The cost of setting up a business in the UAE ranges from roughly AED 8,500 to over AED 100,000 in your first year, depending on your company structure, location, and how many people you need to employ. The wide range exists because a solo freelancer in Sharjah and a trading company in DMCC have fundamentally different setups.
Here's a transparent breakdown of every cost you'll encounter, based on real 2026 pricing.
Total Cost Summary
Before we get into the details, here's the big picture:
| Setup Type | First-Year Cost | Ongoing Annual Cost |
|---|---|---|
| Solo freelancer (free zone, Sharjah) | AED 8,650 – 11,250 | AED 4,800 – 7,200 |
| Small team of 3 (free zone, Dubai) | AED 18,500 – 35,000 | AED 12,000 – 18,000 |
| Mainland LLC (Dubai, 1 visa) | AED 30,000 – 60,000 | AED 20,000 – 40,000 |
| Trading company (DMCC/JAFZA, 5 visas) | AED 45,000 – 80,000 | AED 25,000 – 45,000 |
These ranges include license fees, visa processing, government fees, and basic office requirements. They don't include optional costs like PRO services, accounting software, or marketing.
Cost Breakdown: Free Zone Company
Free zones are the most popular route for entrepreneurs, consultants, and online businesses. Here's every cost you'll hit:
1. Trade License Fee
This is the annual fee for your business license. It varies by free zone and business activity:
| Free Zone | License Fee/Year |
|---|---|
| Shams (Sharjah) | AED 5,750 |
| RAKEZ (RAK) | AED 7,500 |
| SRTIP (Sharjah) | AED 8,110 |
| DWTC (Dubai) | AED 10,020 |
| SPC (Sharjah) | AED 10,075 |
| JAFZA (Dubai) | AED 10,500 |
| Meydan (Dubai) | AED 11,500 |
| KEZAD (Abu Dhabi) | AED 11,150 |
| IFZA (Dubai) | AED 12,750 |
| DMCC (Dubai) | AED 15,000 |
This is a recurring annual cost. You pay it at setup and again every year at renewal (usually at a slightly lower rate).
2. Office Space
Some free zones include a virtual address in the license fee. Others require a separate payment:
- Virtual address (included): AED 0 — available at Shams, RAKEZ, SRTIP, DWTC, SPC, JAFZA, KEZAD, Meydan, IFZA
- Flexi desk (required): AED 6,500/year at DMCC
- Physical office: AED 15,000 – 80,000/year depending on zone and size
If a free zone includes a virtual address, it means you get a registered business address and can receive mail, but you don't have physical desk space. For most service-based businesses, this is sufficient.
3. Visa Processing
Every person who needs a UAE residence visa under your company license incurs these costs:
| Fee | Cost Per Person |
|---|---|
| Visa processing fee | AED 2,000 – 3,500 |
| Medical fitness test | AED 300 – 350 |
| Emirates ID | AED 370 |
| Total per visa | AED 2,670 – 4,220 |
The visa processing fee varies by free zone — Shams charges AED 2,018; DMCC charges AED 3,500. Medical and Emirates ID fees are government-set and fairly consistent across all free zones.
4. One-Time Government Fees
These are paid once during initial setup:
| Fee | Cost |
|---|---|
| Establishment card | AED 200 – 350 |
| Company registration | Usually included in license fee |
| Activity selection | AED 0 – 2,000 (first activity free at most zones) |
5. Example: Total First-Year Cost
Here's the math for a real scenario — a solo consultant setting up at Shams with one visa:
| Item | Cost |
|---|---|
| License fee | AED 5,750 |
| Virtual address | AED 0 (included) |
| Visa processing | AED 2,018 |
| Medical test | AED 320 |
| Emirates ID | AED 370 |
| Establishment card | AED 200 |
| Total | AED 8,658 |
That's everything — you now have a legal company, a UAE residence visa, and an Emirates ID. From here, you can open a bank account, sign contracts, and start operating.
The same setup at DMCC would cost AED 25,940 (because of the higher license fee, visa costs, and mandatory flexi desk). That's a 3x difference for the same functional outcome.
Cost Breakdown: Mainland Company (Dubai)
Mainland companies are more expensive to set up and maintain, primarily because of the physical office requirement. Here's the breakdown:
Setup Costs
| Item | Cost |
|---|---|
| DED trade license | AED 10,000 – 15,000 |
| Trade name reservation | AED 620 |
| Initial approval | AED 120 |
| Memorandum of Association (MOA) | AED 2,000 – 5,000 |
| Office lease (Ejari) | AED 15,000 – 50,000/year |
| Visa processing (1 person) | AED 3,000 – 5,000 |
| Medical + Emirates ID | AED 690 |
| PRO services | AED 5,000 – 15,000 |
| Total first year | AED 36,430 – 91,430 |
Why Is Mainland So Much More Expensive?
The single biggest cost difference is the office lease. Dubai requires a physical office with a registered Ejari for mainland companies. Even a shared desk arrangement or serviced office can cost AED 15,000 – 25,000/year.
