Cost of Setting Up a Business in Dubai: A transparent breakdown for UK founders

Dubai’s dynamic economy and pro-business environment make it a hotspot for UK entrepreneurs eager to expand their horizons or open a new venture. However, the first question we’re always asked is: How much does it cost?

The answer isn’t one-size-fits-all. The cost depends on your business type, chosen location (Mainland or Free Zone), and additional essentials like visas or office space. To help you plan confidently, we’ve outlined a straightforward breakdown of the key expenses you must consider.   

From initial registration fees to ongoing operational costs, this guide will give you the insights you need to create a realistic budget and make wise decisions.

Why Dubai is a prime choice for UK entrepreneurs  

Before we break down the costs, let’s look at why Dubai stands out as a prime location for UK entrepreneurs:

• Zero Income Tax

  
  

  One of Dubai’s biggest advantages is its tax-friendly environment. Unlike the UK, where personal income tax can significantly reduce earnings, Dubai imposes no personal income tax and no corporate tax up to 375,000 AED, allowing entrepreneurs to retain their full profits and benefit from no personal capital gain tax. This makes Dubai a highly attractive destination for businesses looking to maximise their tax efficiency.   

  
  

• Strategic location

  
  

  Dubai’s position at the crossroads of Europe, Asia, and Africa makes it a powerful gateway to global markets. Its world-class airports and seaports ensure seamless trade and logistics, helping businesses expand internationally with ease. Whether importing goods from Asia, exporting to Europe, or tapping into emerging African markets, Dubai offers unmatched connectivity and accessibility.

• World-class infrastructure

  
  

  Entrepreneurs in Dubai benefit from its state-of-the-art infrastructure. The city boasts cutting-edge business parks, high-tech logistics centres, and reliable utilities that support businesses across all industries. Dubai's commitment to digital innovation ensures that companies have access to advanced technological resources, helping them remain competitive in an increasingly digital world. From smart office spaces to robust internet connectivity, the city’s infrastructure is designed to foster business growth.

• 100% foreign ownership

  
  

  Unlike many other jurisdictions that require local partnerships, Dubai allows foreign entrepreneurs to retain full control of their businesses when operating within its Free Zones. This autonomy, combined with the ability to repatriate profits without restrictions, provides financial security and operational freedom. Entrepreneurs can build and scale their businesses without the constraints of shared ownership, making Dubai an ideal location for ambitious business owners.

• Diverse and skilled workforce

  
  

  Dubai is home to a multicultural talent pool, attracting professionals from over 200 nationalities. This diversity ensures that businesses can access a wide range of skills and expertise, essential for growth and expansion. Free zones also offer flexible labour laws, making hiring and workforce management more efficient. Whether you need highly specialised talent or a broad workforce, Dubai provides the human capital necessary to scale operations effectively.  

  
  

Key factors that influence the cost of setting up a business in Dubai

Understanding what drives the costs of starting a business in Dubai is crucial for effective planning. Several factors contribute to the overall investment required, and businesses must carefully assess these elements to manage their budget efficiently.  

1. Type of business license

Dubai offers different types of business licenses, each with its own fee structure. The three main categories are Commercial, Professional, and Industrial licenses. A commercial license is ideal for trading businesses, a professional license is suitable for service-based industries, and an industrial license is required for manufacturing and production activities. The cost of each license varies depending on the nature of the business and the regulatory requirements.

2. Business jurisdiction

The location of your business registration significantly impacts costs and operational flexibility. Businesses can choose between three main jurisdictions:

• Mainland: Allows businesses to operate locally and internationally without restrictions on trade. However, setting up in the mainland typically involves higher costs due to licensing fees, office space requirements, and additional government approvals.

  
  

• Free Zone: Offers 100% foreign ownership, tax incentives, and simplified business regulations. Starting a business in a Dubai Free Zone can be ideal for companies that don't require direct trade with the UAE market, though they come with specific operational limitations.

  
  

• Offshore: Suited for international businesses that do not require a physical presence in Dubai. Offshore companies benefit from tax exemptions and asset protection but are restricted from conducting business within the UAE market.  

3. Company structure

The legal structure of a business affects setup costs, compliance requirements, and ownership rules. The most common structures include:

• Limited liability company (LLC): A popular choice for businesses looking to operate in the mainland with local market access.

  
  

• Sole proprietorship: Best suited for freelancers and solo entrepreneurs but comes with personal liability risks.

• Branch office: Allows foreign companies to expand into Dubai while remaining connected to their parent company.

  
  

Each structure comes with its own registration fees, capital requirements, and operational costs, influencing the overall investment.

4. Visa requirements

The cost of setting up a business in Dubai also depends on the visa requirements for business owners and employees. Free Zones typically offer visa packages that include a set number of visas, while mainland businesses must apply for individual employment visas. Additional visas for business partners, employees, or family members will increase costs, including visa application fees, medical tests, and Emirates ID registration.

5. Office space

The type of office space chosen significantly affects startup costs. Businesses in free zones can opt for flexi-desks, which provide a cost-effective solution for startups and small businesses. In contrast, Mainland businesses are often required to lease physical office space, which can be a major expense depending on the location and size of the office. Premium locations in central business districts come with higher rental costs, whereas more affordable options are available in emerging commercial areas.

Each factor determines the investment required to launch your business in Dubai. Planning around them will help ensure a smooth and cost-efficient setup. 

Cost breakdown for setting up a business in Dubai

Here’s a detailed breakdown of the main costs:

1. Business license fees

• AED 14,900 (£ 3,000)   

• Required to operate your business in a Dubai Free Zone legally. The process typically takes 5-8 days.

• You can choose a one-year or multi-year licence. A one-year licence must be renewed annually to maintain compliance.  

2. Visa costs

• AED 3,750 (£766)  

• Covers the cost of a residency visa, valid for up to two years

3. Establishment card fees

• AED 2000 (£410)   

• Necessary for company registration with immigration authorities, enabling you to apply for visas. Processing time is usually 2-4 days.   

4. Medical test

• AED 400 (£81)

• A mandatory health screening required for visa approval.

  
  

5. Emirates ID

• AED 370 (£75)

• Official identification valid for up to two years, typically issued within 8-10 days.  

6. Additional costs

• Other expenses may include office space rental, bank account setup, local sponsor fees, and administrative charges like trade name registration and initial government approvals. These costs vary based on your business needs and chosen Free Zone.                                  

Get support to budget strategically

Setting up a business in Dubai is an exciting venture, but navigating the process on your own can sometimes be overwhelming. This is where an experienced accounting firm can be your greatest ally.  

Here’s how we simplify your setup journey:  

• Expert guidance: We can advise on the most cost-effective options for your business structure, jurisdiction, and set-up, helping you make informed decisions.

• Cost clarity: Working with an accounting firm, like Jump Accounting, from the beginning means you will have a clear breakdown of all expenses. This ensures no surprises or hidden fees, and that your business can start off on the right foot financially.

• Paperwork made easy: We take care of all the applications, approvals, and required documents, making the process seamless and efficient.

  
  

If you need expert support, we are here to help make the process faster, easier, and more cost-effective. Contact our team to start your move today.