2 - Understanding Free Zones vs. Mainland Setups

Before diving into costs, let’s cover one key question: Should you open your company in a Free Zone or in Mainland? These are two completely different business set-ups, with the main difference being that Mainland is directly controlled by the UAE Government while Free Zones are set up by individual authorities operating under the UAE jurisdiction. Here’s some of the key differences:

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Free Zones:

- Offer 100% foreign ownership (no need for a local partner).

- Provide tax benefits such as no customs duties for imports/exports.

- Typically, Free Zones focus on certain industries (e.g., Dubai Internet City for tech).

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Restrictions: Most Free Zone companies cannot trade directly with the Dubai mainland unless a local distributor is appointed.

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‍Mainland Companies:

- Allow you to trade freely in the UAE without restrictions.

- Ideal if your business targets local customers (e.g., restaurants, retail stores, or consulting).

- Some types of businesses require you to have either a local agent or a UAE national sponsor.

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The structure you choose will significantly affect your costs, so weigh your options carefully. We have written a comprehensive guide comparing the 2 options, which you can read here.

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You can learn more about Free Zones in the UAE in the official government website here or about incorporating a company in Mainland here.

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3 - How much it costs to open a Business in Dubai

Starting a business in Dubai involves multiple layers of expenses. Below, we’ll break them into key categories for clarity. Keep in mind, that when creating your business, you will need to get all the following items.

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You can start by calculating your rough Incorporation Costs with our Business Set Up Calculator below.

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These costs are estimated. Please speak to our consultants to get a more accurate cost breakdown.

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Let's go through what each of these costs are:

2. Business License (AED 12,000–AED 50,000+)

One of your first steps is obtaining the appropriate business license based on your company’s activities. Options include:

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• Commercial License: For trading or retail activities.
• Professional License: For service-based businesses like consulting or education.
• Industrial License: For manufacturing businesses.

The cost depends on the location and activity. Typically, licenses in Free Zones start around AED 12,000, whereas mainland licenses may exceed AED 50,000 depending on industry and requirements.

You will need to renew your license every year.

3. Office Space Rental (AED 10,000–AED 40,000+ per year)

A physical office address is mandatory for company registration in Dubai. Virtual offices are only permitted in certain Free Zones.

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• Free Zones: Offer budget-friendly co-working spaces starting at AED 10,000/year, which often include license costs.
• Mainland Offices: Tend to be more expensive, typically ranging from AED 30,000–AED 40,000+ per year.

Tip: If you’re bootstrapping, a Free Zone co-working space is a cost-effective option. Explore Free Zones like Dubai Silicon Oasis or Sharjah Free Zone for affordable rental packages.

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4. Registration and Government Fees (AED 10,000–AED 20,000+)

You’ll need to pay government fees as part of the business registration process, including:

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• Trade Name Registration (AED 500–AED 1,000): This secures your official company name.
• Initial Approval Fees (AED 2,000–AED 5,000): Paid to government bodies for permits and approvals.
• Memorandum of Association (AED 2,000–AED 3,000): Required for all companies as part of the incorporation process.
• Notary and Translation Costs (AED 1,500–AED 2,500): Some documents require certified legal translations and notarizations.

5. Visa Costs (AED 4,000–AED 7,000 per visa)

As an expat business owner, you can get an Investor Visa to live and legally operate in Dubai. Costs include:

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• Visa Application Fee: AED 3,000–AED 4,000.
• Medical Test and Emirates ID: AED 500–AED 1,000.
• Family or Employee Sponsorship: Additional AED 5,000–AED 8,000 per family member or employee.

Visas are typically valid for 2 years and require renewal, so plan this as a recurring cost.

6. Local Sponsor Fees (AED 10,000+)

This applies if you’re registering a mainland company, for some business types only:

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• UAE law mandates that 51% of mainland companies must be owned by a UAE national sponsor.
• While they may not be involved in operations, sponsorship fees typically start at AED 10,000/year, though this is often a negotiable arrangement.

Tip for Expats: If you want 100% ownership, a Free Zone setup is your best bet.

7. Other Costs to Budget For

In addition to the above, don’t forget these recurring and upfront costs:

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• Health Insurance (AED 1,500–AED 5,000): Mandatory for all visa holders.
• Corporate Bank Account Setup: Many banks require a minimum balance to be deposited, and have monthly maintenance costs starting at AED 99.
• Legal and Consulting Fees: If you’re hiring experts to help you navigate incorporation, this may add another AED 7,000-20,000 - Unless you work with us! We offer transparent and affordable pricing to help you set up your company. Get in touch if you’re interested in talking.

4 - How to open your Business in Dubai - Step by Step

You are fully aware of the costs of incorporating a company, now you just need to get started! Generall, the process follows these stteps:

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1. Choose Your Business Location: Decide on Mainland or Free Zone depending on your business needs and budget. If you want to go with a Free Zone, you will need to browse through the dozens of options available and also decide on one that suits your business. You can work with us to help you with this step.
2. Pick a Business Activity: Your license will depend on the nature of your business (e.g., trading, professional services, e-commerce...).
3. Register Your Trade Name: Ensure the name isn’t already registered, adhering to UAE naming guidelines.
4. Apply for Your License: Submit all documentation to the relevant government authority. You will need to undergo identity verification and the necessary documents will start to be released to you.
5. Apply for Visas: Once everything is approved, you can process your Visa and enter the country when it’s issued.

You can start the process of creating your company from abroad and enter the country once your Visa has been approved.

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In reality, each of the above steps has many micro-steps involved, but with the help of the Matutto Team, you don’t have to worry about any of that! Let us help you with incorporation, and make your experience as smooth as it gets 🚀

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FAQs About Starting a Business in Dubai

1. Can I get 100% ownership of my business?

‍Yes. Free Zones allow 100% foreign ownership. Some Mainland businesses require a local sponsor.

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2. What is the fastest way to register a company?

‍Choosing a Free Zone is often faster and more streamlined, with some setups completed in a 1-2 weeks. Mainland businesses involve more steps and external approvals.

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3. Are there hidden costs I should watch for?

‍You may encounter consultants and established companies who offer you a flat fee for incorporation (i.e. AED 30k). Beware as they typically don’t disclose which Free Zone they incorporate your business in, nor do they tell you how much money it actually costs. This doesn’t let you have visibility of how much their “fee” was. You may also be stuck to a Free Zone which doesn’t fit your business long term. Talk to us to avoid this, as we have a transparent fee model and we are Free Zone agnostic to help you find the best option for your company.

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In a nutshell, setting up a business in Dubai as an expat may feel intimidating due to the initial costs, but the rewards are worth it. From access to robust international markets to world-class infrastructure, Dubai offers unmatched opportunities for global entrepreneurs.

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Ready to take the plunge? Use our Business Cost Calculator or reach out to one of our team members to get tailored advice for your setup. Let’s get you moved to Dubai!

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