Cost of setting up a business in Dubai: complete 2025 guide

Costs of setting up a business in Dubai

The cost of establishing a business in Dubai varies based on several factors, including the type of business activity, location, and additional operational needs. Dubai’s diverse economic environment offers various options for entrepreneurs, making it essential to understand the costs involved. Business setup costs include licensing, office rental, administrative fees, and potential costs related to approvals or specific business activities. Depending on whether the business operates in the mainland, a free zone, or offshore, the cost structure will differ. For example, the company setup cost in Dubai Silicon Oasis will vary from that in JAFZA or IFZA, depending on the facilities and regulations of each free zone.

Key factors influencing business setup costs

Several key factors influence the total cost of setting up a business in Dubai. These include the type of business activity, which determines the required license and associated fees. The chosen location — mainland, free zone, or offshore—also significantly affects costs, as each option comes with different regulations and expense structures. Office space and rental costs vary depending on the size, type, and location of the premises. Additionally, licensing fees, administrative charges, and other government approvals contribute to the overall expense. Entrepreneurs looking to establish an online business may consider an e-commerce license, which has a different pricing structure compared to traditional business licenses.

Types of business activity

The type of business activity plays a pivotal role in determining the cost of setting up a business in Dubai. Activities such as trading, consultancy, manufacturing, or service provision require specific licenses, each with its own fee structure. Some activities, like those in specialized industries such as healthcare, education, or finance, may require additional approvals from relevant government authorities, leading to higher costs. The nature of the business also impacts requirements for office space, workforce, and other operational needs, which can further influence the overall setup expenses. For example, businesses focused on digital services might opt for an eTrader license, which is more cost-effective compared to traditional business structures.

Location: mainland, free zone, or offshore

The choice of location — mainland, free zone, or offshore — has a significant impact on the cost of setting up a business in Dubai.

• Mainland. Setting up in the mainland offers the ability to trade directly within the UAE market and engage with government contracts. However, it often involves higher licensing fees, office rental costs, and compliance with specific local regulations, such as appointing a local service agent or sponsor in some cases.
• Free zone. Free zones provide 100% ownership, tax benefits, and streamlined administrative processes. Costs in free zones can vary depending on the zone's facilities and services. For instance, entrepreneurs looking for cost-efficient solutions may explore Meydan Free Zone, Sharjah Airport Free Zone, or Ajman Free Zone for lower licensing fees.
• Offshore. Offshore company setup is designed for businesses that do not need a physical presence in the UAE. It offers lower setup costs and tax advantages, but these entities are restricted from conducting business within the UAE market directly.

Each location comes with its own set of benefits and cost implications, making the choice a critical factor in determining overall setup expenses.

Office space and rental costs

Office space and rental costs are significant components of business setup expenses in Dubai. The price varies based on factors such as the location, size, and type of office required.

In the mainland, businesses must secure physical office space or a warehouse, with rental costs depending on the area. Prime locations, such as Business Bay or Downtown Dubai, command higher rents compared to more suburban areas.

In free zones, businesses often have the option of flexible office solutions, such as shared desks or virtual offices, which can significantly reduce costs. However, dedicated office spaces within free zones may still incur premium charges, especially in well-established zones like Dubai Multi Commodities Centre (DMCC) or Dubai Internet City.

For offshore businesses, there is generally no requirement for physical office space, which helps keep operational costs low.
Office rentals in Dubai are typically paid annually and may include additional costs like service charges, security deposits, and fit-out expenses, all of which should be considered when budgeting for a business setup.

Licensing and administrative fees

Licensing and administrative fees are essential expenses when setting up a business in Dubai. The type of license required—commercial, professional, or industrial—directly influences the cost.

• Mainland licenses. These involve fees from the Department of Economic Development (DED) and may include additional costs for trade name registration, initial approval, and local service agent agreements if applicable.
• Free zone licenses. Fees in free zones typically cover company registration, trade license issuance, and other administrative charges. These costs vary by free zone, with more prominent zones like DMCC or RAK Free Zone often having higher fees.
• Offshore licenses. An offshore setup involves comparatively lower licensing costs, with a focus on company registration and minimal ongoing fees.

Administrative charges, such as visa issuance, immigration card fees, and document notarization, are common across all setups and add to the overall expense. The licensing process may also require industry-specific permits or approvals, which can increase costs depending on the business activity.

