Free zones in the UAE offer amazing benefits in terms of tax and ownership, but what is the Free Zone Company Setup Cost?
Like any business expense, this cost includes many variables such as the free zone you choose, licence types, and more. It also includes some one-time and other annual expenses.
So, we have created a list of components that affect your free zone company cost in the UAE. Read till the end to discover a few tips to reduce the cost of starting a free zone company.
Key Components Of Free Zone Company Cost In UAE
This price component breakdown helps you avoid underbudgeting and ensures a smooth, surprise-free business incorporation in the UAE free zone.
Registration and Application Fees (One-time)
Registering your company in the free zone is mandatory to get the incorporation certificate and the business licence. Each free zone has a one-time price for registration and application processing fees for administrative work and verifying your business activities.
This charge varies based on the type of free zone and ranges between AED 2,000 and AED 5,000. It is a one-time expense that is often non-refundable. However, it is important to check if the free zone authority bundles up this cost with the licence or charges separately.
Trade License Fee (Recurring)
A trade license is issued by the free zone authority to permit businesses to conduct operations in the free zone. This licence must be renewed annually, and thus is the largest recurring UAE free zone company setup cost.
The total price of the trading licence depends on the type of free zone, your business activities, and license type (trading, service, general, holding, or industrial). The ideal price ranges between AED 5,000 and AED 50,000 or even more.
Premium free zones such as DIFC (Dubai International Financial Centre) and ADGM (Abu Dhabi Global Market) have higher license fees due to their specialised regulatory environments and global image.
Share Capital Amount (One-time)
Share Capital is the amount a shareholder of the company must invest when registering a company. The amount varies based on the free zone and can be divided equally among the shareholders based on their shares.
Majority free zones don’t have a share capital requirement. However, a few free zones have them, and the amount can vary based on the business activity. The good news is that the share capital registered with the free zone can be used in business after incorporation.
If you are opting for a Dubai free zone company setup, you must know that a few freezones such as DMCC and DAFZA, have share capital requirements. This amount can start from AED 50,000 and can vary based on the free zone. Connect with a Dubai-focused PRO service company to get more guidance.
Office Space / Flexi-Desk Costs (Recurring)
A free zone company needs a physical office to register and operate. The type of office you choose impacts the number of visas you get and the free zone company cost in the UAE.
For Dubai free zone company setup, you can choose a flexi-desk or rent out a physical office.
- A flexi-desk is in a co-working space where you get access to a desk and meeting rooms to hold your client meetings. It is perfect for service-based companies, freelancers, and consultants. The rent for a flexi-desk can range between AED 7,000 and AED 10,000 per year.
- A physical office is your own rented space that you can lock and decorate to meet your brand image. It is perfect for client-facing businesses and needs a few team members operating in the office. The rent for an office can range between AED 15,000 and AED 25,000 per year.
- A warehouse of industrial units is necessary for businesses dealing with logistics, manufacturing goods, and import/export. The charges for industrial vary based on the space you rent. For example, the rent of warehouses in Jebel Ali Free Zone (JAFZA) is AED 3.96 / sqft for non-ac and AED 6.24 ac warehouse units (excluding VAT).
Establishment card and Visa Costs (Recurring)
An establishment card is issued by the immigrant authority of your area to acknowledge the existence of your company to issue visas. This card is essential to get visas for yourself, investors, team, and dependents. The validity of the establishment card is mostly 1-3 years, depending on your trade license. The average cost of an establishment card is between AED 1000 and AED 2000.
The number of visas depends on your trading licence and office space. For flexi-desk offices, you can apply for 1-3 visas. However, if you need a large in-office team, you must rent an office where visas are issued based on the office space; for example, 1 visa per 9 square metres.
The cost of a visa varies based on the region and other factors such as entry permit, medical test, Emirates ID, visa stamping, and status change. The average cost of visas ranges between AED 3,500 and 7,500 per visa.
Ancillary Costs
Apart from the big expenses, there are other factors that affect the free zone company cost in the UAE. Many PRO agencies often hide these expenses to sell their service, and later, these get you by surprise.
Here are a few ancillary costs that you should know before free zone company set up:
- Name registration: Trading names play a vital role in free zones. Therefore, many of these economic zones charge between AED 200 and AED 620 to officially check and register your trade name to avoid duplication.
- Document Attestation & Notarization: You must notarize your identification documents, necessary certificates, Memorandum of Association (MoA), Articles of Association (AoA), and more. This might cost anywhere between AED 500 and AED 3,000, depending on your home country and document type.
