The United Arab Emirates is one of the most thriving countries when it comes to business sectors. Thousands of foreign investors and entrepreneurs set up their companies in this country every year. However, some of them don’t know how much money is required to set up a company in the UAE.
In this article, you will learn how much money is really necessary to set up a business in this country. You should always keep in mind that there are many elements and additional costs to consider. Therefore, here you’ll find the information you need to know the exact amount of money that you need. Let’s observe:
- A brief overview of some reasons to set up a company in the UAE.
- What is the cost of setting up a new business in the UAE?
- How much can cost to set up a company in a free zone?
- How much can cost to set up a Limited Liability Company (LLC)?
- The real cost of setting up a branch office in the UAE.
- All costs you should be aware of during the business setup process.
- How can Connectfz help you to set up your new business in this country?
1. A brief overview of some reasons to set up a company in the UAE.
This country is very popular among local and foreign investors, but what is the reason behind it? Well then, you can find several reasons why the UAE is a successful business hub. Also, you will find even more reasons why you should consider setting up your company in this country.
Firstly, you should know that here you can choose between different options when selecting a jurisdiction, location, licenses, etc. However, you should also know how much money is required to set up a company in the UAE. But we’ll discover the cost of this process below; for now, let’s see some reasons to choose the UAE.
If you desire to set up your business in this favorable country, you’ll be able to get these benefits:
- You will be able to enjoy several beneficial tax policies to boost your business.
- There is a wide range of available options when it comes to business licenses, free zones, available legal entities, etc.
- All entrepreneurs and investors can have access to many different markets and potential consumers due to the strategic location.
- Also, they can have access to world-class infrastructure, facilities, and support services.
- In the UAE, it is also easier to find professional workers to hire as employees.
Besides, you will find many other benefits depending on the business location you choose in the UAE. However, it is now time to see how much money is required to set up a company in the UAE.
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2. What is the cost of setting up a new business in the UAE?
The cost of setting up a company in this country will vary depending on several fundamental factors. For example, it’ll mostly depend on the business location or jurisdiction, the chosen license, the nature of the business, etc. Other factors that may have a certain influence on the business setup cost are the facilities and the number of visas.
Besides, it is important to choose a reliable business setup partner that can offer reasonable business packages. Remember that having a partner by your side can also help you to complete the process and save money. Therefore, we recommend you to find and hire the services of an agency you can trust.
On the other hand, we will now take a look at the cost of setting a company in different situations. Firstly, we will see how much money is required to set up a company in the UAE free zones. After that, we will take a look at the cost of setting up a mainland company (Limited Liability Company).
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3. How much can cost to set up a company in a free zone?
The most popular option that most entrepreneurs and investors choose is setting up their companies in a free zone. Therefore, let’s first see what the cost of opening a company in Dubai Free Zone is. Firstly, remember that each free zone has different costs since not all of them have the same conditions.
Usually, the most expensive free zones are in Dubai, but that’s because you can find the best conditions there. However, you must also know that many elements can make the costs vary, including visas, licenses, facilities, packages, etc. Now, let’s take a look at a list of approximate free zone costs:
- Dubai Multi Commodities Centre (DMCC): AED 50,000.
- Dubai Airport Free Zone Authority (DAFZA): AED 50,000.
- Jebel Ali Free Zone Authority (JAFZA): AED 50,000.
- Dubai Silicon Oasis Authority (DSOA): AED 70,000.
- Dubai South Free Zone: AED 32,000.
- DMCFZ (Dubai Media City Free Zone): starting from AED 7,250.
As we mentioned before, these are only approximate costs of setting up a company in these free zones. All of them are in Dubai, but you can find many other excellent free zones in other emirates.
Here you can learn about the real cost of setting up a company in a free zone in Dubai.
4. How much can cost to set up a Limited Liability Company (LLC)?
If you do not desire to set up a free zone company, you can choose other excellent alternatives. For instance, another of the most popular types of company formation in the UAE is the LLC. An LLC (Limited Liability Company) is a type of legal entity that requires a minimum of 2 shareholders. It can accept a maximum of 50 shareholders.
This company formation option has more advantages than disadvantages for many entrepreneurs and investors that reside in the UAE. Nonetheless, it is important to know how much money is required to set up a company in the UAE. This type of company is also famous for being a bit more expensive than other legal entities.