Breakdown of business setup costs

The cost of setting up a business in Dubai varies depending on the chosen jurisdiction — mainland, free zone, or offshore. Each option has its own cost structure, tailored to the type of business activity and operational needs.

• Mainland business setup. Setting up in the mainland generally incurs higher licensing fees and additional expenses, such as local sponsorship fees (if applicable) and mandatory office rental costs. Licensing fees typically range between AED 10,000 and AED 50,000, depending on the activity.
• Free zone business setup. Free zones offer packages that include trade licenses, visas, and office space. The costs can range from AED 15,000 for a basic package in smaller free zones to over AED 50,000 in premium free zones with more advanced facilities.
• Offshore business setup. Offshore companies have the lowest setup costs, typically ranging between AED 10,000 and AED 20,000. These costs mainly cover company registration and compliance.

Each type of setup comes with specific administrative and operational costs, such as visa processing, document notarization, and potential government approvals, which should be factored into the total budget.

Mainland business setup

Setting up a business in the mainland allows companies to trade directly within the UAE market and access government contracts, making it an attractive option for many entrepreneurs. However, it comes with specific costs and requirements.

• Licensing fees. These are determined by the DED and vary depending on the type of license — commercial, professional, or industrial. Fees typically range between AED 10,000 and AED 50,000.
• Local sponsorship or service agent fees. For certain business activities, mainland companies require a UAE national as a local sponsor or service agent. Fees for these arrangements can vary widely, depending on the agreement.
• Office space requirements. A physical office is mandatory for mainland businesses, with costs depending on location and size. Prime areas like Sheikh Zayed Road or Business Bay tend to have higher rents compared to suburban locations.
• Additional costs. These include trade name registration, initial approval fees, and visa issuance costs for employees and partners.

While a mainland setup offers flexibility in market access, the associated costs are often higher compared to other options like free zones or offshore setups.

Free zone business setup

Setting up a business in one of Dubai’s free zones is a popular choice due to the benefits of 100% foreign ownership, tax exemptions, and simplified administrative processes. Each free zone has its own cost structure and regulations, making it essential to choose the one that aligns with the business's needs.

• Licensing fees. Free zone licenses often come as part of bundled packages that may include trade license issuance, office space, and visas. These packages can start from AED 15,000 in smaller free zones and go up to AED 50,000 or more in premium zones like DMCC or Dubai Airport Free Zone (DAFZA).
• Office space costs. Free zones provide flexible options, including virtual offices, shared workspaces, and dedicated offices. Costs vary based on the space type and location. Virtual offices are typically the most affordable, while premium office spaces in well-established zones are more expensive.
• Visa costs. Free zones offer visa quotas based on the type of license and office space. Additional visas can be purchased if needed, with costs ranging from AED 3,000 to AED 5,000 per visa.
• Additional fees. These may include company registration, document notarization, and optional services like PRO assistance.

Free zones are ideal for businesses focused on international trade, services, or technology, offering cost-effective solutions with access to state-of-the-art infrastructure. However, trade within the UAE mainland is restricted without appointing a distributor or obtaining special approvals.

Offshore business setup

Offshore business setup in Dubai is a cost-effective option designed for companies that do not require a physical presence in the UAE or intend to conduct business primarily outside the country. Offshore companies are often used for holding assets, tax optimization, and international trade.

• Company registration costs. Offshore setup involves relatively low costs, typically ranging between AED 10,000 and AED 20,000, which cover company incorporation, registration, and compliance.
• No office requirement. Unlike mainland and free zone setups, offshore companies do not require office space, eliminating rental expenses. A registered agent is mandatory, and their fees are included in the setup package.
• Licensing fees. Offshore businesses are not issued trade licenses but operate under a certificate of incorporation. This limits their ability to trade directly in the UAE market but allows full international operations.
• Minimal operational costs. Offshore companies benefit from reduced administrative overheads since they do not engage in local business activities or employ staff within the UAE.

This setup is ideal for businesses focused on international trade, wealth management, or asset protection, offering a low-cost solution with flexibility for global operations. However, it is not suitable for companies requiring access to the UAE’s domestic market or physical infrastructure.

Step-by-step guide to starting a business in Dubai

Setting up a business in Dubai requires careful planning and adherence to the legal and administrative processes. The following steps outline the process:

Step 1. Define your business activity

Determine the specific business activity or activities your company will engage in. This decision is crucial as it defines the type of license required and any additional approvals necessary.

