If you have ever tried setting up a company in Dubai or anywhere in the UAE, you would have received different quotations, and some of them would have been extremely high, while others would have been extremely low. It is likely that you may be confused as to how it is possible that the cost of company setup differs so much. Now, keep in mind that we are not referring to consultant fees (the fees that your consultant would be charging you). In fact, we are talking about the actual company setup fees that the UAE government charges all new companies.
Cost-Saving Strategies for Establishing a Business
In this blog, SetHub will outline the actual cost of establishing business in Dubai, along with some strategies for establishing a business in Dubai, so keep reading to find out more.
How to Estimate the Cost of Company Setup in Dubai
In order to effectively estimate the cost of setting up a company in Dubai, you need to understand the major factors and various expenses that are involved in the company setup process. The following are required when it comes to establishing business in Dubai:
- Business license
- Registered address for the company
- Visa
- Status change (If required)
- Immigration card (also known as the establishment card)
- Miscellaneous expenses like medical checkups, biometrics, etc.
Let us now get into each one of these points in detail. The first thing required for a company setup is the company license. A license is required to start a company in Dubai. To register a company, your company also needs to have an address in the UAE. The cost of obtaining a license, along with the office address, differs from emirate to emirate and from free zone to free zone.
To give you some context, the cheapest license fees along with an office address located in Dubai are around 12,500 AED. The license fees for a mainland entity or for setups in free zones like JAFZA, DAFZA, or Dubai Internet City would be even higher. However, if you’re looking for a low-cost setup, you can explore free zones like SHAMS or RAK, which are located outside Dubai and take around one hour to reach from Dubai. The license cost for these free zones is only about 6,000 AED.
Once you have the license, you need to apply for a UAE residence visa as well. You might be wondering if you even need a residence visa and whether you could just travel to the UAE on a tourist visa. Let me tell you one thing very clearly: to open a bank account anywhere in the UAE, you need a residence visa. If nobody in the company has a residence visa, the bank will not open a bank account for the company.
For this purpose, having a residence visa is mandatory. Many people travel to the UAE on a tourist visa, open a company, and then try to get the visa converted to a residence visa. However, this is not the correct way to do it because the UAE government charges high fees for converting a tourist visa to a residence visa. This process is called a status change, and the cost of a status change is around 1,500 AED.
It’s recommended to initiate the company setup and residence visa process from your home country rather than traveling to the UAE and initiating the process there. In fact, many people, instead of paying the status change fee of 1,500 AED, prefer to return to their home country and come back to the UAE. This is often cheaper than paying for the status change.
Irrespective of whether you apply from the UAE or outside, your company also needs to apply for an immigration card from the immigration department. This is sometimes called the establishment card and is required to start issuing visas, which also involves additional costs.
Apart from these, there are certain miscellaneous costs, such as medical checkups and biometrics for visa holders. To sum it up, the total cost for setting up a company in a free zone in Dubai with at least one visa comes to a minimum of 20,500 AED. However, if you set up in other emirates or free zones an hour away from Dubai, the cost is around 12,000 AED.
If you’re planning to set up a company in premium free zones like DAFZA, JAFZA, or DMCC, the cost will be higher. For mainland setups or premium free zones, the cost starts at approximately 25,000 AED. You can’t go ahead with just any type of company setup. Various cost-saving strategies for establishing a business in Dubai need to be considered before finalizing which free zone is best for your needs.
How to Save on Costs and Time
If you are an entrepreneur who seeks to enter the Dubai market with a new business idea, the two most important things you need to consider are the costs associated with setting up a company here and the time it will take to get up and running and recover your investment.
This is where SetHub, the preferred business setup consultant in the UAE, can assist you. We have several packages on offer that can be tailored or customized to your business requirements. From the initial setup phase to ensuring that you stay compliant with the laws of the UAE well into the future, our promise is that we will be with you every step of the way.
By working with SetHub, you don’t even need to be physically present in Dubai to get the process going. We take care of all the red tape and formalities for you, ensuring that your business setup process is as efficient as possible.
If this seems like an option you would like to explore, schedule a call with us now and hear back within just an hour. Our experts will analyze your requirements and present you with the best course of action so that you can start your story today!
