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Expenses to consider for setting up a company in the Dubai mainland

Cost is one major component to consider if youu2019re planning on setting up your own company in Dubai.<br>Many expatriates come to Dubai following their dreams and to have better lives. Whether youu2019ve just moved or you have been here for years and you want to venture out into the business world, then there are many factors worth considering before you decide to start your own company.<br>

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Expenses to consider for setting up a company in the Dubai mainland

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  1. Dubai Company Formation Cost Cost is one major component to consider if you’re planning on setting up your own company in Dubai. Many expatriates come to Dubai following their dreams and to have better lives. Whether you’ve just moved or you have been here for years and you want to venture out into the business world, then there are many factors worth considering before you decide to start your own company. The preliminary costs are the major deciding factors whether you’ll be able to take on onto this new challenge. To make it easy for you, we have put together ​Dubai company formation costs you’ll have to add to your overall expenses. Do keep in mind that the fees mentioned below are only an approximation and gives you an idea. The costs also will vary a lot depending on many factors, including the type of company, the business itself, its location and the overall needs of the business. There are always some extra small fees that will ultimately add up. For a ​Limited Liability Company A ​limited liability company ​can be formed with a minimum of two and a maximum of 50 persons whose liability is restricted to their shares in the company's investment. Foreign equities in the company may not exceed beyond 49%, which means that you will need a local partner who has a major stake in the company. Share Capital Normally, the stated capital is AED 300,000. However, this is not required to be deposited in a bank account during or after the licensing process and hence is not an actual cash outflow. Instant License or Initial approval from DED One-time cost: Will be approximately AED 110

  2. To open a business here, start by getting an instant license from the DED. It allows you to kick start your business operations right away, and with 120 days to complete all your other documentation and formalities. Trade name approvals One-time cost: Will be approximately: AED 700-900 (AED 2,000 – 3,000 for non Arabic names) You will need to get approval for the name that you have chosen for your venture. The cost might change slightly based on the name you have chosen. There are several fees to be paid for this and that includes commercial name fees, reservation fees, foreign company name fees, etc. Office rent It is obligatory to have an office space to set up your company. This is to ensure that it is a legal business as it allows the authorities to do the necessary inspections, monitor the operations and validate that immigration laws are being followed. Yearly/ Termly cost – Ranges from AED 10,000 for a virtual desk space, to AED 25,000 onwards for a business centre office. Bespoke office spaces also come in core-and-shell, where interior fit-out works would have to be undertaken. The costs for these spaces depend on the location of the office. Reasonable office space would cost you at least AED 35,000, with basic fit-out costs starting from AED 100 per square foot. UAE National Sponsor/Service Agent Every LLC in Dubai has to appoint a UAE National who holds 51% of the company.In most cases, the UAE National acts as a sponsor and does not actively participate in the business. For services rendered, he is paid an annual fee, that ranges from AED 10,000 for lower-profile companies and startups, to AED 100,000+ for big industries that involve hundreds of workers. Documentation Translation of Memorandum of Association (MOA) One-time cost: Will be approximate: AED 500

  3. The Memorandum of Association is the governing document of the company.The document has to be in Arabic since Arabic is the official language of the UAE. However, most companies prefer the English/Arabic dual-language MOA, that makes it easier for both the UAE National and the foreign partner to legally understand the contents of the document. Notarisation of the MOA in the Dubai Courts One-time cost: Will be approximately: AED 1,000 to 2,000 for the agreement + Dhs 300 for typing The contract of an LLC is drafted with the mutual consent of the partners. The contract also needs to be drafted in both Arabic and English, so there might be an additional cost incurred for the translation. All partners or their attorneys will have to go to sign the Court Agreement Attestation at the court. Trade license Annual cost: Will be approximate: Dhs 15,000 There are many components of this fee, including a market fee component which is calculated as 2.5% of the annual rental of your office space. For example, if you rent an office at AED 50,000 per annum, the market fee added on the trade license invoice would be AED 1,250. An office or a shop will pay 5% whereas a warehouse will pay around 20%. Tejari or Commercial License fee Yearly cost: Will be approximate: Dhs 700 This fee must be paid annually for the business to conduct commercial activities throughout the year. Fees for Chamber of Commerce Yearly cost: Will be approximate: Dhs 1200 The cost for a general trading company will vary from an industrial or a manufacturing company. Commercial services improvement fee Yearly cost: Will be approximate: Dhs 400

  4. This fee is meant for the improvement works that the government departments do. Public waste municipality fee and Administrative services fee One-time cost: Will be approximate: Dhs 50 + Dhs 1000 for waste Administrative fees are charged for both the paperwork carried out by the department and towards the public waste fee. Ministry of Economy Fees One-time cost: Will be approximate: AED 1,000 Other expenses The other miscellaneous expenses incurred include making a Company Stamp – AED 100 And applying for a P.O. Box– AED 1,000 per annum for basic services. Both are essential in doing business in Dubai. Labour and Immigration Cards The newly-formed company will have to register with the Ministry of Immigration (for investor visas) and the Ministry of Labour (for the employee visas). This is a recurring cost. Ministries of Immigration and Labour – AED 8,700 Visas There are two broad categories of visas – investor visas and employee visas.Investor visa costs range from AED 2,100 (if the investor is outside the UAE) to AED 3,300 (issued if the investor is already in the UAE).Employment visa costs depend on the category of the company, and whether the employee is inside, or outside the UAE. Costs range from AED 5,700 to AED 7,000.An additional cost incurred will be for insurance of the employees, and costs start from AED 1,500 for basic insurance.

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