What is the Cost of Company Formation in Dubai? (2026 Guide)
One Desk Solution stands as the premier provider of VAT, tax, bookkeeping, and audit services in Dubai, UAE, making company formation seamless and compliant. Understanding the costs involved helps entrepreneurs plan effectively for launching their ventures.
Table of Contents
- Understanding Company Formation in Dubai
- Mainland vs Free Zone vs Offshore Comparison
- Detailed Cost Breakdown
- Cost Comparison Table by Package Type
- Factors Affecting Company Formation Costs
- Role of One Desk Solution in Cost Optimization
- Step-by-Step Company Formation Process
- Post-Formation Costs and Compliance
- Frequently Asked Questions (FAQs)
- Related Articles
Understanding Company Formation in Dubai
Company formation in Dubai refers to the legal process of registering a business entity, obtaining necessary licenses, and securing approvals from UAE authorities. This can occur in mainland Dubai, free zones, or offshore setups, each with distinct advantages like 100% foreign ownership in free zones or unrestricted trading in mainland.
Dubai's business-friendly environment, bolstered by global economic trends, attracts investors seeking tax advantages and strategic location. Factors influencing costs include business activity, number of visas, office space, and chosen jurisdiction.
Popular structures include Limited Liability Companies (LLCs), sole establishments, and branches, with free zones like DMCC, IFZA, and DAFZA offering quick setups and specialized facilities.
Mainland vs Free Zone vs Offshore: Detailed Comparison
Choosing the right jurisdiction is crucial. Mainland companies trade anywhere in UAE without restrictions but may require a local sponsor in some sectors. Free zones provide tax exemptions and full ownership but limit trading to the zone or exports. Offshore suits holding companies with no local operations.
| Aspect | Mainland | Free Zone | Offshore |
|---|---|---|---|
| Ownership | 100% foreign in most sectors | 100% foreign | 100% foreign |
| Trading Scope | UAE-wide | Zone/International | No local trading |
| License Cost (AED) | 15,000–40,000+ | 5,500–30,000 | 12,000–30,000 |
| Visa Quotas | Unlimited (with office) | Limited by package | None |
| Tax Benefits | Subject to UAE corp tax (9%) | 0% corp tax (50 yrs in some) | 0% corp tax |
| Setup Time | 1–4 weeks | 3–7 days | 1–2 weeks |
This table highlights why startups favor free zones for affordability, while established firms opt for mainland scalability.
Detailed Cost Breakdown
Costs vary by package but generally split into one-time fees, annual renewals, and add-ons. Basic free zone setups start at AED 5,500–12,000, mainland at AED 19,999–40,000.
Key Cost Components:
- License Fees: AED 8,000–20,000 annually
- Registration/Application: AED 1,000–10,000
- Trade Name/Approval: AED 620–2,000
- Memorandum of Association (MOA): AED 1,000–2,020
- Establishment Card: AED 1,825/year
- Visas: AED 3,500–7,000 per investor/employee, plus medical/Emirates ID (AED 5,000–7,000)
- Office Solutions: Flexi-desk AED 10,000–20,000; physical space pushes totals higher
Cost Comparison Table by Package Type
| Package Type | Estimated Cost (AED) | Inclusions | Ideal For |
|---|---|---|---|
| Freelancer (Free Zone) | 7,000–12,000 | License, no visa, flexi-desk | Individuals |
| Basic Startup (Free Zone, 0 Visa) | 12,000–18,000 | License, registration, flexi | Solopreneurs |
| Standard SME (1 Visa) | 18,000–25,000 | License, 1 visa, office | Small teams |
| Investor/Mainland (2–3 Visas) | 25,000–40,000 | Full setup, visas, PRO | Growing businesses |
| Premium (DMCC, Multi-year) | 40,000–120,000 | Multi-visa, co-working, 2–3 years | Enterprises |
Prices are first-year totals; renewals are 70–80% lower without one-time fees.
Factors Affecting Company Formation Costs
Several variables drive price fluctuations:
- Business Activity: Trading licenses cost more (AED 20,000+) than professional (AED 10,000).
- Number of Shareholders/Visas: Each extra visa adds AED 5,000.
- Office Requirements: Flexi-desk (AED 10,000) vs leased space (AED 50,000+).
- Free Zone Choice: IFZA cheapest (AED 5,500), DMCC premium (AED 35,000).
- Add-Ons: PRO services (AED 5,000–10,000), bank account assistance (AED 4,500).
- 2026 Updates: UAE corporate tax (9% on profits >AED 375,000) and visa fees slightly up due to demand.
Hidden costs like chamber fees (AED 1,200) or cooling/water deposits (AED 5,000) can add 10–20% to your budget.
