Dubai might be best known for its high-end lifestyle, but it’s also one of the best cities in the world in which to set up a low-cost business. Whether you’re a freelancer, solopreneur or founder, Dubai offers plenty of opportunities for success thanks to its booming economy, generous tax environment and cost-effective business setup options.
Benefits of starting a low-cost business in Dubai
Setting up a business usually requires a significant amount of upfront capital, but in Dubai, this obstacle is practically eliminated thanks to a string of government-backed incentives, initiatives and programmes designed to help entrepreneurs build a business from scratch with as little as possible. Some of the most significant benefits of starting a low-cost business in Dubai include:
Access to cost-effective free zone business setup structures
Dubai is home to dozens of free zones, each offering affordable business setup packages that usually include licenses, office space and visas. Some free zones offer flexi and virtual workspaces too, allowing founders to save on the overhead costs of rent and leases.
Tax allowances
Dubai boasts one of the most competitive tax regimes in the world, allowing entrepreneurs to boost the bottom line and carve out more profit from their costs. Currently, business owners can enjoy 0% personal income tax, 0% capital gains tax and low corporate tax rates that only kick in for earnings over AED 375,000.
Simplified business setup
For many, the biggest hurdle beyond capital is red tape and bureaucracy. But Dubai offers a streamlined business setup process that makes it easier for entrepreneurs to set up their dream businesses. Founders who decide to partner with business setup consultancies like Set Hub can benefit from years of expertise to make the process even swifter too.
First-rate digital infrastructure
Dubai boasts world-class digital connectivity, with high internet penetration, advanced digital systems and smart city initiatives that make it easier for businesses to run online, helping to cut out costs associated with physical setups.
Strong government support
The UAE is keen to position itself as a regional powerhouse for innovation and has nurtured an ecosystem designed to support startups and SMEs through dedicated programmes that provide financial grants and low-interest loans, accelerator programmes, grants and fee waivers, and strong regulatory support. This goes a long way in removing some of the typical barriers entrepreneurs with limited capital often face.
Comparing Free Zones and Mainland for low-cost business in Dubai
Free zones and mainland company setups are the two most popular options for entrepreneurs in Dubai. Both have their benefits, but free zones tend to be better suited for budget-conscious entrepreneurs.
Why?
Free zones offer benefits like 100% foreign ownership, 0% personal income tax and cost-effective setup packages that include business licenses, office spaces and visas rolled into one affordable price. Plus, free zone setup is usually faster than mainland setup, making it easier to start operations sooner.
On the other hand, setting up a business in the mainland gives you the option of trading directly with the UAE market, but usually at a higher cost. Most require physical office space and higher license fees, making it a less ideal option.
Guide to registering a low-cost business in Dubai: Step-by-step
Here’s a quick five-step guide to registering a low-cost business in Dubai for entrepreneurs looking to keep costs low from the start:
Step 1: Choose your business activity and structure
The nature of your business, be it trading, consulting or service, will determine the type of license and structure you’ll need, which will impact costs. Take time to consider this carefully and consult a reputable business setup consultancy like Set Hub if you are unsure.
Step 2: Choose a jurisdiction
As we have already discussed, free zones tend to be more affordable than mainland options. If you do want to go down the free zone routes, research the best option for your needs and your industry, since many specialise in sectors such as tech and HR.
Step 3: Register your business
You will need to reserve a business name to move ahead with the setup process. Make sure it complies with UAE naming regulations, with no abbreviations or offensive language. Keep it relevant and professional.
Step 4: Apply for your license
All businesses require a license to operate legally in the UAE, and these vary depending on the type. Ensure you have selected the correct activities in your application form and provide all the necessary supporting documents, such as passport copies and business plans to avoid unnecessary delays and costs.
Step 5: Get your license and launch your business
Once you receive your license, you can open a corporate bank account, apply for visas and start marketing your businesses. Remember, many business setup consultancies like Set Hub also offer post-launch services like recruitment services and e-commerce onboarding.
Low-cost business ideas in Dubai
If you know you want to launch a business in Dubai but haven’t nailed down exactly what this looks like, here are three low-cost business ideas to inspire you to get started.
Digital marketing consultancy
Dubai boasts a booming startup scene with thousands of small businesses launching every year. These businesses will be on the lookout for freelance and digital marketing services like social media management, SEO, content creation and paid advertising with minimal upfront investment. These businesses often prefer hiring freelancers to save on agency fees, making this a potentially lucrative and easily scalable business proposition.
E-commerce store
Dubai is a digital-first economy and boasts one of the highest internet penetration levels in the world. Plus, its strategic location and excellent logistics infrastructure make it ideal for trading internationally. The options here are endless, from niche artisan products to jewellery. There are plenty of platforms like Shopify and WooCommerce that allow you to set up an online store with minimal technical knowledge and low costs.
Consulting
A broad one, but an excellent option if you have expertise in any professional field, like business development or finance. This type of business requires minimal investment, as there is no requirement for physical assets. Flexible hours and remote work options make it easy to fit and scale around other commitments too.
Why work with Set Hub for low-cost business setup in Dubai
At Set Hub, we offer simple and stress-free low-cost business setup in Dubai. We can support your journey right from the beginning with a comprehensive suite of services that includes everything from company formation and visa applications to bank account setup and corporate tax registration. Once you’re all set up, we also offer post-launch services like HR and e-commerce onboarding support. Partner with Set Hub and discover how to build a low-cost business in Dubai that thrives. Contact us today to learn more.
