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Cost of Company Formation in Dubai in 2021

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cost of company formation in Dubai

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Why Dubai is best place for company formation?

Dubai is a dream destination. Dubai aspires to be Western Asia’s business hub. It is also a major international transportation hub for tourists and cargo.
Everyone wants to work or start a business in Dubai because of the world-class facilities available, such as security, transportation, infrastructure, information technology, and so on.

You already have a business in your home country or you have a job and want to start a business in Dubai because Dubai provides amazing opportunities to everyone and such opportunities are not available to everyone living in other parts of the world, and with the passage of time, everyone prefers to start a business rather than doing a job.

If you are considering starting a new company in Dubai, like many other people who are successfully running their businesses, the next question that will arise is how much it will cost you to start a company in Dubai.

This is a fantastic question, and all new investors want to know the answer to it. As a result, I gathered all of the available data in order to provide you with the most accurate estimate.

In the UAE, you can run three different types of businesses.

What are common forms of a Company in Dubai?

There are three types of business that you can operate in the UAE,

  • A limited liability company in the mainland

  • A sole proprietorship in a free zone

  • A offshore company that work outside Dubai

Each business has its own set of costs, challenges, ownership rules and regulations, and benefits.

However, in this article, we will look at how much it will cost and how long it will take to set up a limited liability company (LLC) in Dubai.

What is LLC in Dubai?

The abbreviation for Limited Liability Company is LLC.


The most common type of business in Dubai is the limited liability company. On the Dubai mainland, a Limited Liability Company is formed.

For a Limited Liability Company, you will need a UAE national partner or local sponsor who will own 51 percent of the company and 49 percent of the foreign shareholders. He or she will be your business partner.

A limited liability company can be formed with as few as two shareholders and as many as fifty. The shareholders’ liability is limited to their shares in the company’s capital. An LLC company can conduct business anywhere in Dubai and the GCC.

Why LLC is a better form of a Company in Dubai?

However, in a Limited Liability Company, you will have legal ownership of 49 percent and maximum legal rights. The most significant advantage of forming an LLC is that it protects your personal assets by limiting liability to the capitals of the business itself.

In most cases, the LLC will shield your personal assets from claims made against the company.

You will also benefit from lower income taxes if you form a Limited Liability Company.

In an LLC, you can set up shop anywhere in Dubai.
You will be able to apply for an unlimited number of visas and easily sponsor your family members if you form an LLC (spouse, children, parents, or household helpers).

There are no limitations or restrictions on the types of business activities. You may select any business activity. You can open a bank account without any difficulty.
If your target customers are in the greater Dubai local market, establishing a limited liability company on the mainland is the best decision you can make for your future.

Which license you will need to form a company;

he type of license you need is determined by your business activity. If your business involves the sale and purchase of tangible goods, a legally commercial license will be granted to your company. On the other hand, if you want to offer specific skills or services in exchange for a fee, a professional license is required. In addition, you will be granted an industrial license to produce and manufacture goods.

Commercial license:

 

Commercial license; A commercial license is a license issued by the government to a company in order for it to begin any type of trading activity.

In Dubai, you can buy and sell goods of any kind. You will need a commercial license to form a limited liability company, so for your facility, here are lists of commercial activities that have been approved by the Department of Economic Development and you are free to engage in any business activity of your choosing.

 

Commercial license approved by the Department of Economic Development

  • Art production

  • Advertisement

  • Auto spare parts trading

  • Building Materials trading

  • Car rent and passenger transport

  • Bags ,packing materials and paper trading

  • Beauty and Baby care requisites

  • Broadcasting and communications

  • Chemicals trading

  • Cinema and theaters

  • Aircraft and train spare parts trading

  • Building maintenance and cleaning services

  • Commercial brokerage

  • Domestic gas distribution

  • Electronic group

  • Facility management

  • Flours mills

  • Flowers and plants

  • Fish trading

  • Foodstuff supply

  • Filing station

  • Jewelry trading

  • Leather trading

  • Fuel supply

  • Mechanical and Engineering Equipment Rental

  • Metals products trading

  • Office and Electronic Equipment rental

  • Packing

  • Pets nursery and trading

  • Poultry trading

  • Real estate

  • Supermarket

  • Tents and tarpaulin trading

  • Tobacco and smoking accessories trading

  • Perfumery

  • Stationary and books trading

  • Sports equipment trading

  • Used heavy equipment trading

  • Transport, shipping and storage

  • Readymade garments trading

  • Time sharing

How to setup LLC in Dubai

The formation of a company consists of seven major steps.

