Dubai’s free zones are a game-changer for entrepreneurs. Gone are the days of a purely trading focus – these zones have morphed into IT and knowledge hubs, diversifying the UAE’s economy in a big way. Did you know they are projected to contribute a whopping AED 250 billion to GDP by 2030?
The allure is undeniable – Dubai free zone business setup is not only easy but also offers ownership advantages and a prime location. Countless success stories have taken flight from these very zones!
But before you take off, let’s talk about finances. This guide is designed specifically for entrepreneurs like you, who want to explore the factors that influence the cost of free zone company formation in Dubai. With this knowledge, you will be empowered to make informed decisions for your exciting entrepreneurial adventure.
So, let’s get started!
Advantages of Setting Up a Free Zone Company in Dubai
Here are the compelling advantages that Dubai free zones offer entrepreneurs aiming to establish a foothold in the Middle East and beyond:
- Be Your Own Boss: Not just limited to Dubai, UAE free zone company formation offers 100% ownership across various free zones. This gives you complete control over your entrepreneurial endeavors.
- Freedom of Mixed Business Activities: unlike mainland companies in UAE free zone companies have benefit of choosing mixed activities such as trading and service together in one license. & Match Business Activities.
- Repatriating of Profits: Enjoy the liberty to repatriate all your hard-earned earnings back home without having to withhold tax on outwards remittances. This ensures financial flexibility and simplifies international transactions.
- Free zones within the UAE have emerged as a powerful driver of international trade and investment, because of their strategic tax benefits. Here’s a quick breakdown:
1 – Streamlined Corporate Tax: The UAE introduced corporate tax in June 2023, where corporate tax was also applied to free zone businesses. However, qualifying income could still benefit from a 0% tax rate. You could achieve this by becoming a Qualifying Free Zone Person (QFZP). This translates to significant tax savings, provided you meet the specific qualifying criteria. Our team at Avyanco UK can guide you through this process to ensure you maximize this benefit.
2 – Eradicating Import and Export Duties: Free zones typically eliminate import and export duties. This translates to substantial cost reductions for trading companies, enhancing your overall operational efficiency.
3 – Bypassing Withholding Taxes: Free zones eliminate withholding taxes on dividends and interest. This simplifies the repatriation process for profits sent back to foreign parent companies or investors, ensuring a smoother flow of funds.
4 – Extended Tax Holidays: Many free zones offer extended tax holidays, granting you these advantages for a set period with the possibility of renewal. This provides valuable time to establish your business and solidify your financial footing before starting to pay taxes.
- Global Reach, Local Roots: Dubai’s strategic location makes it a gateway to international markets. It provides effortless access to these markets, fostering international trade opportunities.
- Connected to the World: Worry-free logistics and communication within Dubai’s free zones. State-of-the-art infrastructure ensures seamless global connectivity, empowering you to reach customers within the UAE and worldwide.
- Fast-Track Your Success: Streamlined processes and minimal paperwork characterize free zone business setups. Efficient setup processes with minimal paperwork generally led to lower administrative fees compared to a complex setup process.
- Simplify Your Setup: Forget extensive documentation and bureaucratic hurdles. The convenient registration process makes setting up your dream business in Dubai a smooth and straightforward experience.
- Operate with Freedom: Enjoy unrestricted foreign exchange, allowing you to manage your finances in a way that best suits your needs.
- Focus on What Matters: No logistical headaches here! Dubai’s infrastructure ensures a smooth and efficient operational environment, letting you to focus on what truly matters – growing your business.
