Company Setup Costs in the UAE (2025)

Setting up a company in the United Arab Emirates (UAE) involves choosing between Mainland, Free Zone, or Offshore jurisdictions. Costs can vary widely depending on the emirate, the type of business license, and the specific free zone or offshore registry. Below is a detailed breakdown of company formation costs in 2025, including differences by emirate, license category, major free zones, comparative cost tables, typical setup timelines, and recent policy updates.

Mainland Company Formation Costs by Emirate

Mainland companies are licensed by the Department of Economic Development (or equivalent) in each emirate, allowing you to do business anywhere in the UAE. Mainland setup costs include trade license fees, registration fees, local sponsorship (if required for certain activities), office lease, and visa costs. These costs vary by emirate:

• Dubai (Mainland): Dubai tends to have the highest mainland setup costs. A standard trade license in Dubai typically costs around AED 12,000–20,000 per year (this is the government license fee alone). After adding initial approvals, registrations, and mandatory office rent, a typical total first-year setup in Dubai mainland can range roughly AED 20,000 to AED 30,000. Dubai’s mainland fees are about 20–30% higher than those in Sharjah or Ajman for similar business activities. (Example: A professional services LLC in Dubai might budget ~AED 20k for license and initial fees, plus separate office rental starting around AED 15k/year.)

• Abu Dhabi (Mainland): Abu Dhabi historically had fees comparable to Dubai, but in recent years it implemented aggressive fee reductions to spur investment. As of 2025, a standard Abu Dhabi mainland license can range about AED 10,000–25,000 annually (depending on activity). Notably, Abu Dhabi’s DED introduced a flat AED 1,000 fee for a two-year new license (covering up to 6 business activities), drastically reducing initial setup cost. In practice, many new Abu Dhabi businesses pay ~AED 5k–15k for the license (before office and visas). Office space in Abu Dhabi can be found from ~AED 10k/year in affordable areas. This makes Abu Dhabi one of the most cost-effective mainland options, provided your business qualifies for the fee waiver scheme.

• Sharjah (Mainland): Sharjah’s mainland license fees are generally lower than Dubai’s. A Sharjah trade license might cost on the order of AED 5,000–10,000 for the license fee itself (varies by business activity). Including other charges (office, visas), setting up a Sharjah mainland company typically totals between AED 15,000 and AED 30,000. Sharjah Economic Development Department fees are competitive; in fact, Sharjah’s cost for a similar license can be 20%+ less than Dubai’s. Entrepreneurs often choose Sharjah or other northern emirates to save on annual fees while still accessing the UAE market.

• Other Emirates (Ajman, Ras Al Khaimah, Fujairah, Umm Al Quwain): The smaller emirates offer lower mainland setup costs to attract businesses. Trade license fees in Ajman, RAK, Fujairah, or UAQ are often in the AED 5,000–10,000 range for many activities (comparable to Sharjah) and are sometimes packaged with flexible office options. For example, Ajman’s DED offers basic commercial licenses with fees on the lower end (around AED 7k–10k). Ras Al Khaimah and Umm Al Quwain likewise keep fees modest; total first-year mainland setup in these emirates can often fall around AED 10k–20k all-in. In short, the northern emirates’ mainland licenses are among the cheapest, often 30%+ cheaper than Dubai’s for the same activity, though one must factor in the smaller local market. (Many foreign entrepreneurs opt for these emirates if they require a UAE license but will mainly conduct business online or overseas.)

Mainland License Fee Comparison by Emirate (Approx. 2025):

Note: Mainland licenses often require a physical office lease in the same emirate (virtual or flexi-office solutions may be allowed for initial setup in some cases, but a real space is usually needed upon renewal). This adds to the cost – e.g. a small shared office in Dubai or Abu Dhabi starts around AED 15k/year, whereas in Sharjah or Ajman it might start around AED 8k–12k/year. Mainland companies can trade anywhere in the UAE and can bid on government contracts, but certain professional businesses still require a local service agent (in name only, no shareholding) which may incur an annual fee or stipend.

