The United Arab Emirates (UAE) has become a popular place to do business in recent years thanks to its strategic location, business-friendly environment, and lack of corporate taxes. When setting up a business in the UAE, obtaining the correct business license is an important first step. But with dozens of options across the 7 emirates, navigating the licensing process can be confusing.
Cheapest business licenses in the UAE
The cheapest business license available depends on factors like location and business activity. However, most of the lowest-cost licenses fall into a few common categories:
Professional licenses
Professional licenses allow freelancers and skilled professionals to legally operate. Rather than registering a company, the license is held by an individual. Professional licenses are among the cheapest and fastest to obtain in the UAE. They typically take 1-2 days to process and costs between AED 1,000-4,000 per year.
Key benefits:
- Low cost
- Quick approval
- Minimal documents required
Best for: Consultants, designers, artists, photographers, trainers, coaches
Commercial licenses
Commercial licenses enable onshore companies to be created inside UAE free zones or on the mainland. They allow much broader business activities than professional licenses. Annual costs start from around AED 10,000 in free zones like Ajman ($2,700 USD) and can go up to AED 50,000+ ($13,600+ USD) on the mainland depending on activities.
Key benefits
- Allows onshore company formation
- Access to office spaces/warehouses
- Can sponsor visas
Best for: Trading, services, manufacturing, logistics companies
Offshore licenses
Offshore companies can be set up in a UAE free zone but trade internationally rather than inside the country. Offshore licenses start from around AED 10,000 ($2,700 USD) per year.
Key benefits:
- Low yearly costs/quick setup
- Zero taxes
- Anonymity
Best for: International consulting/services, holding companies
Cheapest free zones for licensing
The UAE has over 40 free zones, special economic areas designed to encourage business by offering faster licensing, better infrastructure, and other benefits like 100% foreign ownership. Some of the most affordable free zones for licensing include:
1. Ajman Free Zone
With license fees from AED 13,000 ($3,500 USD), Ajman offers the lowest cost offshore company setup in UAE free zones. It specializes in e-commerce and technology licenses.
2. RAK ICC
RAK ICC offers offshore, services, industrial and tech licenses starting from AED 10,500 ($2,900 USD). It has become popular due to fast processing and government compliance.
3. Creative City Fujairah
Focusing on creative industries like media, design and marketing, Creative City Fujairah offers flexi-desk and retail licenses from just AED 7,300 ($2,000 USD).
4. DMCC
Though not the cheapest, DMCC offers an attractive proposition to new businesses with Dubai-based licenses starting from AED 21,000 ($5,700 USD).
Mainland licensing costs
Licensing on the UAE mainland can be more expensive but enables access to industries like manufacturing not permitted inside free zones. Costs vary hugely based on activities, share capital requirements and location. Options include:
Dubai: Licenses with activities like trading start from AED 23,000 ($6,300 USD)
Abu Dhabi: Trading licenses begin at approx. AED 40,000 ($11,000 USD)
Sharjah/Ajman Mainland: Licenses can be obtained for AED 35,000+ ($9,500+ USD)
Many factors like visa quotas, office space, and share capital also impact overall costs. But the mainland can provide the right option for larger enterprises.
Key steps in the licensing process
While each location has its own procedures and requirements, the standard steps for obtaining a business license in the UAE are:
- Select location (free zone vs. mainland)
- Choose license type
- Prepare name/activity approvals
- Submit documents & pay fees
- Await license approval
Government portals like invest.dubai.ae provide more detailed guidance. Consulting a PRO (public relations officer) is also advised to smoothly navigate set up in the UAE.
Conclusion
The UAE offers cost-effective licensing options starting from a few thousand dirhams per year. The cheapest business licenses are available in certain free zones and for independent professionals. But the landmark reforms happening across the mainland are also making setting up easier and more affordable. By understanding the key costs around business licensing, international founders can take the first step towards accessing this vibrant market of 10+ million consumers more seamlessly.