Step 2. Choose a location and legal structure

Decide whether to establish your business on the mainland, in a free zone, or offshore. The chosen location will influence costs, ownership rules, and operational flexibility. Select the appropriate legal structure, such as a sole proprietorship, limited liability company (LLC), or branch office.

Step 3. Register your trade name and obtain approvals

Select a unique trade name that complies with Dubai’s naming conventions and register it with the relevant authority. Depending on your business activity, you may also need to secure special approvals from government bodies or industry regulators.

Step 4. Finalize licenses and office space

Apply for the necessary trade license and secure office space as required by your chosen jurisdiction. Complete the visa application process for owners and employees, and obtain your company’s establishment card for immigration purposes.

By following these steps, businesses can ensure a smooth setup process while meeting all regulatory requirements in Dubai.

Step 1. Define your business activity

The first step in setting up a business in Dubai is defining your business activity. This involves identifying the core operations your company will perform, such as trading, consulting, manufacturing, or providing services.

Business activities are classified and regulated by the DED for mainland companies and by specific free zones for businesses established within their jurisdiction. Certain activities, like healthcare, education, or financial services, require special permissions or additional certifications from relevant government bodies.

The type of business activity you choose will determine the license you need — commercial, professional, or industrial — and influence the overall setup costs and regulatory requirements. Carefully selecting your business activity ensures compliance with UAE regulations and aligns your operations with market demands.

Step 2. Choose a location and legal structure

Choosing the right location and legal structure is a critical step in establishing a business in Dubai. The location determines your operational framework, cost structure, and market access.

Location options:

• Mainland: offers unrestricted access to the UAE market but often requires a local sponsor or service agent for certain business types.
• Free zones: provide tax benefits and streamlined processes but limit trading within the UAE market unless special permissions are obtained.
• Offshore: ideal for international trade and asset holding, with minimal regulatory and operational requirements, but restricted from conducting business within the UAE market.

Legal structure:

Businesses can choose from various legal entities, such as sole proprietorships, limited liability companies (LLCs), or branch offices. The structure depends on factors like ownership preferences, liability considerations, and operational needs.

Selecting the right combination of location and legal structure ensures compliance with regulations while aligning with your business goals.

Step 3. Register your trade name and obtain approvals

Once the business activity and location are finalized, the next step is to register your trade name and secure the necessary approvals.

• Trade name registration. The trade name must comply with UAE naming conventions and reflect the nature of your business. It should avoid references to religion, political groups, or offensive terms. The name must be unique and not already registered by another entity. The DED or the relevant free zone authority handles the registration process.
• Initial approvals. Certain business activities require preliminary approvals from regulatory authorities. For instance, businesses in healthcare, education, or finance may need permits from specialized bodies such as the Dubai Health Authority (DHA) or the Central Bank of the UAE.

Completing this stage ensures that your business is legally recognized and can proceed with licensing and operational setup.

Step 4. Finalize licenses and office space

The final stage of setting up a business in Dubai involves obtaining the required licenses and securing office space, as mandated by your chosen jurisdiction.

• Trade license. Apply for the appropriate trade license based on your business activity — commercial, professional, or industrial. For mainland businesses, this involves working with the DED. In free zones, the respective free zone authority handles the process. Offshore companies require a certificate of incorporation instead of a trade license.
• Office space. Depending on the jurisdiction, securing a physical office is mandatory. Mainland businesses must lease or purchase office space that meets the regulatory requirements. Free zones often offer flexible options such as virtual offices, shared spaces, or dedicated premises. Offshore companies typically do not require physical office space but must appoint a registered agent.

Once these steps are completed, you can proceed with visa applications for owners and employees, open corporate bank accounts, and officially begin operations.

Required documents for business setup

Setting up a business in Dubai requires specific documentation to comply with regulatory and legal requirements. These documents vary depending on the type of business activity, jurisdiction, and legal structure chosen.

Basic documents for all businesses:

• A completed application form for business registration.
• Copies of the passports of the business owners, shareholders, and managers.
• A trade name reservation certificate.
• Initial approval certificate from the relevant authority.