License Types and Fees: Commercial vs. Professional vs. Industrial

The cost also depends on the type of business license you obtain. The UAE issues different licenses based on the nature of activity:

• Commercial License: For trading activities, general commerce, retail, e-commerce, etc. This is the most common license type for buying and selling goods. A commercial license typically costs around AED 10,000 to AED 25,000 per year in fees (with Dubai mainland on the higher end of that range, and some free zones on the lower end). If the license involves broad trading (e.g. a general trading license covering multiple product categories), the cost is often at the higher end or requires higher share capital (e.g. DMCC and JAFZA require AED 1 million capital for general trading).

• Professional License: For service-oriented businesses and skilled professions (consultancies, artisans, IT services, marketing, doctors, etc.). Professional license fees are usually slightly lower than commercial. Typical fees range AED 7,500 to AED 20,000. For mainland professional licenses, 100% foreign ownership is allowed but a Local Service Agent (an Emirati sponsor with no equity) is formally required; their annual agent fee can be ~AED 5k (varies). Many free zones also issue service licenses with competitive fees (often in the lower end of this range).

• Industrial License: For manufacturing, industrial and factory operations. These licenses have more requirements (e.g. an industrial facility/warehouse, local municipality approvals, environmental clearances) and higher fees. An industrial license typically ranges AED 15,000 to AED 35,000 in annual cost. Industrial projects usually need larger premises (which add significant cost) and may stipulate higher minimum capital. Some emirates (like Abu Dhabi’s KIZAD or Dubai’s industrial zones) offer special incentives, but the up-front cost remains higher due to infrastructure needs.

Typical UAE License Fee Ranges by Type:

These are government licensing fees only (covering one year of license validity). Higher-end figures apply to broader or more complex activities. For example, a basic consultancy might be ~AED 8k in some free zone, whereas a general trading or industrial license in Dubai can be AED 25k+. Keep in mind additional one-time fees like trade name reservation (around AED 500–1,000 in most emirates), initial approval fees (~AED 1k–3k), and MOA notarization (if applicable). These initial administrative fees can add a few thousand dirhams across the setup process.

Free Zone Company Setup Costs (Major Free Zones)

Free zones are special economic zones that allow 100% foreign ownership and offer tax benefits (0% corporate tax for qualifying companies, 0% import/export duties, etc.). Each free zone authority sets its own fee schedule and often sells “packages” that bundle the license, registration, and a flexi-desk or small office. There are dozens of free zones across the UAE, each with different focuses and cost structures. Below are major free zones and their typical setup costs in 2025:

• DMCC (Dubai Multi Commodities Centre, Dubai): DMCC is a premier free zone in Dubai (Jumeirah Lakes Towers area) known for its robust infrastructure and reputation. It is on the higher-end costwise. Setting up a company in DMCC typically costs around AED 50,000 in the first year, which includes a one-time registration fee (~AED 9k), an annual license fee, and a flexi-desk office rental. For example, DMCC’s “Basic Package” (1 year, flexi desk) is about AED 35k+ (including registration and first year license), and their popular Jump Start package (with flexi-desk) is ~AED 43,780 for 1 year. Additionally, DMCC requires a share capital deposit of AED 50,000 (refundable after incorporation) for a standard company, or AED 1,000,000 if you opt for a General Trading license. Renewals in subsequent years mainly involve the license (~AED 10k–20k+) and office lease. Despite the cost, DMCC is repeatedly awarded “Global Free Zone of the Year” and offers a prestigious address and networking community. Typical setup timeline: ~7–10 working days for company formation.

• IFZA (International Free Zone Authority, Dubai – license issued in Fujairah): IFZA has become popular for its affordability and flexibility. In 2025, IFZA packages start from around AED 12,900 for a zero-visa license. This base package includes the trade license and possibly use of a flexi-desk address; adding visa eligibility or additional activities increases the fee. IFZA is known for low-cost trading or service licenses ideal for small businesses and consultancies. (IFZA’s operations are in Dubai Silicon Oasis, but the legal jurisdiction is Fujairah.) Setup is fast (often <1 week once documents are ready). Many foreign entrepreneurs choose IFZA for its streamlined process and low entry cost.

