Dubai is called as the financial hub of United Arab Emirates, due to its strategical location, international business environment, Multiple tax benefits. These benefits makes Dubai a important gateway to markets across the Middle East, Africa, Asia and Europe. So many benefits for entrepreneurs from diverse industries are provided by the government of Dubai on regular basis, from launch a brand to setting up a management head office, Dubai has learned from there years of experience and always ready to implement new changes which are beneficial of the businesses to operate conveniently.
However, many times one of the first very important questions investors & owners of companies ask is: How much does it cost to set up a company in Dubai?
In situations where client first question is “How much does it cost to set up a company in Dubai?” We as a corporate service provider based in Dubai, suggest client, cost is the most important factor because, costing for incorporation can vary due to multiple factors like nature of business as many business activities are standalone activity which can’t be combined with any other activities, some times many activities require external approvals from certain government authorities due to nature of the business activity, which can also change the cost of the proposal, even some times adding corporate shareholders in the company increase the cost because there documents need to be attested from Ministry of Foreign Affairs (MOFA) and the ambassy. There can’t be a realistic budget which can be confirmed till a CSP don’t get all required details from client, including jurisdiction, number of visas, office requirement and additional approvals.
There a general market point of view, we are providing charges of government for incorporation including 1 visa for the shareholder of the company.
In Mainland Jurisdiction incorporation of company with one visa for investor will start from AED 17,000 or USD 4,600, and depending on the requirement cost can vary. This cost doesn’t include any charges for approval from external authorities.
In case of Freezones, the process is very different, now as there are more than 20 free zones in Dubai including few names like DMCC, DIFC, JAFZA, DAFZ, IFZA, Dubai South, Dubai Internet City and Meydan Free Zone. These all freezones have their own charges which are specified by their specific authorities who have taken charge for day to day take care of that free zone, not like a fixed government tariffs.
For example Meydan Free Zone currently advertises company formation from AED 12,500, including a license and flexi-desk arrangement, while IFZA freezone market there one visa package including License, flexi desk and visa charges for AED 14,900. DMCC on the other hand states that its initial setup costs can range from AED 34,500 to AED 84,515, depending on factors such as license duration, office facilities and the selected package.
What Determines the Cost of Setting Up a Company in Dubai?
Honestly, there is not only one single factor, there are multiple factors, which need to be considered to bring the best tailored solution for investor and entrepreneurs so that they can start there business journey in Dubai smoothly.
1. Mainland or Free Trade Zone Jurisdiction
- Many times deciding a jurisdiction for business is so complicated, as client feels they are getting certain benefits from setting up company in Mainland but there are also few benefits if they setup company in Freezones. Now but this decision can only be made once all the legal and tax related factors are considered. As there are few slogans and points which had and still are advertised by some private companies, which sound very interesting but are not including complete information. So, that is why before finding a correct jurisdiction, find a knowledgeable business incorporation consultant who helps to choose the correct jurisdiction.
- There are certain benefits which are similar in mainland and freezones like for almost 90% of the business activities allow 100 per cent foreign ownership, although certain strategic or specially regulated activities may still be subject to additional conditions.
- But one major difference which makes a difference in process of incorporation, timeline and requirements of documents is mainland company is licensed by Dubai’s Department of Economy and Tourism. It is generally suitable for businesses that want to trade directly throughout Dubai and the wider UAE market. Free-zones on the other hand, have a completely different way to processing. Companies’ registration cost, process, office and legal requirements depend on which specific freezone in Dubai is shortlisted for the setup of company. Dubai has numerous free zones serving industries such as commodities, media, technology, logistics, finance, healthcare, design and professional services, which means for every freezone there is a separate authority allocated by the government of UAE.
2. Business Activities and License Type
The required business activity controls the selection of license category, required approvals and permitted operations.
Common license categories include:
- Commercial or trading licenses: A commercial license is now from few years in Dubai considered as a very Broder license category in mainland and freezones both because now not just trading and product related companies prefer commercial license, even services bases companies can opt for commercial license.
- Professional or service licenses: Usually a perfect solution for companies who prefer to provide services and consultancy to client from any industry.
- Industrial licenses: Dubai in last 2 decades has became hub for serious investors and manufacturers, where authorities provide top a grade infrastructure as well as lot of tax benefits to increase the interest of foreign companies to invest more in Dubai with a long duration plan.
- Tourism licenses: Dubai has prove itself globally as the first choice for travel and tourism, so that’s why in 10 years a lot of travel and tourism related professional companies have start there business venture in Dubai and Dubai’s Department of Economy and Tourism as well as freezone authorities provide tourism related business licenses, so that companies can legally provide all services.
- Freelance permits: It allows an individual to operate as a sole professional instead of as an a entity. Basically issued on a personal name on the passport.
In Dubai a freelancer can provide multiple services like Marketing and social media Graphic and web design, Market analysis, Technology and software development, Writing, editing and content creation Photography and media production, Education and e-learning consultancy.
Currently in Dubai Tecmo’s freezone there is a program name Go Freelance, through which any professional can get a Freelance permit.
3. What are the common documents required to setup a company in Dubai?
- Certified Passport valid for at least six months
- Recent passport size photograph
- Self-declaration or NOC, if required
- Educational or professional qualifications for certain activities
- Portfolio or evidence of professional experience, where requested
- UAE mobile number for the residence visa application
- Valid medical insurance either issued in Dubai or if international then should cover Dubai
4. How to Reduce the Cost of Company Formation in Dubai?
A misconception in Dubai, that is faced by many investors is a most economical license issued by one jurisdiction will have exact same advantages like another license issued by different jurisdiction. It completely depends on the nature of business, business model, office requirements, tax benefits. For example, a trading company in Mainland Dubai and another trading company in Jabel Ali freezone, are from same industries, serving similar types of clients based abroad as well as even there turnover is similar, still a company based in JAFZA freezone will get much more tax benefits as compare to mainland company, if they follow all requirements.
5. Why Choose OneHub Partners an entity in Dubai?
OneHub Partners understand that every business is different and require high level expertise to ensure the complete process is the up-to-date and fully compliant. They focus on company law compliance, board procedures, director responsibilities, shareholder relations, financial compliance and legal requirements. This allows business owners to manage their companies with ease while focusing on their core business operations.