A Practical Guide for Entrepreneurs Costs, Renewal

Starting a business in Dubai is exciting, but it’s also important to understand the real costs and renewal process before you begin. Many new entrepreneurs see promotional ads showing business setup from AED 5,500, but later discover hidden expenses like visa fees, office rent, or government approvals. In this article, we’ll go step by step through what you should expect to spend, how renewals work, and the short- and long-term benefits of setting up your business in Dubai

Understanding the Real Cost of Business Setup in Dubai

The total cost of setting up a business in Dubai depends on three main factors:

• type of business activity (trading, services, manufacturing, or freelancing)
• jurisdiction (free zone or mainland)
• number of visas and office space you need

Let’s look at each one more closely.

Free Zone Setup Costs

Free zones are usually the most affordable option for small businesses, consultants, and startups. You can own 100% of your company and enjoy easy setup steps.

Item	Estimated Cost (AED)
Business licence (1 year)	6,000 – 15,000
Flexi-desk or shared office	Included or up to 4,000
Establishment card	500 – 1,000
Residence visa (optional)	3,000 – 5,000
Medical test & Emirates ID	1,000 – 1,500
Renewal (yearly)	6,000 – 12,000

Some free zones offer “zero visa” packages suitable for consultants who don’t need a residence visa.

Examples of free zones:

• RAKEZ
• Sharjah Media City (Shams)
• Ajman Free Zone
• Dubai CommerCity (for e-commerce)
• IFZA Dubai
• Fujairah Creative City

Mainland Setup Costs

If you plan to trade or offer services directly within the UAE market, then you’ll need an e-commerce mainland licence

Typical cost breakdown:

Item	Estimated Cost (AED)
Licence fee (commercial/service)	10,000 – 18,000
Office or shop rental	From 5,000 per year
Initial approval & name reservation	800 – 1,200
Residence visa (optional)	3,000 – 5,000
Local service agent (if required)	Around 2,000 – 5,000 per year
Renewal (yearly)	10,000 – 15,000

Mainland benefits:

• Sell directly within the UAE
• No limitations on the number of visas (depends on office space)
• Work with government contracts or tenders

Renewal Costs & Annual Maintenance

After your first year, you’ll need to renew your trade licence to keep your company active. Renewal is usually easier than the first setup but can still include a few steps.

Common renewal requirements:

• Trade licence renewal fee
• Visa renewal (for each employee)
• Lease agreement renewal
• Audit reports (for some free zones or mainland entities)

Average renewal cost per year:

• Free zone: AED 6,000 – 12,000
• Mainland: AED 10,000 – 15,000

Tip: Always renew before expiry to avoid penalties. Delays can lead to fines or licence suspension.

Optional or Hidden Costs You Should Budget For

Many first-time business owners forget about these extra charges:

• Corporate bank account setup: Some banks require a minimum balance (AED 25,000–50,000).
• Visa deposits or insurance: Required for each visa applicant.
• Office utility bills or Ejari: For mainland offices.
• Accounting and auditing fees: If your company crosses a certain revenue limit.
• Marketing or website setup: Basic websites can start from AED 1,500.

Being aware of these early will help you plan better and avoid last-minute stress.

Short-Term Benefits of Dubai Business Setup

Setting up in Dubai offers quick advantages, especially for new entrepreneurs or freelancers:

• Fast licence approval: You can start operating within a few days.
• 100% ownership: Especially in free zones and now for many mainland activities too.
• Tax-free income: 0% personal tax and up to 0% corporate tax for most small businesses.
• Easy visa process: For you, your staff, and family members.
• Affordable packages: Some free zones offer starter packages under AED 6,000.

Long-Term Benefits

Once your business is established in uae and running smoothly, you’ll notice more long-term advantages:

• Global access: Dubai connects your business to international clients and markets.
• Business credibility: A Dubai-registered company gives your brand more trust.
• Expansion flexibility: You can add more activities or open branches easily.
• Modern infrastructure: Access to ports, airports, and digital services.
• Networking & growth: Dubai hosts global expos, business summits, and startup events.

Tips for Managing Costs Efficiently

• Start small: Begin with a basic licence and upgrade later.
• Choose the right free zone: Compare offers, some include visa and desk space.
• Use a flexi-desk: Avoid paying for large office space in the beginning.
• Keep documents organized: Saves time during renewal.
• Review your package yearly: You might find cheaper or more suitable renewal options.

Setting up a business in Dubai is not just about getting the cheapest package, it’s about understanding your real costs, renewal fees, and long-term benefits. With the right plan and budget, you can enjoy a stable business environment, full ownership, and access to one of the world’s fastest-growing markets. Dubai rewards entrepreneurs who plan wisely. Start small, stay compliant, and focus on building your business for the long term. Your investment will pay off.

FAQs About Costs & Renewals

Q.1 Is the setup cost the same for all free zones?

No. Each free zone has its own pricing and offers. Always check if the package includes visa and workspace.

Q.2 Can I pay my licence fee in installments?

Some free zones and business setup agents allow flexible payment plans.

Q.3 What happens if I don’t renew on time?

You’ll face fines, visa cancellation, and possible licence suspension.

Q.4 Are there any government taxes after setup?

For most small businesses, there’s no corporate tax unless your annual profit exceeds AED 375,000.

Q.5 Can I upgrade my free zone company to mainland later?

Yes, but you’ll need to close the free zone entity and open a new mainland company.