Dubai is one of the most popular global hubs for entrepreneurs and businesses. With its strategic location, business-friendly regulations, and world-class infrastructure, Dubai offers immense opportunities across sectors. However, the initial business set-up costs can be high compared to other parts of the world. This article provides a comprehensive overview of the minimum capital requirements, licensing fees, visa costs, office rentals, and other expenses to start a business in Dubai.
Minimum Capital Requirement
The minimum capital requirement to start a business in Dubai’s mainland and free zones varies across business activities:
- Trading business – AED 300,000
- Industrial business – AED 2,500,000
- Commercial business – No minimum capital requirement
- Professional business – No minimum capital requirement
Several free zones have no minimum capital requirement at all. However, specific business activities may have prescribed capital requirements.
Licensing Fees
Business licensing fees in Dubai typically include:
- Initial business registration fees
- Annual renewal fees
These vary across different entities and free zones:
Mainland Dubai
| Business Entity | Registration Fees | Renewal Fees |
| Sole Proprietorship | AED 15,000 | AED 15,000 |
| Limited Liability Company (LLC) | AED 15,000 | AED 15,000 |
| Private Shareholding Company (PSC) | AED 15,000 | AED 15,000 |
| Public Shareholding Company (PUBC) | AED 30,000 | AED 30,000 |
| Civil Company | AED 15,000 | AED 15,000 |
| Branch Company | AED 15,000 | AED 15,000 |
Dubai Free Zones
| Free Zone | Entity Setup Fees | Renewal Fees |
| Dubai Silicon Oasis (DSO) | AED 4,500-20,000 | AED 10,000-70,000 |
| Dubai Airport Freezone (DAFZ) | AED 21,000 | AED 14,000 |
| Dubai Healthcare City (DHCC) | AED 21,000 | AED 15,000 |
| Dubai Multi Commodities Centre (DMCC) | AED 29,500 | AED 20,000 |
Resident Visa Costs
If owners or employees require UAE residence visas, additional visa costs apply:
| Visa Type | Cost | Validity |
| Investor Visa | AED 6,800 | 3 Years |
| Partner Visa | AED 5,050 | 3 Years |
| Employment Visa | AED 900-3,500 | 2-3 Years |
Office Rental
Office rental is a major cost component, with prices varying significantly by location:
Rental Rates per Square Foot per Year
| Area | Rental Rate |
| Burj Khalifa Downtown Dubai | AED 130-220 |
| Business Bay | AED 90-130 |
| Dubai Silicon Oasis | AED 40-60 |
| International City | AED 25-40 |
Typical office sizes range from 150 – 1,000 square feet for small and medium enterprises.
Other Costs
Other common business expenses in Dubai include:
- Trade license issuance fee – AED 1,000
- Municipality registration fee – AED 10,000
- General department fees – AED 2,000
- Rental deposit (refundable) – Up to 1 year’s rent
- Utility connection charges – AED 2,000
- Company incorporation charges – AED 10,000+
- Professional legal, audit, visa fees
- Logistics, manpower, and other operating costs
Key Takeaways
- The minimum investment to start a business in Dubai ranges from AED 300,000 to AED 2,500,000 depending on the business activity. Several free zones have no minimum capital requirement.
- Initial registration and licensing fees range from AED 4,500 to AED 30,000. Renewal fees are AED 10,000 to AED 70,000 per annum.
- Office rental, visa costs, municipality fees, deposits etc. range from a few thousand to several hundred thousand AED, depending on company size and activities.
- In total, starting a small or medium-sized business in Dubai may require an upfront investment of AED 100,000 to AED 500,000+, with ongoing operational expenses.
Conclusion
While starting a business in Dubai does require considerable capital investment, the opportunities for growth, incentives for innovation, world-class infrastructure, and supportive government policies provide an ecosystem for entrepreneurs to thrive. The initial setup costs and minimum investments can be viewed as the entry price to access the Dubai market and expand in the UAE and beyond. Careful planning, expert advice, and strategic partnerships help entrepreneurs maximize returns on their investments in the long run.
Frequently Asked Questions
Q: What are the prerequisites to register a new company in Dubai?
A: The prerequisites are a valid passport, residence visa, NOC letter (for certain nationalities), satisfactory due diligence checks, and minimum share capital payment.
Q: How much does it cost to open a restaurant in Dubai?
A: Opening a small to medium restaurant in Dubai requires an investment of AED 500,000 to AED 5,000,000 covering licensing, inventory, rentals, staff, marketing etc.
Q: What are business set-up costs in Dubai free zones?
A: Free zones have entity set-up costs starting from AED 4,500, with annual fees from AED 10,000 onwards. Additional costs apply for office rent, employee visas etc.
Q: How much money is needed to open a shop in Dubai?
A: Starting a retail store in Dubai costs between AED 100,000 to AED 500,000+ covering rent, inventory, staff, permits, operating costs etc. High-end retail stores require larger investments.
Q: What is the cost of starting an e-commerce business in Dubai?
A: Launching an online business in Dubai can cost between AED 50,000 to AED 150,000+ covering licensing, development, marketing and operations. Ongoing costs tend to be lower.
Q: Can I start a business in Dubai with no investment?
A: It is legally not possible to start a registered company in Dubai with zero upfront investment. Some minimum share capital and licensing costs apply in all cases.
Q: What are the chances of new business success in Dubai?
A: Dubai provides a vibrant ecosystem for business success, though appropriate planning and expert help ensure the best chances – up to 70% of new companies find success based on their business fundamentals.
Q: Can I get financing to start my business in Dubai?
A: Yes, various options like bank loans, private funding, venture capital, and crowd-funding can provide start-up financing, subject to appropriate criteria and eligibility.
Q: How much investment is required for a freelance or professional license in Dubai?
A: Freelance licenses in Dubai cost between AED 7,500 to AED 20,000 per year with relatively lower business costs, depending on specific jurisdiction and activities.
Q: What are the most profitable small businesses in Dubai?
A: Retail, trading, restaurants, services, tech start-ups, creative industries, tourism have proven highly profitable for SMEs in Dubai.
Q: Can expatriates obtain 100% business ownership in Dubai?
A: Yes, several Dubai free zones allow 100% expat ownership, while for mainland companies expat shareholding can be up to 100% depending on jurisdiction and licenses.
Q: What support does the Dubai government offer to new enterprises?
A: Various Dubai SME programs offer funding, subsidized licensing, zero-interest loans, incubator partnerships and other incentives for driving innovation.
Q: What is the typical office size required to register a company in Dubai?
A: Typically a minimum 80 – 150 square foot office space is adequate for free zone and mainland license registration in Dubai, depending on specific requirements.
Q: How long does it take to start a business in Dubai?
A: 4-6 weeks on average after submitting all documents and capital for free zone companies, and 6-8 weeks for DMCC and mainland Dubai firms.
Q: What are the biggest challenges faced by startups in Dubai?
A: Common hurdles faced are high costs, documentation processes, identifying opportunities fit for Dubai, competition with larger players, finding the right local partners etc.
Q: Which free zone has the lowest business set-up cost in Dubai?
A: Dubai Silicon Oasis (DSO) offers among the most cost-effective company formations starting from AED 4,500, though additional running costs apply.
Q: What industries have the highest success rate for new businesses in Dubai?
A: Trading, retail, F&B, creative sectors, technology and tourism-related companies have historically witnessed higher success among Dubai startups and SMEs.
Q: Do I need a bank account in Dubai to start a business?
A: Yes, it is mandatory to open a UAE business bank account to complete trade license registration and operations for mainland or free zone companies.