Types of Costs Involved in Company Setup in Dubai free zones:
Setting up a company in Dubai Free Zones involves several types of costs that should be carefully considered. Below are some key expenses along with possible costs associated:
| Items | Description | IFZA | Meydan | DUQUE | Annual/Recurring |
| License & Registration Cost with 0 Visa Allocation | Dubai Business Licence | £ 3860 | £ 3774 | £ 3774 | Annual/Recurring |
| License & Registration Cost with 1 Visa Allocation | Dubai Business Licence | £ 4291 | £ 4172 | £ 4151 | Annual/Recurring |
| License & Registration Cost with 2 Visa Allocation | Dubai Business Licence. | £ 4722 | £ 4571 | £ 4528 | Annual/Recurring |
| License & Registration Cost with 3 Visa Allocation | Dubai Business Licence. | £ 5154 | £ 4970 | £ 4906 | Annual/Recurring |
| Immigration Card | Required only for Visa Allocation Packages. ( 1 Visa , 2 Visa, 3 Visa) | £ 102 | £ 102 | £ 90 | Annual/Recurring |
| Visa Cost | Associated with obtaining employment visas for you and your employees, as well as investor and partner visas. | £ 184 + Medical & EID extra. | £ 172 + Medical & EID extra. | £ 172 + Medical & EID extra. | Every 2 years /Recurring |
| Bank Account Opening | Dubai Business Bank Account. | £ 647 – £ 3234 | £ 647 – £ 3234 | £ 647 – £ 3234 | One Time |
| Office Rent Costs | Renting office space can be a significant expense, ranging from flexi-desks to full-fledged offices. | Upto 3 Visa Physical Space is not mandatory.
| Upto 6 Visa Physical Space is not mandatory.
| Upto 3 Visa Physical Space is not mandatory. | Monthly/Recurring |
| Hidden Costs | It’s crucial to be aware of potential hidden costs, such as various administrative expenses. | £ 0
| £ 0
| £ 0
| Annual/Recurring (Miscellaneous costs can vary, but budgeting an additional 10-20% of total setup costs is prudent.) |
For the most accurate and up-to-date information on costs, it’s advisable to consult with professional business advisors. Avyanco UK– who is the top rated business setup consultant in Dubai offering personalized advice tailored to the specifics of your business plan.
Cost Comparison with Dubai Mainland Setup
Determining whether a mainland setup or a free zone company formation in Dubai is better depends on various factors. It includes the nature of your business, your budget, and your long-term goals.
But, today we are just talking about costs! Here’s a comparison table focusing solely on costs and factors related to the cost of Dubai free zone company formation versus the mainland:
| Aspect | Dubai Free Zone Setup | Dubai Mainland Setup |
| Legal Requirements | Simplified processes | Simplified processes |
| Operational Flexibility | 100% foreign ownership, No currency restrictions, Flexible hiring | 100% foreign ownership, No currency restrictions, Flexible hiring, Labor laws apply |
| Initial Setup Costs | License & Registration (from £ 3718) | License & Registration (from £ 3981 ) + Office Rent (£ 7747 – £ 25832/year) |
| Annual Renewal Fees | License (from £ 2637), Immigration Card (£ 560), Visa (£ 851) | License (from £ 3983), Immigration Card (£161), Labour Update (£ 140) Market Fees (5% of office rent) |
| Visa Cost | Visa: £ 808 + Medical & EID extra.
| Visa: £ 538
|
| Corporate Tax | 0% on qualified business activities. 9% on non-qualified activities over profit of £ 80727 | 9% on all type of business over profit of £ 80727 |
| Bank Account Opening | Easy process | Easy process |
| Office Space | Inside Free Zone | Anywhere in Dubai Mainland |
| Ease of Setup | Streamlined (7-14 days) | Streamlined (4-5 days) |
| Total Estimated Cost | From £ 3118 (min) | £ 11123 – £ 36754 |
Ultimately, the choice between a mainland company formation in Dubai and a Free Zone setup depends on your specific business needs, growth strategy, and financial considerations. It’s essential to carefully evaluate the pros and cons of each option and consult with legal and business advisors to make an informed decision.
Why Choose Avyanco UK?