Key Takeaways
- Professional freelance licenses are the cheapest in the UAE at AED 1,000-4,000 per year with fast setup
- Ajman has the most affordable offshore company setup starting from AED 13,000 per year
- Creative City Fujairah offers the cheapest UAE free zone licenses tailored to creatives from AED 7,300 per year
- Mainland licensing costs over AED 35,000 per year but provides access to more industries like manufacturing
- Selecting the right location between free zones vs mainland is key factor driving license costs
Frequently Asked Questions
Q: What are the cheapest business activities to license in UAE free zones?
A: The cheapest licensed activities in UAE free zones include service-based businesses like consulting, marketing, HR, IT services, creative industries and e-commerce/tech platforms.
Q: Does the UAE offer temporary business licenses?
A: Yes, some free zones like DMCC allow 30-day temporary licenses to test products/services in the UAE market. Many also offer flexi or coworking desk packages for new entrants.
Q: What are the main license types available in the UAE?
A: The core license categories are commercial (for general trading/services), industrial (manufacturing/production) and professional (for individuals). Free zones also offer specialized licenses tailored to sectors like media/tech.
Q: How long does it take to get a business license in the UAE?
A: License processing times range from 1-2 days for a freelance permit to 4-6 weeks for a mainland company depending on activity. Free zone licenses take 1-3 weeks on average.
Q: What are the ongoing costs after obtaining a UAE business license?
A: Key running costs include visa fees for staff, office rent if applicable, registration renewal charges, and depending on location: attestation, health/pension contributions etc.
Q: Can I get a UAE business license if I am not a UAE national?
A: Yes, the UAE allows 100% foreign ownership of onshore companies in free zones and 49% foreign ownership on the mainland. Investors simply partner with a local Emirati service agent.
Q: Are business licenses issued in one emirate valid across the UAE?
A: No, a recognized business license is required to operate in each individual emirate. Some free zones offer licenses with access rights across 2-3 Emirates.
Q: Can I get a business license in Dubai without office space?
A: Yes, Dubai offers flexi or coworking desk options for those that meet the criteria, along with virtual office packages with no physical premises needed.
Q: What are the main documents needed for a business license application?
A: Standard documents include passport copies and no objection certificates (NOCs) from current residency sponsors for all owners/partners/shareholders along with location-specific forms.
Q: Can I get a business license for a recruitment firm in the UAE?
A: Yes, leading free zones issue licenses for search/selection, executive recruitment and approved HR activities. Recruitment regulations have eased in recent years.
Q: What commercial activities are restricted for business licensing in the UAE?
A: Banned activities include anything harmful or illegal like drugs, weapons/military equipment, gambling/casinos/pornography, political/religious erosion content etc.
Q: Can I get a business license without being physically present in the UAE?
A: Yes, remote licensing is possible in certain free zones through authorized agents by submitting scans/copies of documents. Some mainland licenses also now allow virtual issuance.
Q: How often do business licenses need to be renewed in Dubai/UAE?
A: Most licenses require yearly renewal although some zones issue 2 or 3 year licenses. Late renewals typically incur fines so companies must complete formalities before expiration.
Q: Can I get an alcohol license for my restaurant in Dubai or Abu Dhabi?
A: Yes, serve licenses are available but alcohol licensing has strict protocols. Only certain premises like hotels, golf clubs and restaurants meet criteria. Home delivery is restricted.
Q: Are there any minimum capital requirements for business licensing in Abu Dhabi?
A: Yes, unlike Dubai, Abu Dhabi mandates minimum share capital of AED 1 million for general trading activities and higher for other sectors.
Q: What are the visa costs after getting a license for my small company?
Visa fees start from approx. AED 4,500 per employee per year. With medical insurance, etc. total ongoing costs are approx. AED 8,000+ per person depending on grade/category.
Q: Can I open a restaurant/cafe with an instant or temporary license?
A: Yes, zones like DMCC offer instant cafe licenses. Some hotels offer restaurant pop-ups. But full dining permits have more complex requirements around minimum space, hygiene, fire systems etc.
Q: Where can I find updated cost information on business licensing in the UAE?
A: Government portals like DED Dubai, AD DED Abu Dhabi and ministry sites cover latest license categories, activities, share capital/cost updates. Registered agents also have pricing overviews.
