Introduction

Starting a business in the United Arab Emirates (UAE) is one of the most attractive options for entrepreneurs and investors from around the world. Whether you are planning to open a small startup, a trading company, or a branch of an international brand, the UAE offers excellent infrastructure, global connectivity, and a business-friendly environment.

But before you dive into the exciting opportunities, the first question that comes to mind is: What is the cost of starting a business in UAE?

This article will break down every factor — from license fees, office space, visas, and government charges — so you can calculate your budget clearly. We’ll also explore cost differences between free zones vs mainland setups, hidden expenses, and tips to save money when starting your business in the UAE.

Why Start a Business in the UAE?

• Tax Benefits: Corporate tax is competitive, and there is no personal income tax.

• Strategic Location: Gateway to the Middle East, Asia, and Africa.

• Strong Economy: Diversified economy with opportunities in trade, technology, logistics, and finance.

• Global Hub: Dubai and Abu Dhabi are international business and tourism centers.

• Ease of Doing Business: Streamlined company registration and digital services.

Factors That Affect the Cost of Starting a Business in UAE

The total cost of starting a business in UAE depends on multiple elements. Let’s break them down:

1. Type of Business License

Your business license is the first major cost. There are three main types:

• Commercial License (for trading, retail, imports, and exports)

• Professional License (for services, consultancy, IT, legal, etc.)

• Industrial License (for manufacturing and production)

Average Cost: AED 10,000 – AED 20,000

2. Mainland vs Free Zone Setup

• Mainland Company: Allows you to operate anywhere in the UAE and internationally.

• Free Zone Company: Offers full ownership (100% foreign ownership) and tax benefits but limits your operations within the free zone or internationally.

 Free Zone License Cost: AED 6,000 – AED 15,000 (depending on zone)
 Mainland License Cost: AED 15,000 – AED 30,000 (depending on activity)

3. Office Space Costs

• Free Zone Flexi Desk: AED 5,000 – AED 10,000 annually

• Dedicated Office (Mainland/Free Zone): AED 20,000 – AED 60,000 annually

• Virtual Office Options: AED 3,000 – AED 5,000 (limited use)

4. Visa Costs

Every investor and employee requires a residence visa. Costs include medical tests, Emirates ID, and stamping.

• Investor/Partner Visa: AED 4,000 – AED 6,000

• Employment Visa: AED 3,000 – AED 5,000 per person

5. Government Fees

• Trade Name Registration: AED 600 – AED 1,000

• Initial Approval: AED 1,000 – AED 2,000

• Memorandum of Association (MOA): AED 2,000 – AED 5,000

• Notary & Legal Fees: AED 1,000 – AED 3,000

6. Bank Account Setup

Most banks require a minimum deposit.

• Minimum Balance Requirement: AED 5,000 – AED 50,000 (depends on the bank and type of account)

7. Additional Costs

• Website & Digital Marketing: AED 5,000 – AED 15,000

• Auditing & Accounting: AED 5,000 – AED 12,000 yearly

• Insurance: AED 1,000 – AED 5,000 depending on coverage

Estimated Total Cost of Starting a Business in UAE

 On average, the cost of starting a business in UAE ranges between AED 20,000 to AED 100,000, depending on your structure and activity.

Free Zones with Affordable Costs in UAE

If you’re looking for budget-friendly options, some free zones are well-known for their low setup fees:

• Sharjah Media City (Shams)

• Fujairah Creative City

• Ajman Free Zone

• RAK Free Zone

• Dubai Silicon Oasis (DSO)

Tips to Reduce the Cost of Starting a Business in UAE

1. Choose a free zone flexi-desk instead of a large office.

2. Start with a single license activity before expanding.

3. Use outsourced PRO services instead of hiring full-time staff.

4. Compare free zone offers – some provide packages including visa, office, and license.

5. Avoid unnecessary expenses in the first year like luxury offices.

Common Mistakes to Avoid

• Not understanding the difference between mainland and free zone.

• Choosing the wrong license category.

• Ignoring annual renewal fees.

• Underestimating visa and compliance costs.

• Not seeking professional business setup advice.

Conclusion

The cost of starting a business in UAE can vary widely depending on whether you choose a mainland or free zone setup, your business activity, and the scale of operations. For entrepreneurs looking for budget-friendly options, free zones offer affordable packages, while mainland setups provide wider flexibility.

When planning your investment, always calculate the total cost of starting a business in UAE by including license fees, visas, office space, and annual renewals. This ensures you avoid hidden expenses and build a clear financial roadmap.

Ultimately, the cost of starting a business in UAE is not just an expense but an investment into one of the fastest-growing and globally connected economies in the world. With the right strategy and planning, it can open doors to unlimited opportunities.

FAQs About the Cost of Starting a Business in UAE

1. What is the minimum cost of starting a business in UAE?
   – Around AED 15,000 in a low-cost free zone.

2. Is UAE expensive for startups?
   – Not necessarily. Free zones offer affordable packages for small businesses.

3. Which is cheaper: free zone or mainland setup?
   – Free zones are generally more affordable than mainland setups.

4. Do I need an office to start a business in UAE?
   – In free zones, flexi-desk or virtual offices are acceptable. Mainland may require office space.

5. How much does a business license cost in UAE?
   – AED 6,000 – AED 20,000 depending on type and location.

6. Are there hidden costs in UAE company formation?
   – Yes, like visa renewals, insurance, auditing, and government approvals.

7. Do I need a local sponsor in UAE?
   – Only for some mainland businesses. Free zones allow 100% ownership.

8. What are visa costs in UAE for business setup?
   – Investor visa costs AED 4,000 – AED 6,000; employee visas AED 3,000 – AED 5,000.

9. Do I pay corporate tax in UAE?
   – Yes, but corporate tax is only on profits above AED 375,000 (from June 2023).

10. Can I start a business in UAE without being physically present?
    – Yes, many free zones allow remote registration.

11. How much is the renewal fee for a business license?
    – Typically AED 8,000 – AED 15,000 annually.

12. Which free zone is cheapest in UAE?
    – Sharjah Media City (Shams) and Ajman Free Zone are among the cheapest.

13. Do I need a bank account to operate in UAE?
    – Yes, and most banks require a minimum balance of AED 5,000 – AED 50,000.

14. How long does it take to start a business in UAE?
    – Usually 1–2 weeks for free zones, and 2–4 weeks for mainland companies.

15. Is it  cost of starting a business in UAE in 2025?
    – Absolutely. The UAE continues to grow as a global business hub with strong opportunities.