In order to form a company, you must be familiar with these steps. However, with the assistance of a company setup consultant, you can easily complete all of these steps.

The following are seven steps to starting a business:

 

Here are seven steps for company setup that is given below;

  • Choose your company activity
  • Reserve your company name
  • Apply for initial approval
  • Get MOA and LSA contract
  • Find your office space
  • Collect company trade license
  • Post LLC setup formalities

How much is Cost of Company formation in Dubai?

Business set up cost in Dubai

The costs listed below are based on the best estimates available at the time this information was written. Keeping in mind that it will provide you with a general idea of the costs and timeline for forming an LLC.

So, here’s a breakdown of all the costs you’ll need to consider when forming an LLC in Dubai. You can also use these figures to create a business plan before you start.

 

One time cost of initial approval cost

 110 – 220 AED

Trade name approval cost

720  AED

  Office rent  

30 ,000 -50,000AED

80 per sq. Feet

Non –Arabic trade name cost

Max 3000 AED

Attestation of memorandum of association cost

400 -1800 AED

Registration from ministry of economy cost

3000 AED

Trade license fee

10,000 AED to 15,000 AED

Sponsor fees

8,000 -15,000 AED

Commercial license fee

700 AED

Drafting the LLC contract

600 AED

Improvement of commercial services fee

400 AED

Chamber of commerce fee

 1200 AED

Market fees: 5% of rent for your shop/office, 20% of rent for warehouses

1250 -2500 AED

Public waste related services fee

1000 AED

As a result of the above figures, you can easily conclude that it may take AED 50 thousand to AED 75 thousand, as the cost is directly related to the cost of your office space; so if you want an office in the heart of Dubai, the cost will undeniably be higher than if you want an office in a less expensive area.
Thy type of office will be a key factor, for example, if you are going to open a business that requires you to store goods under your own supervision, you will need to go storage space, and the rates can vary from area to area.

The best ideas for office space can be found on classified websites such as Dubbizille, where you can filter the type of property that best fits your needs. Once you apply your filters, you will see the prices of available options.
There are numerous other websites where you can compare rental rates in Dubai.
After forming an LLC in Dubai, you will be granted an owner visa as well as an employee visa. The Dubai owner visa is a three-year temporary residence visa.
The estimated cost for an owner visa and an employee visa is provided below.

If the owner is in Dubai, his visa will cost approximately AED 4,000. 

If he or she is outside of the country, his or her visa will cost approximately AED 3,000.

After owner visa you will need employees that will help you to run your business .

You can hire employees from any country as Dubai welcome talents from more than 180 countries who come with different skills. You can decide if you need people who has already experience in Dubai or you can adjust with fresher which mean employees who don’t have local experience yet.

So estimated cost for employee visa is given below;

  • Cost for one employee visa is approximately AED  3000

How many employees You can hire?

As a result, the estimated cost for an employee visa is as follows: 

AED 6000 for one employee visa.

With a single license, you can hire an unlimited number of employees. However, the number of employees is determined by the amount of office/shop space available.

 It is a rule that you need 80 per square foot for each employee visa. because a typical shop is 250-300 square feet So, for this typical shop, you can only hire 2 to 3 people. However, you can hire as many salespeople as you want..

 

Documents required for LLC formation in Dubai;

  • Passport copy of partners or managers

  • 2 photographs with white background

  • Tenancy Contract Copy

  •   Location Map

  •   DEWA Bill

  •   Designation Details:-Higher Designation Requires Degree Certificate (Attested)

  •   Time Taken for Quota Approval (approximately 5-7 Days)

  •   Time Taken for Labour  Approval (approximately  3 working days

How much it takes to setup business in Dubai?

From start to finish, the average time to form an LLC in Dubai is 3-5 weeks. There are, however, options that you can use to expedite the process.

If you want to receive all of your documents in 1-2 weeks and are willing to pay a fee. This is the standard processing speed; of course, the standard option is determined by the government in which your LLC is formed.

 

Conclusion:

We walked you through from all the stages you will face while forming a company in Dubai.

This read will clear many questions in your mind and will also give rise to many other questions.

The good thing is that if you have a new question in your mind then you are much closer to find the answer as well.

If you have any confusion, do leave us a comment we will try to respond at our earliest.

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