The other major cost driver is PRO services. Mainland setup involves multiple government departments (DED, MOHRE, immigration, typing centers), and most people hire a PRO to navigate the process rather than spending weeks doing it themselves.
When Does Mainland Make Sense?
Despite the higher cost, a mainland license is necessary if:
- You need to sell products directly in the UAE (retail, wholesale)
- You're bidding on UAE government contracts
- Your business activity requires a mainland presence (restaurants, medical clinics, construction)
- You need unrestricted access to the local market
Hidden Costs Most Guides Don't Mention
Bank Account Opening
Opening a corporate bank account is free at most banks, but many require:
- Minimum deposit: AED 10,000 – 50,000 (held in the account, not a fee)
- Monthly maintenance: AED 50 – 200/month
- Reference letter: Some banks require a reference from an existing customer or your free zone authority
The real cost of bank account opening isn't money — it's time. The process takes 2–8 weeks, and some banks reject applications from newer free zones or unfamiliar business activities. DMCC and JAFZA have the highest bank approval rates; newer free zones sometimes face challenges.
Accounting and Compliance
Corporate tax (9% on profits above AED 375,000) was introduced in June 2023. This means you now need:
- Accounting software or bookkeeper: AED 2,000 – 10,000/year
- Annual tax return filing: AED 1,500 – 5,000 (through an auditor or accountant)
- VAT registration (if revenue exceeds AED 375,000): Free to register, but requires quarterly filing — typically AED 1,000 – 3,000/year if you hire an accountant
Health Insurance
Health insurance is mandatory for all UAE visa holders. Costs depend on the emirate and plan:
- Abu Dhabi: Government-mandated basic plan from AED 600/year
- Dubai: DHA-compliant plan from AED 650/year
- Other emirates: Varies, generally AED 500 – 1,000/year for basic coverage
Attestation and Translation
If you need to use foreign documents in the UAE (educational certificates, powers of attorney, company documents from your home country), you'll need attestation and sometimes translation:
- Document attestation: AED 150 – 500 per document
- Translation (per page): AED 50 – 150
Renewal Costs (Year 2 Onwards)
Your year 2 cost is lower than year 1 because you skip one-time fees (establishment card, initial visa processing). But you'll still pay:
| Item | Annual Cost |
|---|---|
| License renewal | AED 4,800 – 14,200 (varies by zone) |
| Visa renewal (per person) | AED 500 – 1,500 |
| Health insurance (per person) | AED 500 – 1,000 |
| Office renewal (if applicable) | AED 0 – 6,500 |
| Accounting/compliance | AED 2,000 – 10,000 |
Cost Comparison: Cheapest to Most Expensive
Here's a side-by-side of the 5 most popular setups, showing real total costs:
Solo Entrepreneur (1 visa)
| Route | Year 1 | Year 2 | Year 3 | 3-Year Total |
|---|---|---|---|---|
| Shams (cheapest) | AED 8,658 | AED 4,800 | AED 4,800 | AED 18,258 |
| RAKEZ | AED 10,770 | AED 6,800 | AED 6,800 | AED 24,370 |
| IFZA (Dubai) | AED 16,840 | AED 11,000 | AED 11,000 | AED 38,840 |
| DMCC (premium) | AED 25,940 | AED 14,200 | AED 14,200 | AED 54,340 |
| Mainland (Dubai) | AED 45,000+ | AED 30,000+ | AED 30,000+ | AED 105,000+ |
Team of 3 (3 visas)
| Route | Year 1 | Year 2 | Year 3 | 3-Year Total |
|---|---|---|---|---|
| Shams | AED 14,074 | AED 4,800 | AED 4,800 | AED 23,674 |
| RAKEZ | AED 16,910 | AED 6,800 | AED 6,800 | AED 30,510 |
| DMCC | AED 34,320 | AED 14,200 | AED 14,200 | AED 62,720 |
How to Minimize Setup Costs
Start in a cheaper free zone, upgrade later. You can always move to a more prestigious free zone once your business is generating revenue. Many entrepreneurs start in Shams or RAKEZ and move to DMCC or a mainland license after 1–2 years.
Get only the visas you need. Each visa adds AED 2,670 – 4,220. If you have team members who already have their own UAE visas (through a spouse's sponsorship, for example), you don't need to process one under your company.
Negotiate office costs. If a free zone requires an office, ask about their cheapest option or any startup packages. Many zones offer discounted first-year rates.
Skip PRO services for free zone setup. Most free zone setups are straightforward enough to handle yourself. Save the PRO budget for more complex tasks like mainland licensing or bulk visa processing.
Time your setup strategically. Some free zones run promotions during quieter months (July–August, Ramadan). A 10–20% discount on the license fee can save AED 1,000 – 3,000.
Next Steps
The best way to figure out your exact cost is to compare the specific free zones that match your business activity. Use our free comparison tool to see total first-year costs for any two free zones side by side, or ask our AI assistant for a personalized cost estimate based on your situation.
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