• RAKEZ (Ras Al Khaimah Economic Zone, RAK): RAKEZ is a leading free zone in Ras Al Khaimah, offering a range of packages including industrial lands, warehouses, and flexi-offices. RAKEZ licenses start from around AED 11,500 for simple setups. For instance, an RAKEZ commercial or consultancy license with a flexi-desk can be in the AED 11k–15k range (0 or 1 visa). RAKEZ is particularly attractive for industrial and manufacturing activities due to its access to ports and cheaper utilities; however, even trading or service businesses use RAKEZ to save cost while still obtaining a UAE residence visa. Many RAKEZ packages include shared workspace and one visa. Setup timelines are typically 5–10 days. (Ras Al Khaimah also has a separate International Corporate Centre for offshore companies – see Offshore section below.)

• JAFZA (Jebel Ali Free Zone, Dubai): JAFZA is one of the oldest and largest free zones, located at Jebel Ali Port in Dubai, focused on logistics, trading, and manufacturing. JAFZA’s costs are moderate-to-high. The one-time registration fee is ~AED 5,000–15,000, and an annual license fee is likewise ~AED 5,000–15,000 depending on license type. In addition, you must lease a facility: JAFZA offers flexi-desks and offices starting around AED 15,000/year for a small space. In total, a simple JAFZA setup (e.g. a trading company with a flexi-desk and 1 visa) might come to roughly AED 25k first year. Warehousing or large plots will cost more (warehouse leases can run AED 40–80 per m², so hundreds of thousands AED for big facilities). JAFZA companies benefit from being inside Dubai’s largest port and industrial zone. The typical formation timeline is 1–2 weeks if all documents are in order. JAFZA also allows an Offshore company formation (JAFZA Offshore), which is separate from its free zone FZCO/FZE – see Offshore section.

• Shams (Sharjah Media City, Sharjah): Shams is known for being one of the cheapest free zones. A Shams license can cost as low as AED 5,750 for a basic package (this often is a zero-visa package for a media or service license). Even with a visa allocation, Shams packages remain affordable (a one-visa license is typically under AED 10k). This makes Shams very popular for startups and freelancers. The trade-off is that Shams companies are intended for media, creative, or service activities (they allow broad activities, but heavy industrial uses would not be suitable). The process is very quick – licenses are sometimes issued in 2–5 days.

• Other Notable Free Zones:

  • Dubai South (formerly DWC) – Offers trading and aviation/logistics-related licenses; packages from ~AED 16,000 for a simple license.

  • Meydan Free Zone (Dubai) – A newer option with packages ~AED 12,500 including a shared desk.

  • Ajman Free Zone – Competitive packages (e.g. general trading ~AED 14k for zero visa, AED 17k with 1 visa; professional freelance permits ~AED 6k).

  • UAQ FTZ (Umm Al Quwain) – Known as one of the cheapest: UAQ’s “LYTE” package starts around AED 5,500 for zero visa. Standard packages with a visa are ~AED 12k.

  • ADGM (Abu Dhabi Global Market) – A financial center free zone in Abu Dhabi; much higher cost (a financial license can be USD 25k+). ADGM in 2025 reduced some fees (e.g. retail license registration cut from $6k to $2k), but it remains a specialized zone for finance.

  • DIFC (Dubai International Financial Centre) – Another financial free zone, also high cost (not typically chosen for cost reasons, but for regulatory reasons in banking/finance sector).

Free Zone Setup Cost Comparison (Selected Zones, 2025):

(Note: “Starting” package costs usually cover the license issuance and minimal facility; they often exclude certain mandatory fees like the establishment card (~AED 1k), immigration card setup (e-channel), or visa fees. Many free zones now bundle these for convenience. Always check for extras like immigration registration, medical insurance requirements, or security deposits which can add to initial costs.)

In general, free zone companies are the most cost-effective option for many foreign entrepreneurs if most business will be outside the UAE or in the free zone. Free zones allow 100% foreign ownership and profit repatriation. The trade-off is that a free zone company cannot freely trade in the UAE mainland (outside its zone) without using local distributors or the new dual-licensing options (discussed below). For purely international or online businesses, free zones provide a UAE base with lower cost and hassle. Free zone setup is also typically faster and requires less paperwork than mainland.

