- Establishment Card / E-Channel Registration – A one-off or yearly cost paid to the immigration department for registering your company as a unit that is able to sponsor visas (about AED 2,500 – AED 4,000).
- Investor / Partner Visa – Your personal residency visa that is often valid for 2 to 3 years.
- Visa Cost (3 Years) – Around AED 3,500 – AED 7,000 (This price includes the entry permit, medical test, Emirates ID, and visa stamping fees).
- Employee Visa – The charges for sponsoring an employee are almost the same (around AED 4,000 – AED 7,500 per person).
A lot of Free Zones have the “Zero Visa” deal available, where the basic license with a Flexi-desk is provided at the lowest price (e.g., starting from AED 8,000 – AED 10,000). You can always upgrade or add a visa later when you are ready to move or require one.
4. Professional and Ancillary Costs (The “Hidden” Fees)
These are expenses often not included in the basic license fee advertised by authorities. Neglecting these can blow your UAE business setup costs budget.
| Cost Component | Details | Estimated Cost (Approx.) | Recurring? |
| Consultancy Fee | Fee for the Best Business Setup Consultants in Dubai to handle all paperwork, notarization, and government liaison. | AED 4,000 – AED 10,000+ (Highly recommended for speed and accuracy). | No (Initial Setup) |
| MOA/AOA Drafting & Notarization | Drafting and attesting the legal documents (Memorandum/Articles of Association). | AED 1,000 – AED 4,000 | No |
| Corporate Bank Account | While opening is often free, most UAE banks require a minimum account balance to be maintained (e.g., AED 25,000 – AED 50,000), which is a working capital cost, not a fee. | N/A (Working Capital) | Yes |
| Corporate Tax Registration | Mandatory registration with the Federal Tax Authority (FTA) for the new 9% UAE Corporate Tax, which applies to net profits above AED 375,000. | AED 0 – AED 3,000 (Admin Fee, if using a consultant) | No |
Case Study Comparison – The First-Year Budget
Let’s look at two real methods for a solo tech founder forming a consultancy business, comparing the entire UAE company formation costs for the first year.
| Cost Component | Scenario A: Free Zone (Low-Cost) | Scenario B: Dubai Mainland (DED) |
| Trade Name & Initial Approval | AED 1,500 | AED 2,000 |
| Professional License Fee (Annual) | AED 12,000 | AED 18,000 |
| Office Space / Ejari | AED 6,000 (Flexi-Desk) | AED 20,000 (Small Office Rent + Ejari) |
| Establishment Card (Immigration) | AED 3,000 | AED 3,500 |
| Investor Visa (3-Year Cost) | AED 5,000 | AED 6,000 |
| Consultancy / PRO Fee | AED 5,000 | AED 7,000 |
| Total First-Year Cost (Approx.) | AED 32,500 | AED 56,500 |
| Monthly Operating Cost (License Only) | ~AED 2,700 | ~AED 4,700 |
The mainland formation (Scenario B) can effortlessly cost 70% to 100% more in the first year because of the compulsory physical office and higher government costs, outlining why the freezone company setup in UAE is the desired entry point for lean startups.
How to Minimize Your Initial Business Setup Expenses UAE
For a startup founder, every dirham that is not spent is a dirham that is put back into growth.
Here are some smart ideas to reduce your startup costs –
1. Be Strict with Visa Quotas
Start off with a zero-visa or one-visa package. Every additional visa quota (even if not used) incurs costs in terms of fees and establishment card capacity. Only apply for the investor visa when you are ready to move or if it is immediately needed.
2. Choose Activity Wisely
A General Trading License is flexible but usually one of the most costly licenses (approximately AED 15,000 – AED 25,000+ easily). If you intend to provide only consultancy or IT services, go for the much cheaper Professional License. You can always add other activities in the future.
3. Compare Free Zones by Location and Focus
- The Dubai Free Zones (DMCC, DIFC) have a high prestige value but charge a premium price for their services.
- The lower-cost free zones (Ajman, UAQ, RAKEZ) offer very good competitive packages, and their setup costs range from AED 6,000 to AED 10,000 for a basic license, making them the best choice for those starting a new business in the UAE on a tight budget.
- Specific Industry Zones (Dubai Media City, Dubai Internet City) also qualify as excellent locations for networking opportunities among industry professionals, though the cost of doing business in these locations will usually be higher.
4. Partner with the Best Business Setup Consultants in Dubai
Paid consultancy may be an upfront cost; however, hiring a consultant with extensive experience and a reputable track record may ultimately save you money due to their experience in –
1) Preventing Errors – By avoiding costly mistakes that could incur fines or necessitate re-filing your application.
2) Finding the Best Deals – They will know which Free Zone has the most competitively priced package based upon your specific business activity and visa requirements.
3) Facilitating the Bureaucracy – They will streamline the process for you, saving you valuable time, stress, and energy.
When hiring a consultant, check for openness in pricing. A transparent quote will show an itemized breakdown of government fees (separate from their consulting fees), which eliminates any surprises.
Strategic Spending is the Key
The adventure associated with starting a business in either the mainland of Dubai or one of the many available free zone options across the United Arab Emirates offers multiple avenues of opportunity. While the overall UAE business setup costs may initially seem high, businesses working with Start Any Business India quickly realise that the time, money, and resources invested in the UAE market deliver an excellent Return on Investment (ROI).
When navigating UAE business setup costs, it is important to understand that choosing the lowest-priced option does not always provide the best value for your specific business model. Start Any Business India advises lean startups to consider free zones offering Flexi-desk facilities along with a Professional License as a smart and cost-effective strategic choice.
With expert guidance from Start Any Business India, once you clearly understand your individual startup expenses—including licensing, office space, visa, and professional fees—you can confidently plan your budget and build a strong foundation for launching your company in one of the world’s fastest-growing economic hubs.
Also Read: UAE PASS Explained – Why Every Resident and Business Owner Needs It