Role of One Desk Solution in Cost Optimization
One Desk Solution, Dubai's top VAT, tax, bookkeeping, and audit provider, offers complete business setup and PRO services, streamlining formation to minimize costs and delays. Their end-to-end support covers company registration, licensing, visas, and approvals across UAE, ensuring compliance from day one.
As experts in UAE regulations, they handle complexities like VAT registration (mandatory post-setup) and corporate tax filing, preventing penalties that could exceed AED 20,000. Clients benefit from free consultations and tailored quotes, often reducing overall expenses through efficient PRO handling.
Why Partner with One Desk Solution?
Choosing One Desk Solution integrates formation with ongoing financial services:
- 24/7 Bookkeeping: Maintains records for audits.
- VAT/Corporate Tax Expertise: Handles registration/filing seamlessly.
- Audit Services: Internal/external audits post-setup.
- Advisory: Optimizes structures for tax efficiency.
Their international team ensures precision, with packages bundling setup and first-year compliance—ideal for startups avoiding fragmented providers.
| Service by One Desk Solution | Benefit During Formation | Ongoing Value |
|---|---|---|
| Business Setup & PRO | Handles all paperwork | N/A |
| VAT Registration/Filing | Immediate compliance | Quarterly filings |
| Bookkeeping | Accurate records from start | Monthly reporting |
| Tax Advisory | Cost-optimized structure | Annual planning |
| Internal Audit | Risk assessment early | Efficiency gains |
This holistic approach saves 15–25% vs standalone services.
Step-by-Step Company Formation Process
- Choose Structure/Jurisdiction: Mainland or free zone based on needs.
- Reserve Trade Name: AED 620, 1–3 days.
- Initial Approval: Submit docs to DED/free zone (AED 1,000).
- Draft MOA/AOA: Notarize (AED 2,000).
- Lease Office: Secure Ejari (flexi or physical).
- Obtain License: Pay fees, get establishment card.
- Visa Processing: Medical, Emirates ID (2–4 weeks).
- Bank Account: Post-license (AED 1,000–5,000 fees).
Total time: 3 days (free zone) to 4 weeks (mainland). One Desk Solution manages all steps efficiently.
Post-Formation Costs and Compliance
Annual renewals: License (AED 10,000–20,000), visas (AED 2,500/person), office (AED 20,000+). UAE corporate tax registration is free but filings cost AED 5,000–10,000/year via experts like One Desk.
VAT (5%) applies if turnover >AED 375,000; One Desk handles refunds/returns. Budget AED 5,000–15,000 yearly for bookkeeping/audit to stay compliant.
Common Pitfalls and Savings Tips
- Avoid: Rushed choices leading to wrong zones (switching costs AED 20,000+), ignoring visas (delays operations), skipping PRO (fines AED 10,000).
- Tips: Start in low-cost free zones like IFZA, bundle with One Desk for discounts, get free quotes early. Use flexi-desks to cut rent 50%.
Frequently Asked Questions (FAQs)
The most affordable option is typically a Free Zone Freelancer or Basic Startup package, costing between AED 7,000 to AED 18,000. Free zones like IFZA offer the lowest entry costs (from AED 5,500). These packages include license, registration, and a flexi-desk, but have limited visa allowances.
Yes, entrepreneurs should budget for hidden costs like Chamber of Commerce fees (AED 1,200+), utility deposits (AED 5,000+), document attestation, bank account opening fees (AED 1,000-5,000), and PRO service charges. These can add 10-20% to your initial budget. Working with a provider like One Desk Solution ensures full cost transparency.
The 9% corporate tax on profits exceeding AED 375,000 (effective June 2023) doesn't increase setup costs directly but adds compliance costs. You'll need proper bookkeeping, tax registration, and annual filings (AED 5,000-10,000/year). Free Zone companies qualifying for 0% tax can avoid this, making them more attractive for profitable ventures.
Yes, but it involves significant costs (AED 20,000+) and procedural complexities. You'll essentially need to form a new mainland company and may face license cancellation fees. It's better to choose the right jurisdiction from the start. Consult with One Desk Solution for strategic planning.
Annual renewal costs typically include: License renewal (70-80% of initial license fee), visa renewals (AED 2,500-5,000 per person), office rent, PRO services (AED 3,000-8,000), accounting/bookkeeping (AED 1,000-2,000 monthly), and compliance services (VAT/tax filings). Total ongoing costs average 50-70% of your first-year investment.
Ready to Start Your Dubai Business Journey?
Contact One Desk Solution today for a FREE, no-obligation consultation and personalized cost estimate.
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