Offshore Company Setup Costs

Offshore companies in the UAE are International Business Companies (IBCs) that are legally domiciled in the UAE (in a free zone’s offshore registry) but are not allowed to conduct business within the UAE. They are used for holding assets, international trade, or as vehicles for global business outside UAE. Offshore entities do not issue residence visas and do not require physical office space in the UAE. The two main offshore jurisdictions in the UAE are RAK ICC and JAFZA Offshore:

• RAK ICC (Ras Al Khaimah International Corporate Centre): RAK ICC is a leading offshore registry in Ras Al Khaimah. It’s known for being cost-effective and flexible. The setup cost for a RAK ICC offshore company in 2025 is roughly in the range of $2,000–$3,000 USD (≈ AED 7,500–11,000 total) including government fees and basic agent fees. For example, one provider cites an average market rate of ~$3,000 for RAK ICC setup, and ~$2,000 (AED ~7.4k) annual renewal. The official RAK ICC fees include a registration fee and annual renewal fee (often around AED 3k each), and you must engage a registered agent in the UAE to incorporate the company (the agent will charge a fee, usually a few thousand dirhams per year). RAK ICC requires no paid-up share capital by default and permits various activities (holding company, consulting, property holding, etc.), making it a popular choice for holding foreign investments or UAE real estate. Timeline for incorporation is quick – typically 1–2 weeks if KYC documents are in order (sometimes just a few days for approval).

• JAFZA Offshore (Jebel Ali Free Zone Offshore, Dubai): JAFZA Offshore companies are an older form of offshore company often used to hold property in Dubai or conduct international business. The JAFZA Offshore license fee is about AED 9,000–12,000 per year. Initial setup also involves a one-time registration fee (similar ballpark) and using a JAFZA-approved registered agent. In total, first-year costs might be around AED 15,000–20,000 including agent fees. JAFZA Offshore companies cannot rent office space or sponsor visas – they exist only on paper via the registered agent’s address. They are restricted from doing business with UAE residents but can hold UAE bank accounts and assets. JAFZA Offshore is particularly known as the vehicle through which non-residents hold freehold properties in Dubai (developers often accept JAFZA Offshore entities as property owners). Setting up a JAFZA offshore company usually takes 1–2 weeks, as long as all shareholders pass compliance checks.

• Other Offshore Options: There is also an Ajman Offshore (operated via Ajman Free Zone) which functions similarly to RAK ICC; costs are in the same ballpark (a few thousand dollars). However, RAK ICC has largely become the dominant offshore registry after RAK and Dubai consolidated their offerings. Some free zones (like RAKICC and Ajman Offshore) advertise installment plans and simplified procedures to attract offshore business. Overall, offshore companies in UAE are among the cheapest entities to set up (cheaper than any mainland or free zone company) but they serve a narrow purpose and do not provide a trading license for the local market.

Offshore Company Cost Overview (2025):

Note: Offshore companies must be formed via authorized agents – the fees above often include agent service for documentation and a registered address. Since offshore companies cannot rent offices or employ staff in the UAE, ongoing costs are minimal (just renewal and agent fee). They also have no minimum capital requirements. However, if you plan to actually operate a business in the UAE or need residency visas, an offshore company is not suitable – you would need a mainland or free zone company instead.

Comparative Summary of Company Types

To summarize the cost differences across Mainland vs. Free Zone vs. Offshore and other factors, the table below highlights key comparisons:

As shown, free zone companies generally offer the most cost savings upfront, whereas mainland companies grant full access to the local market at a higher cost. Offshore companies are cheapest but serve limited purposes.

Typical Setup Timelines

The time required to establish a company can be just as crucial as the cost. Here are typical setup timelines in 2025 for each category, from initial application to license issuance:

• Mainland Company Timeline: ~4 to 8 weeks on average. Mainland setup involves multiple steps: trade name reservation, initial approval from the Economic Department, sometimes external ministry approvals (for certain sectors like health, education, finance), drafting MOA and notarization, leasing an office, then final license issuance. The need for Ejari (lease registration) and inspections can add time. For example, in Dubai mainland an “Instant License” can be issued quickly in principle, but completing the remaining requirements (MOA, lease) still means a few weeks to finalize. In Abu Dhabi, the Basher online system can streamline certain licenses in days, but generally one should expect several weeks for mainland, especially if not using a fast-track service.

