Factors Affecting Costs

Setting Up A Small Business Dubai | Reduce Your Initial Costs

Setting up a small business Dubai: Types of companies, features, benefits & criteria to consider that influence costs

Setting up a small business Dubai: There are 2,000+ activity licenses and 28+ jurisdictions to choose from.

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Setting up a small business Dubai: Get a free quote by filling your details in the form on the right and learn how to reduce your startup costs

Sharjah, Ras Al Khaimah, Fujairah, Ajman, Umm Al Quwain, Abu Dhabi and Dubai, in the United Arab Emirates [UAE], each have their own local registration jurisdiction plus multiple free zones.

Many jurisdictions have bundled packages of visas, activity & office space.

So it is complicated to make a choice.

Setting up a small business Dubai: 3 Types of companies

1. Offshore

2. Locally registered

3. Free zone

Each type has its own advantages and disadvantages. If your objectives are clear, you may be able to decide on the least cost option, with help.

Costs vary by jurisdiction, company, license type, activity, and office size.

For example:

  • If you only want a single man operation, Umm Al Quwain may be the least cost option
  • If you don’t want a physical United Arab Emirates presence, but only need to do banking and invoicing, an offshore company may be the least cost one
  • If you propose to do cross-border trading only and not sell in the local market, a free zone company may be best. Maybe in Sharjah.
  • If you want to operate a restaurant, a local company is the only option
  • If you must be in Dubai, then you know you have to pay Dubai prices
  • If your business depends on sea freight, Jebel Ali maybe the best but higher initial cost option
  • There are 2,000+ activity licenses and 28+ jurisdictions to choose from.
Setting Up A Small Business Dubai | Reduce Your Initial Costs

Varal Team Members

Setting up a small business Dubai: Get a free quote by filling your details in the form on the right and learn how to reduce your startup costs

Setting up a small business Dubai: Free Zone features & benefits

  • You own 100% of your company for all activities
  • Ease of formation of your company
  • Custom duty exempt international trade, but payable within the Oman, Bahrain, Saudi Arabia, UAE, Qatar and Kuwait [GCC] countries
  • Physical products sold within the UAE only via locally registered agents
  • Service business transactions allowed within the UAE

Setting up a small business Dubai: Local Jurisdiction features & benefits

  • Sell your products anywhere in the UAE or GCC
  • To do business with government entities, a local jurisdiction may be essential
  • Trading and Commercial activity licenses require you to have a UAE national as a ‘sponsor’ who will own 51% of your company on paper
  • Professional licenses require you to have a UAE national as a ‘service agent’. You can own 100% of the business
  • In both cases, a court agreement outlining your arrangement with the UAE national is required
  • You will only need to pay an annual fee, not a percentage of the profits
  • You can have your office anywhere the Emirate of registration

Setting up a small business Dubai: Get a free quote by filling your details in the form on the right and learn how to reduce your startup costs

Setting up a small business Dubai: 4 criteria to consider that influence overall costs

Here are other insights about how most clients make their selection

1. Location

a. Do you need your company to be registered and located in Dubai or will Sharjah, Ajman, Umm Al Quwain, Fujairah or Ras Al Khaimah do for you?
b. This decision narrows down the selection of the free zone
c. Dubai free zones are more expensive, but you may want to be in Dubai for business reasons.

2. Activity

Some business activity licenses are available only in certain free zones or for a local company

If you are clear about the type of license you need that will narrow down your choice further.

3. Visa requirement

If the initial number of employment visas required is certain, then that will determine the amount office space you will be required by law to have.

Please note that the cost of living for your employees will be less in Ajman, Sharjah, Ras Al Khaimah, Umm Al Quwain and Fujairah when compared to Dubai.

4. Office space

Authorities generally require 10 sq meters [~100 sq ft] of office space per employee visa
Naturally, office space doesn’t come in straight multiples of 10 sq meters

So the office space you rent will be dependent on the next largest size available
Ask about any special free zone deals that are being offered currently.

Setting Up A Small Business Dubai | Reduce Your Initial Costs

Varal Team Members

Setting up a small business Dubai: Get a free quote by filling your details in the form on the right and learn how to reduce your startup costs

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Factors Affecting Costs was last modified: September 29th, 2019 by Manu Raj

Manu Raj

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