Additional documents for specific activities

Businesses in regulated industries such as healthcare, education, or finance may need to submit extra documents, including:

• Professional certifications for owners or key staff.
• External approvals from regulatory bodies like the Dubai Health Authority (DHA) or the Ministry of Education.
• Detailed project plans or feasibility studies for large-scale projects.

Preparing these documents accurately and in advance ensures a smooth registration process and minimizes delays in obtaining approvals or licenses.

Basic documents for all businesses

The foundation of any business setup in Dubai lies in submitting the required basic documents. These are mandatory across all jurisdictions—mainland, free zones, and offshore—and ensure the registration process aligns with regulatory standards.

• Application form: a filled application form, accurately detailing the business information and its intended activities.
• Passport copies: clear copies of the passports of all shareholders, business owners, and managers involved in the company.
• Trade name reservation: a certificate confirming the reservation of the trade name, issued by the relevant authority.
• Initial approval certificate: a document indicating the authority's approval for the business activity and legal structure.

These essential documents form the basis for proceeding with the licensing and operational setup, ensuring compliance with UAE regulations.

Additional documents for specific activities

Certain business activities in Dubai require additional documentation due to their specialized nature or regulatory oversight. These requirements vary based on the industry and jurisdiction.

• Professional certifications. For businesses in fields such as healthcare, education, or finance, key personnel must provide certifications or qualifications relevant to their roles. For example, doctors must submit medical licenses approved by the Dubai Health Authority (DHA).
• Regulatory approvals. Activities in regulated sectors often require external approvals. For instance, financial services businesses need clearance from the Central Bank of the UAE, while educational institutions require permits from the Ministry of Education.
• Feasibility studies or project plans. Large-scale ventures, such as construction or real estate development, may need to present detailed business plans, feasibility studies, or environmental impact assessments for approval.

Providing these additional documents ensures compliance with industry-specific regulations and facilitates the licensing process.

Benefits of setting up a business in Dubai

Dubai offers numerous advantages for entrepreneurs and investors, making it one of the most sought-after business destinations globally. These benefits are designed to support business growth and provide a competitive edge in the international market.

• Tax-beneficial environment. Dubai's tax policies are highly favorable, with no personal income tax and low corporate tax in most sectors. This tax-favorable regime allows businesses to maximize profits and reinvest in operations.
• Strategic location and infrastructure. Positioned at the crossroads of Europe, Asia, and Africa, Dubai serves as a global trade hub. Its world-class infrastructure, including modern ports, airports, and logistics facilities, facilitates seamless business operations and connectivity.

These factors, combined with government initiatives to promote entrepreneurship, make Dubai an attractive destination for business setup.

Strategic location and infrastructure

Dubai's strategic geographic location and state-of-the-art infrastructure make it an ideal business hub for entrepreneurs and multinational corporations. Situated at the crossroads of Europe, Asia, and Africa, Dubai provides easy access to key global markets, enabling seamless trade and commerce.

The emirate boasts world-class infrastructure, including:

• Modern ports and airports: Dubai International Airport and Jebel Ali Port rank among the busiest in the world, facilitating efficient cargo and passenger movement.
• Advanced transport systems: an extensive road network, metro system, and public transport make commuting and logistics highly efficient.
• Technological infrastructure: high-speed internet, smart city initiatives, and dedicated zones like Dubai Internet City support tech-driven enterprises.

These factors, combined with ongoing government investment in infrastructure development, ensure businesses have access to cutting-edge facilities and connectivity to thrive in competitive markets.

How to optimize costs and simplify the setup process

Optimizing costs and simplifying the business setup process in Dubai requires strategic planning and leveraging the available resources effectively.

• Choose the right jurisdiction. Select a jurisdiction—mainland, free zone, or offshore—that aligns with your business activity and operational needs. Free zones often offer cost-effective packages, while offshore setups minimize operational expenses.
• Utilize flexible office options. Consider virtual offices or shared workspaces in free zones to reduce rental costs, especially during the initial stages of business establishment.
• Bundle services. Many free zones and consultants provide bundled packages that include trade licenses, visas, and office solutions, helping to streamline processes and lower overall costs.
• Engage a business consultant. Hiring an experienced consultant can simplify the setup process, ensuring compliance with regulations while saving time and effort on administrative tasks.

By adopting these strategies, entrepreneurs can reduce expenses and expedite the process of establishing their business in Dubai, ensuring a smooth and cost-efficient entry into the market.