- Corporate bank accounts: A corporate bank account is a must for Dubai free zone company setup. In addition to the account opening charges (varying for different banks), most banks require a minimum balance that ranges between AED 10,000 and AED 50,000.
- Health insurance: All visa holders must have health insurance. For free zone companies, the employers must provide health insurance for their employees and their own dependents. The cost of insurance varies based on the organization.
Here’s a UAE free zone company setup cost breakdown:
| Services | Cost |
| Registration and Application Fees (One-time) | AED 2,000 to AED 5,000 |
| Trade License Fee (Recurring) | AED 5,000 to AED 50,000 |
| Share Capital Amount (One-time) (variable) | AED 50,000 or more |
| Office Space / Flexi-Desk Costs (Recurring) | |
| Flexi-desk | AED 7,000 to AED 10,000 per year |
| Physical office | AED 15,000 to AED 25,000 per year |
| Warehouse or industrial unit | Per sqft price varying for freezones |
| Establishment cost | AED 1000 to AED 2000 |
| Visa cost | AED 3,500 to 7,500 per visa |
Note: These are just estimates and can vary based on the choice of freezone and changes made by the freezone authorities. It doesn’t include the ancillary costs.
How To Reduce The UAE Free Zone Company Setup Cost?
Here are a few tips to reduce or avoid unnecessary expenses for company setup in Dubai or any other emirates of the UAE.
Find the right free zone
Your choice of free zone directly affects your recurring licence cost (the largest expense). Therefore, you should choose a free zone that aligns with your business and provides the best pricing.
Choose business activity wisely
If you choose the wrong business activity, you might need to re-register in the correct category and pay for the application fees again. Furthermore, the number of activities also increases the cost of trading licenses. Therefore, you should choose your business activities carefully.
Start with a flexi-desk or co-working spaces
Rent of an office is one of the highest and frequently recurring costs. So, unless your business genuinely requires a physical office for client meetings, operations, or warehouse space, starting with a flexi-desk or co-working package is a smart financial move.
Get a visa for only the necessary team members
Visas are yet another significant cost-increasing factor of starting a business in the UAE free zone. A common mistake made by new business owners is applying for the maximum number of visas their license allows, regardless of actual operational need. Focus on sponsoring only the necessary visas and rely on freelancers or remote work to control the cost in the initial years.
How To Know The Free Zone Company Setup Cost In Your Desired Zone!
The total cost of starting your free zone company in the UAE depends on various factors and the choice of freezone. You need to check the desired free zone website or contact them to get an estimate.
This process can be tedious and time-consuming for the founders. Furthermore, it diverts your attention from your business to the paperwork, affecting your business growth. That’s where a PRO service company can help you.
365 Day PRO Services has been helping businesses start their journey to the UAE for more than 15 years. Our team knows all the nitty-gritty of the process and government requirements to register and operate in the freezone. If you want an accurate and transparent UAE free zone company setup cost, contact us now!
Conclusion
The Free Zone Company Setup Cost in any emirate of the UAE depends on the registration fees, license fees, office space rent, establishment and visa costs, shared capital (if applicable) and other ancillary costs. The price of all these factors is different for each free zone. Connect with a reliable PRO service provider such as 365 Day PRO Services to get an accurate estimate for the free zone company cost in the UAE.
FAQ
What are the hidden costs of a UAE free zone company setup?
While most people focus on the big expenses, most of them overlook other ancillary expenses, such as mandatory health insurance, corporate bank account minimum balance requirements, document attestation fees for foreign nationals, annual accounting or audit fees, and late renewal penalties if your license or visa expires. Therefore, you should account for all these expenses and always have a buffer capital set apart for this purpose.
What is the Dubai free zone company setup cost?
A Dubai free zone company setup typically costs between AED 12,500 and AED 50,000+ for Year One, depending on the free zone and package selected. You should focus on choosing the right free zone and business activities to control the cost and find the best price for your business goals.
Which is the cheapest free zone in Dubai?
Meydan Free Zone and International Free Zone Authority (IFZA) have the most affordable cost for Dubai free zone company setup. The average price range is between 18,000 and 25,000. Contact us to know more about affordable options based on your needs.
How much does it cost to renew a free zone license in Dubai?
While the actual cost varies for each free zone, the average cost of license renewal can range between AED 10,000 and AED 20,000. Contact us to know more.