Some of the elements that will be relevant in the LLC setup process are the following:
- The initial approval from the Department of Economic Development (DED).
- The required approval for your company’s trade name.
- Renting office space for your Limited Liability Company.
- The attestation of the MOA (Memorandum of Association).
- Drafting the contract of your LLC in both Arabic and English.
- Paying the Department of Economic Development (DED) fee.
- Paying the Mainland Trade License fee, which the DED fee includes.
- Other important fees like the commercial license fee, Dubai Chamber of Commerce fee, administrative services fee, commercial services improvement fee, etc.
- Other vital expenses, such as general trading company formation, contracting license, rented premises, and other additional charges.
4.1. What are the benefits of having a Limited Liability Company in the UAE?
If you have the necessary budget to set up an LLC, you should know about its benefits. For example, you can get these advantages by setting up an LLC in the UAE:
- With this type of company, you can protect your personal assets in case the company faces any legal issues.
- You will find no restrictions on the number of visas that you desire to obtain.
- If you want to run a real estate business, you will find no imposed restrictions on it.
- For LLCs, there’s an exemption from paying the standard 5 percent of customs duty on imported products and goods. Besides, there’s no local corporate tax.
- You can also avail investor’s visa if you have an LLC.
- It is not necessary to have a minimum share capital to set up an LLC.
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5. The real cost of setting up a branch office in the UAE.
Just like the previous cases, the cost of setting up a branch office can vary according to the location. Besides, the cost of setting up a branch office in Dubai involves a bank guarantee deposit, the bank fee, etc. Also, the Ministry of Economy applies a fine for each month the Dubai bank will take to open your account.
Usually, opening a corporate bank account takes an average timeframe of 5 weeks. Therefore, entrepreneurs should budget for a two months’ fine payable to the Ministry of Economy. As for the bank guarantee deposit, you won’t be able to use the money for a while. But it will be refunded to you once your branch is deregistered.
And lastly, owners of branch offices should also take into consideration the business license cost. Moreover, it is essential to renew that business license every year. The business license renewal is usually more costly if you compared it to a license for LLCs. Nonetheless, you can find more information about it with your partner to be sure.
Here you can learn about the process and requirements to open a corporate bank account in Dubai.
6. All costs you should be aware of during the business setup process.
According to the type of company formation you choose, you will need to cover several costs. That’s the main reason why you should know how much money is required to set up a company in the UAE. For instance, in order to set up a company in a free zone, you’ll need to cover these:
- Office rent per annum.
- Free zone business license per annum.
- Bank guarantee.
- Free zone business registration.
- Free zone visa and its renewal.
As for setting up a Mainland company, make sure to cover these costs:
- The trade name approval.
- The office rent.
- Preliminary approval of your license.
- The attestation of the Memorandum of Association (MOA).
- Court agreement attestation and drafting of the contract.
- Fees from the Ministry of Economy and the Chamber of Commerce.
- The trade license fee.
- Term cost or market fees per annum.
- Administrative services and Public Waste Municipality Fee.
If you choose to set up an offshore business in the UAE, you must cover these fees:
- The standard share capital that the offshore jurisdiction requires.
- The offshore business registration fee (it is yearly).
- Offshore registered office fee (annually).
- The offshore bank account opening fee (it is a one-time preliminary expense).
- Nominee services from directors, shareholders, or any other related nominees.
- The offshore business maintenance fee (annual fee).
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7. How can Connectfz help you to set up your new business in this country?
If you have made up your mind, you must make a plan to build your business in the UAE. Firstly, you must take into consideration all costs that we previously mentioned and be sure of your budget. After making sure of much money you have, you can start planning your type of business and its location.
However, you are not alone since you can have a business setup partner like Connectfz by your side. Our team can make sure you have a good start and development during your stay in the country. Besides, you will get the necessary guidance for completing the company setup process satisfactorily.
On the other hand, we can also be favorable for your company’s development after the business setup process. In other words, we offer high-quality support services, such as HR consultancy, payroll services, recruitment, staff outsourcing, and more. Feel free to get in touch with our team to obtain more information about our services.
Would you like to contact Connectfz to know more about the cost and the process of setting up a company in the UAE? If you have any questions, call us on +97143316688. You can email us at firstname.lastname@example.org, and you will talk to one of our representatives who will answer your questions.