Dubai is a thriving business hub and a popular destination amongst entrepreneurs seeking to set up a company or expand their business. However, one of the crucial aspects of starting a business in Dubai is the cost involved. Understanding the various costs associated with setting up a company can help investors and entrepreneurs plan their budget beforehand and make informed decisions.

Firstly, it is important to note that the cost required to set up a company can vary depending on the type of business entity you choose. Dubai offers several options for company formation, including free zone companies, mainland companies and offshore companies. Each of these entities has different requirements, fees, and total costs associated with their formation.

Free zone companies are popular among entrepreneurs due to the attractive tax incentives, 100% foreign ownership, and no requirement of a local sponsor. However, the cost of setting up a free zone company can be relatively high compared to other types of entities. Currently, cost can range from AED 15,000 to AED 50,000, depending on the type of business activity and the selected free zone.

Offshore companies, on the other hand, are commonly used for holding assets and investments. The cost of setting up an offshore company is significantly lower than a free zone or mainland company. The registration fee for an offshore company can range from AED 7,000 to AED 20,000, depending on the offshore jurisdiction you have selected.

Mainland companies are the most common type of business entity in Dubai, and the cost of setting up a mainland company can vary depending on the nature of the business activity, the size of the company, and the chosen location. The cost of setting up a mainland company in Dubai can range from AED 10,000 to AED 50,000, excluding the cost of a local sponsor, which is a mandatory requirement for mainland companies.

Moreover, the cost of setting up a company in Dubai also includes other expenses, such as visa fees, office space rental, and employee salaries. A business owner from a foreign country is required to obtain a residency visa and a work permit to operate a company in Dubai. The cost of a residency visa can range from AED 3,000 to AED 8,000 per person, depending on the type of visa and the duration of stay. The cost of a work permit can range from AED 2,000 to AED 5,000 per person, depending on the type of permit and the duration of stay.

The cost of office space rental in Dubai can vary significantly depending on the location and the size of the office. The cost of office space rental in Dubai can range from AED 50,000 to AED 200,000 per year, depending on your requirement.

Employee salaries are also a significant cost factor to keep in mind while setting up your business. The minimum wage in Dubai is AED 2,500 per month, and employers are required to provide health insurance, end-of-service benefits, and annual leave to their employees.

One of the reasons behind the high cost is the administrative fees and government charges. With the increasing number of companies opening and expanding to Dubai, the government of Dubai has implemented several regulations and requirements to ensure that businesses operate in a transparent and legal manner. Therefore, there are several administrative fees and government charges that business owners are required to pay while setting up their company. These fees include visa fees, trade licence fees, registration fees, and municipality fees.

Another reason for the high cost of setting up a company in Dubai is the cost of living. Dubai is known for its luxurious lifestyle and high life. The cost of living in Dubai can be relatively high compared to other cities in the world. Therefore, business owners must consider the cost of living when planning to set up their business..

If you feel the need to hire a management consultancy in Dubai due to the long and slightly complicated process of business setup, then our business consultants at TVG can assist you every step of the way. You manage your business proceedings while we take care of the procedures for you. What’s better? Instead of paying a fee at every step to the government, you will just have to pay us a one-time fee, and voila! Your business will be officially registered in just a few days.