Dubai free zones are all the rage, offering businesses a haven with ownership freedom, tax breaks, and a location that screams “global domination”! But hold on there, free zone business setup can feel like navigating a maze.
Permits? Licenses? Choosing the right zone from a seemingly endless list? Don’t worry, that overwhelmed feeling is practically a rite of passage. That’s where Avyanco UK swoops in!
Avyanco UK is your one-stop shop for all things related to UAE free zone company formation. Think of us as your personal business guide, helping you through the ins and outs, from zone selection to ensuring you are squeaky clean with compliance.
Every entrepreneur’s journey is unique. A cookie-cutter approach just won’t cut it. That’s why we take the time to understand your vision, your goals, and basically, what makes your business tick. Then, we tailor our services to fit you perfectly – be it free zone, mainland, or offshore. No hidden fees here, folks. We believe in transparency and give you a clear breakdown of the costs upfront, so you can make informed decisions without any nasty surprises.
Building your business empire is exciting! Let Avyanco UK handle the setup nitty-gritty, so you can focus on what truly matters – brainstorming your next million-dollar idea. Call us today!
FAQs
1 – Initial setup fees for a Dubai free zone company?
It ranges from £ 3717 (around USD 4697) to £ 11850 ( around USD 14975) depending on the Free Zone, license type, and number of visas.
2 – Annual operating costs for maintaining a Dubai free zone company?
Vary based on office space size, number of employees, and required services. Expect costs for license renewals, rent, visa renewals, and administrative fees.
3 – Any Hidden costs when setting up in a Dubai free zone?
There is no hidden cost.
4 – Factors influencing total setup costs in a Dubai free zone?
- Chosen free zone (each has its fee structure)
- Business License Type (e.g., commercial, industrial)
- Number of Visas (affects cost)
- Office Space (size and location significantly impact rent)
5 – Visa requirements for employees and shareholders in Dubai free zones and their cost implications?
- Requirements vary by free zone and business activity.
- Each visa application incurs a government processing fee.
- The number of visas (employees and shareholders) directly impacts setup costs
6 – With so many Free Zones, how do you choose the right one?
Dubai boasts over 40 free zones, each specializing in specific industries or activities. Popular options include Dubai Internet City (DIC) for tech ventures, Dubai Media City (DMC) for media businesses, and Jebel Ali Free Zone (JAFZA) for a broader range of sectors. The Free Zone you select can influence your license cost and other fees. Avyanco UK can help you identify the most suitable zone based on your business needs – simply contact us!
7 – How much does a free zone license typically cost?
Free zone business license fees vary depending on the chosen zone, your business activity, and the type of license you require. Generally, expect costs to range from £ 2779 (around USD 3,500) to £ 10772 (around USD 13,600) or more per year.
8 – Are there additional expenses beyond the license fee?
Yes, there may be additional costs for services like visa processing, medical testing, and registration with relevant authorities. Some free zones also charge annual maintenance fees.
9 – How much should you budget for visas for yourself and your employees?
The cost of visas depends on the number you need, their validity period, and the type of visa. Typically, expect to pay several thousand dirhams per visa.
10 – What about opening a corporate bank account?
The minimum balance requirements and fees for opening a corporate bank account can vary depending on the bank you choose. Generally, it’s a few thousand dirhams.
11 – Can you estimate the total setup cost?
Absolutely! Consider the license fee, visa costs, bank account opening fees, and any other anticipated expenses. Remember, a buffer for unforeseen costs is always advisable.
12 – Ways to save money on Free Zone setup?
Some free zones offer discounts for startups or specific industries. Consider co-working spaces instead of dedicated offices, or explore online banking solutions with lower fees.
13 – Who can help you with more specific cost details?
You can contact the relevant Dubai Free Zone Authority directly. However, going through a business setup consultant can make things easy and quicker. So consult Avyanco UK – a top-rated business setup consultant in the UK. They can provide specific cost details and guidance tailored to your unique business needs as well as budgets.
Get started today!