How much does it cost to set-up a business in the UAE?
Sep 05, 2022
We often get asked this question in Female Fusion - well, how long is a piece of string?
In the UAE, every business is different; there are more than 60 different jurisdictions; and that means that there is no one fixed price or one size fits all for any business.
When looking at setting up a business in the UAE, there are a variety of costs that you could potentially incur:
Trade licence and registration costs
These are the fees you pay to the government to get a trade licence to register your business. This might also include professional services fees such as paying for the services of a business setup or legal advisor to ensure that you get your structure right from the beginning.
Permits and further licences
Certain types of businesses require specific permits. For example, if you have a training business, a restaurant, shop or food preparation business, all of these have specific permits or requirements that need to be added on as part of getting the licence. Every jurisdiction has specific rules that need to be followed and this is where the licencing authority or business set-up advisors will be able to support you.
Legal fees
Depending on what your business is doing, you will need a budget for getting legal contracts or agreements drawn up. Don’t also forget that you will need terms and conditions and a privacy policy for your website. If necessary, you might also need to apply for trademarks for your business.
Office space and fit-out costs
In the UAE, many trade licences have a requirement to have office space linked with it. Some will allow desk space in a business centre or a virtual office, while others will expect mandatory office space.
If you are going to take office space, you will also need to factor in fit out costs, furniture, utilities and parking.
Insurance
This is a mandatory business requirement. This will be business insurance such as legal liability and workman’s compensation; and health insurance for you and your employees. You will need to check with your licencing authority which insurance is expected for your specific licence.
<pEmployee sponsorship
If you have a business with employees, you will need to sponsor them so they can legally work for you and reside in the country. Residency visas are two years for mainland and three years for freezone companies.
Bank account
All businesses are legally required to have a bank account. Unless you will have a minimum monthly balance of at least 50,000 AED, you can expect a monthly fee of 100-200 AED+ per month, depending on the types of transactions you have.
IT system
You need to budget for an IT system - things like computers, any software, or online tools you will need to run your business.
Website
You will need to have a website or, if you're selling online, an eCommerce site with a payment gateway. Depending on your business, you might need to budget for development and hosting fees too.
Marketing and communications
You might also want to make an investment into marketing, PR, branding and social media. All of those will be essential to help you build your brand and help you build your reputation as a business. Good graphic design and templates that you can use across the different channels that you use to promote your business will help communicate consistently and on your messaging
Networking
Every entrepreneur should build their professional network. You will need to have budget set aside for networking events and joining professional associations that will help you build your community and your network. As they say, your network is your net worth.
Accounting software
You will need to have accounting software in your business that will help you keep track of your money. Products such as Xero, Zoho Books or QuickBooks are popular with SMEs in the UAE. You might also need to pay for the support of an accountant to help you track and manage your finances.
Additional support
As your business grows, you will also want to make use of staff and that would either be full or part-time, or you could make use of hiring freelancers or virtual assistants. They work remotely, keeping costs down and will help you pick up some of the admin and technical support that you need in your business.
Other key services
You will also want to budget for other key service providers, such as couriers or stationery suppliers that will support you in building and growing your business.
If you need a reliable courier service, members of the Fusion Circle receive a 45% discount on Aramex’s fees.
For more information see the Fusion Circle.
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These are some key areas that you can budget for when first setting up a business in the UAE. Every business will have different requirements, but this should give you a good starting point for the key areas that you can plan for as you begin your entrepreneurial journey.
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