Dubai offers high business opportunities since the economy here is prospering, the location strategic, and of a business-friendly environment. The most in-demand among these options are mainland companies, which are business ventures that allow for free activities throughout Dubai and even the greater UAE market, because they are not limited by geographic boundaries. In doing so, it presents various benefits to the owners of a business.
Nevertheless, knowledge about the cost structure associated with forming a mainland company is a requirement to make the right choice.
In this blog, we’ll break down in detail the cost of mainland company formation in Dubai so that the entrepreneur is ready for this undertaking.
For foreign investors, a mainland company presents the possibility of either a joint venture with a local sponsor, who must be a UAE national, or in a few sectors, 100% foreign ownership. The establishment process includes registering the business, acquiring a trade license, finding office space, and obtaining the relevant visas and permits.
In this blog, ‘Cost Breakdown of Mainland Company Formation in Dubai,’ we will discuss in detail the costs associated with forming a company on the mainland in Dubai.
Government Fees
Some of the government fees charged to set up a mainland company in Dubai include key services covering the registration of your company’s trade name, licensing, and requirements for office space. Here are the main government-related costs broken down below:
- First registration fees.
- Trade Name Booking: AED 115.50
- Trade Name Reservation Certificate: AED 641
- Initial Approval (DED Service): AED 115.50
- Initial Approval Fee Certificate: AED 141
These fees are part of the initial process, ensuring that your company’s name is reserved, and you receive approval from the DED to proceed with company formation. All of these charges are one-time costs during the setup phase.
- Memorandum of Association (MOA) Fees: AED 325
Memorandum of Association is a legal document that gives the structure of a company and responsibility. This is a mandatory process for the formation of a company and is paid only once when the company is formed.
- Licensing Fees: AED 11,000 per year
The trade license fee is one of the most significant recurring costs. It covers the rights to operate within the UAE and renew your company’s legal status annually. This also includes:
- MOA Court Attestation: AED 1,500
Licensing Accommodation Allowance: This includes the partner’s share in the office rental. For some types of businesses, this fee is based on 5% of the office rental.
- Office Space Requirement:
A mainland business must have a physical office space in Dubai. Office space rent varies according to area, size, and facilities. The fee of 4,800 AED is for a virtual office address in Dubai. Actual physical office rent starts at 35,000 AED, with the price varying based on location and square footage requirements. It’s essential to factor in this cost as part of your setup budget.
- Service Charges for Company Formation: AED 1,500
Service charges include administrative support, document preparation, and liaising with authorities to complete the necessary procedures.
Total License Fee: AED 18,753.50
This is the total cost involved in obtaining the trade license and completing the registration and documentation processes for a mainland company.
Post-License Fees and Employee Documentation
After your company is registered and licensed, there are several additional fees, especially if you need visas or employee permits. These are often necessary for businesses planning to hire local or foreign staff.
- Immigration Establishment Card: AED 576 (annual fee)
This card is required to establish a company’s immigration file and manage labor-related procedures.
- Investor Visa
Inside the country: AED 3,798 (valid for 2 years)
Outside the country: AED 2,611
An investor visa allows you to reside in the UAE and manage your business. The cost varies depending on whether you’re applying from within the UAE or from abroad.
- Labor Establishment Card: AED 690 (one-time fee)
This card is mandatory for firms that are planning to recruit staff; it will make sure the firm is labor law compliant in Dubai.
- E-Signature Card: AED 130 one-time charge.
The e-signature card is used for electronically signing official documents and contracts.
- Labor Quota Fee: AED 520 (inspection charge) + AED 50 per labor quota
This fee applies if you will be hiring employees. It comprises an inspection fee and additional charges for each labor quota (work permit).
Visa Fees
Visa costs are another essential part of company formation. These fees cover both investor and employee visas, which are necessary for residency and employment purposes.
- Employment Visa (Category 2)
Inside the country: AED 5,402 (valid for 2 years)
Outside the country: AED 4,150
Insurance: AED 650 (Orient Basic Insurance)
Category 2 visas are generally for skilled employees. The fee depends on whether the applicant is inside or outside the UAE.
- Employment Visa (Category 3)
Inside the country: AED 7,648 (valid for 2 years)
Outside the country: AED 6,396
Insurance: AED 650 (Orient Basic Insurance)
Category 3 visas are typically for higher-level employees, such as managers or directors.
Total Visa Fees: AED 10,596
This sum encompasses all charges on visa procedures for both the investor and his staff.
Added Services
Many add-on services are also available, which could be a goldmine for businessmen. Many of them are offered at no charge; however others will cost them a little more:
- Company Stamp: Free
The company stamp is necessary to make any documentation and legal document valid.
- Tax Consultation: Free
Specialized consultations to ensure your business complies with UAE tax regulations.
- Company Bank Account Opening: Free
Assistance with opening a corporate bank account in Dubai is provided at no extra charge.
WPS Opening Assistance: AED 250
If required, assistance with setting up the Wages Protection System (WPS) for payroll is available for a nominal fee.
Total Estimated Costs for Company Setup
The total cost of setting up a mainland company in Dubai depends on factors such as the type of business, the number of visas, and the office space chosen when all fees are accounted for. Here’s an estimate for a basic setup:
- Government and Licensing Fees: AED 18,753.50
- Visa Fees (for one investor): AED 3,798
- Employee Visa Fees (for one Category 2 employee): AED 5,402
Total Estimated Setup Cost: AED 28,000–33,000 (approx.)
This estimate includes all essential costs like licensing, office setup, and employee documentation. Additional services or customizations (such as hiring more employees or renting larger office space) will increase the cost.
How to Minimize Costs
While setting up a business in Dubai can be expensive, there are strategies to reduce costs:
- Opt for Shared or Flexible Office Spaces: If your business doesn’t require a large office, choosing a smaller or shared space can significantly reduce rental costs.
- Use Value-Added Services: Take advantage of free services like tax consultations, company stamps, and bank account opening to save on additional fees.
- Consult Experts: Working with experienced consultants can help you navigate the setup process more efficiently and avoid unnecessary costs.
Starting a mainland company formation in UAE offers significant advantages, including market access and flexibility. However, understanding the associated costs is key to a successful setup. By being aware of the government fees, licensing requirements, office space costs, and visa expenses, you can better plan your budget and ensure a smooth business formation process. To learn more details, get in touch with Damaar, and we will guide you through the process smoothly.
