What are the costs of establishing a company in the UAE?

What are the costs of establishing a company in the Emirates? In light of the tremendous economic development witnessed by the United Arab Emirates, establishing a company in this country is considered a fruitful investment project for many entrepreneurs. However, understanding the costs associated with starting a company is an essential step before embarking on this entrepreneurial journey. The concept of the costs of establishing a company in the UAE is pivotal in this context, as understanding them correctly constitutes an essential basis for planning the success of the new venture. In this article, we will carefully and transparently review the costs related to establishing companies in the Emirates, with a special focus on the factors that must be taken into account to ensure the success of the business and achieve the required financial balance.

What are the costs of establishing a company in the UAE?

Costs of establishing a company in Dubai

Establishing a company in Dubai involves some legal and consulting costs that must be taken into account. Here are some of the legal and consulting costs related to setting up a company in Dubai:

• Licenses and Registration Fees: There are fees for obtaining business licenses and company registration in Dubai. These fees vary according to the type of company, commercial activity, and the region in which the establishment takes place (free zone or outside free zones).
• Costs of legal advisors and lawyers: You may need to consult a lawyer or legal advisor to provide legal advice and assistance in preparing the legal documents required to establish the company. The costs for the services of consultants and lawyers vary and depend on the scope of services you need.
• Special Activities and Licenses: You may need to obtain licenses and approvals specific to your specific business. This may require paying additional fees and dealing with additional procedures to obtain the necessary licenses.
• Contracts and Agreements: You may need to prepare and sign contracts and agreements with business partners, suppliers, or customers. You may need legal counsel to help you prepare these contracts and ensure they are consistent with local legislation.
• Legal protection: There can be costs associated with legally protecting your company, such as registering trademarks or protecting your intellectual property. You may need to pay a fee to obtain this protection and hire experts to carry out the necessary legal procedures.

It is important to consider these legal and consulting costs when planning your company incorporation in Dubai. It is recommended to consult with our experts to provide appropriate legal advice and accurate cost estimates according to the individual situation of your company.

Fees for obtaining business licenses

The costs of obtaining business licenses in the UAE vary based on several factors, including the type of company and the sector in which it operates. Here are some examples of fees for obtaining business licenses in some of the major emirates:

Dubai: In Dubai, business licensing costs include company licensing and renewal fees, company registration and establishment costs, and foreign trade permit fees if this is within the company’s activity. These fees vary depending on the type of company and the sector it belongs to.

Abu Dhabi: In Abu Dhabi, business licensing costs include company licensing and renewal fees, company registration and establishment fees, and foreign trade permit fees if this is part of the company’s activity.

Sharjah: In Sharjah, business licensing costs vary depending on the type of company and the sector in which it operates.

Legal and administrative procedures for establishing the company

Here are general steps for the basic legal and administrative procedures for establishing a company in the UAE:

Choose the type of company: Determine the type of company you would like to establish, such as a limited liability company (LLC), public joint stock company (PJSC), or private joint stock company (PSC), according to your needs and business goals.

• Choosing a company name: Choose a suitable name for the company and make sure it is available and does not conflict with the names of other existing companies.
• Preparing legal documents: Prepare the legal documents required to establish the company, such as approval of the company’s articles of association, shareholder contracts, and partner contracts.
• License application: Submit an application to obtain a company license from the relevant regulatory authority in the emirate in which you wish to establish the company, such as the Department of Economic Development.
• Payment of fees: Pay the fees required to license the company and any other related fees, such as registration fees and foreign trade permit fees if this is part of the company’s activity.
• Company establishment: After approving the company license and paying the fees, complete the company establishment procedures and officially register it in the relevant commercial registries.
• Obtaining other licenses: You may need to obtain other licenses or permits specific to the company’s activity, such as a building license or a food and beverage license, depending on the company’s activity and the requirements of government agencies.

Taxes and insurances required when establishing the company

When establishing a company in the UAE, there are taxes and insurances that may be required according to current government laws and regulations. However, please note that the following information is based on general knowledge and may change over time. Therefore, it is best to consult a financial advisor or professional accountant to obtain accurate information and updates about current taxes and insurances in the UAE.

Corporate taxes:

• Income tax: Companies in the UAE may be subject to income tax. However, the tax system is applied only at the federal level at the moment, and not in all emirates. Please review current tax laws to check your company’s tax obligations and potential exemptions.
• Value Added Tax (VAT): VAT was introduced in the UAE in 2018, and applies to specified goods and services. Businesses registered for VAT must file reports and pay the tax in accordance with the law.
• Social Insurance: In the UAE, social insurance contributions are imposed on workers and employees. These insurances include personal accident, disability, health and employment insurance.

It is recommended to contact the relevant government authorities, such as the Tax Authority and insurance authorities, to obtain updated and detailed information about the taxes and insurances required in your specific emirate and the type of company you wish to establish.

Initial marketing strategies and their costs

There are many initial marketing strategies you can adopt when starting to market your company or product. The costs of these strategies vary based on the industry you work in and the size of your marketing budget. Here are some initial marketing strategies and some aspects of their costs:

1- Create a website: Creating a website for your company is considered an essential investment in digital marketing. The cost of website design and development depends on a range of factors such as the size of the website, the functionality required and the complexity of the design. You can use off-the-shelf website building platforms like WordPress to save on development costs.

2- Social media marketing: You can use social media platforms such as Facebook, Instagram, and Twitter to promote your company and products. Social media marketing can be fairly free, but you may need to budget for paid ads and post promotion.

3- Create valuable content: Create valuable content such as articles, blogs, educational videos, and interactive content. You can create the content yourself or hire professional content writers. The cost of creating content depends on its complexity and content specialization.

4- Online advertising: You can use online advertising such as Google Ads and ads on social media to reach a wider audience. The cost of online advertising depends on the advertising style and the size of the advertising campaign.

5- Email marketing: You can build a mailing list to communicate directly with potential customers and current customers. Email marketing services may cost a monthly fee or depend on the number of recipients.

As a thriving international economic centre, the UAE is an ideal destination for establishing businesses thanks to its stable business environment and innovative legislative resources. The costs of establishing a company in the UAE depend on several factors, including the type of company and the amount of capital required. Although there are startup costs to set up, investing in this process can be a great investment in the future, as the UAE offers multiple opportunities for economic growth and expansion. While adhering to local directives and regulations, investors can benefit from the tax facilities and economic benefits that the UAE offers. Therefore, establishing a company in the UAE is an important investment that can contribute to long-term success and sustainability.

Frequently asked questions about what are the costs of establishing a company in the UAE: