Dubai mainland
company formation cost

Dubai mainland company formation cost

Establishing a business in Dubai comes with unique advantages, but it's essential to keep in mind the financial aspects too. This guide explains the costs concerning setting up a mainland company in Dubai , including the company’s licensing, office space, visas, and other pertinent items.

Grasping the Dubai Mainland Company Formation

With a Mainland company setup in Dubai, the business can function both within UAE and internationally. It’s different from free zone companies because mainland entities can do business in any part of UAE without any hindrances. But as with any other type of company, there are certain costs and regulations that have to be met to set up such a company.

Key Costs Involved in Mainland Company Setup

1. Business License Costs:

Mainland businesses operate under the jurisdiction of The Department of Economic Development (DED). The charges differ with the line of business as discussed below:

1. Commercial Licence: AED 10,000- 35,000
2. Commercial Licence: AED 10,000- 35,000

Some other types of licenses, for example those for the medical or educational services, may attract extra charges due to additional approvals from the concerned bodies.

2. Rental Cost of Office Space

A physical office is compulsory for companies based on the mainland. Rental prices depend on the area and the space:

• Prime Areas (e.g., Downtown Dubai, Business Bay) : AED 80,000 to AED 100,000 per annum
• Secondary Areas (e.g., Deira, Al Qusais) : AED 30,000 to AED 50,000 per annum
• Secondary Areas (e.g., Deira, Al Qusais) : AED 30,000 to AED 50,000 per annum

3. Local Sponsor Payments

For some types of businesses, a local sponsor (UAE national) who holds 51% of the company shares is a must. The annual sponsorship fee is usually between AED 10,000 and AED 25,000. However, this depends on the particular business activity and the terms of the agreement.

4. Immigration And Visa Expenses

Arranging visas for investors and employees comes with multiple costs:

• Investor Visa: AED 3,000 – AED 6,000
• Employee Visa: AED 5,000 – AED 7,500 per employee
• Employee Visa: AED 5,000 – AED 7,500 per employee
• Employee Visa: AED 5,000 – AED 7,500 per employee

5. Legal Fees and Documentation

Legal services have to obtain and notarize the Mortgage of Agreement (MOA) and other documents:

• MOA Drafting and Notarization: AED 1,200 – AED 3,000
• Trade Name Registration: AED 620 – AED 735
• Court Agreement Attestation: AED 500 – AED 1,000

6. Administrative Costs and Government Services

• Also, some administrative costs related to Government are:
• Initial Approval from DED: AED 120 – AED 235
• Market Charge: 5% of the yearly reserve office rent for shops. For warehouses, it is 20%
• Registration with Ministry of Economy: AED 3,000

7. Setting Up a Company Bank Account

It is compulsory to establish a corporate bank account.

• Basic Balance Constraints: AED 50,000 – AED 100,000
• Bank Charge Processing: AED 1,000 – AED 2,000

8. Regular Operating Expenses

• Routine upkeep costs cover:
• License Renewal: AED 10,000 – AED 15,000
• Health Insurance for Employees: AED 700 – AED 5,000 per employee
• Accountinge and Auditing: AED 10,000 – AED 50,000
• Public Relations Officer (PRO) Services: AED 8,000 to AED 15,000

Total Estimated Cost for Mainland Company Setup

• Business License: 10,000 – 35,000
• Office Space Rental: 30,000 – 100,000
• Local Sponsor Fees: 10,000 – 25,000
• Visa and Immigration: 3,500 – 7,500 Per Individual
• Legal and Documentation: 2,000 – 5,000
• Government and Administrative: 5,000 – 10,000
• Bank Account Setup: 1,000 – 2,000
• Ongoing Operational Costs: 10,000 – 50,000 per annum

Note: These figures are estimates and may change according to the business’s needs and prevailing market conditions.

Frequently Asked Questions (FAQs)

Q1: Can a foreigner own 100% of a mainland company in Dubai?

Yes, recent reforms have streamlined processes granting 100% foreign ownership in many sectors and local sponsorship is no longer required in some cases.

Q2: How long does it take to set up a mainland company in Dubai?

It usually takes anywhere between 4 to 6 weeks with varying degrees of business complexity and document processing efficiency.

Q3: Are there any tax incentives for businesses located in Dubai?

Employers in Dubai do not incur personal taxes. There is corporate tax at 9% for businesses exceeding AED 375,000 in annual revenue, which is levied only on the profit above this threshold.

Q4: Is an office required for a physical location company?

Yes, mainland companies setup in Dubai are required to maintain a physical office. Some specific regulations may allow virtual offices, but generally, these are not accepted.

Q5: What are the requirements regarding visas for employees?

Regular employees are required to have a work visa which includes medical examination, issuance of Emirates ID, and health insurance. The fee depends on how many employees there are and the visa type

Conclusion

After the expenses and the guidelines accompanying setting up a company in Dubai are properly researched, the entrepreneurs would be able to better manage the process. It is wise to contact business setup professionals to guarantee smooth and amiable processes for business registration in Dubai.