• Free Zone Company Timeline: ~1 to 2 weeks on average. Free zones are designed for speed and simplicity – many have one-stop online portals. For instance, IFZA or Shams often issue electronic license certificates within 2–5 business days of receiving completed documents. More established zones like DMCC or JAFZA might take around 1–2 weeks to process approvals and for the investor to meet any requirements (like depositing share capital for DMCC, or signing documents). Still, free zones tend to be much faster than mainland. Example: A company in Sharjah’s Shams free zone can be fully set up in under a week (no need for physical presence), whereas a similar mainland Sharjah company might take a month. Free zones have dedicated staff to assist and fewer external approvals, expediting the timeline.

• Offshore Company Timeline: ~1 to 2 weeks (up to 4 weeks in some cases). Offshore incorporations are relatively quick since they involve only the registry and the registered agent’s processing. RAK ICC, for instance, often approves new offshore companies within 5–10 working days. The timeline largely depends on how fast the client provides authenticated documents and passes compliance checks. JAFZA Offshore is similar – roughly 1-2 weeks. There’s no requirement to visit the UAE for offshore formation (all can be done via courier and agent), which can save time as well.

Keep in mind these are typical timelines assuming all paperwork is in order. Missing documents, additional compliance questions (especially since UAE banks and authorities enforce strict KYC/AML checks), or high demand periods can cause delays. Working with a local business setup consultant or PRO can significantly reduce delays – some consultancies report mainland licenses issued in 5–10 working days under optimized conditions, but that is with expert handling and possibly premium processing.

Notable Updates and Policy Changes in 2025

The UAE business setup landscape is dynamic. Here are some important updates and changes affecting company formation costs and procedures in 2025:

• Corporate Tax Introduction: The UAE introduced a federal corporate tax of 9% on business profits effective June 2023, with the first tax filings due in 2025. This applies to mainland companies (and free zone companies on non-qualifying income) for profits above AED 375,000. Free zone entities can still enjoy 0% tax if they meet substance requirements and earn only qualifying foreign-sourced income. While this is a tax on operations (not a formation fee), it has influenced how companies structure themselves. Some mainland businesses might consider moving to or creating a branch in a free zone to benefit from the 0% tax on offshore revenue. Compliance costs (like hiring accountants, filing returns) have effectively become a new part of business setup considerations in 2025.

• 100% Foreign Ownership in Mainland: Following amendments to the UAE Commercial Companies Law, since mid-2021 the UAE allows 100% foreign ownership in most mainland sectors (removing the 51% local shareholder requirement). By 2025, all emirates have implemented this, meaning you typically do not need a local partner for commercial and industrial licenses (except in strategic sectors where a local stake or agent is still mandated). This has reduced the cost of local sponsor arrangements for many new businesses (previously, companies might pay a local nominee shareholder an annual fee). Now, except for a few restricted activities, foreign entrepreneurs can form a mainland LLC with full ownership – a significant policy shift increasing the appeal of mainland setups.

• Dubai Free Zone Companies Allowed in Mainland (2025 Law): A game-changing development in Dubai: Executive Council Resolution No. (11) of 2025 (effective March 2025) allows Dubai free zone companies to operate directly in the Dubai mainland under certain conditions. Free zone businesses can now sell goods and services in the mainland without a separate mainland company or local distributor, by obtaining permission from Dubai’s Department of Economy and Tourism (DET). Essentially, a free zone company can be granted a permit to do onshore business activities. This blurs the line between mainland and free zone and can save costs – free zone companies no longer need to incur the full expense of creating a mainland subsidiary or partnering with a local agent just to trade across Dubai. They will likely pay a fee or percentage to DET, but it’s a streamlined approach. This policy is new and specific to Dubai, but it signals greater integration of free zones with the wider economy, reducing duplication of licenses.

• Abu Dhabi’s Fee Reductions: As mentioned, Abu Dhabi significantly cut government fees for new business licenses in 2021, consolidating many fees into a AED 1,000 flat charge for the first two years. This initiative (under the “Ghadan 21” economic stimulus) continues in 2025, making Abu Dhabi mainland very attractive. Many fees like name reservation, initial approval, and first-year license issuance were waived or lowered. Other emirates have offered discounts as well; e.g., Sharjah has occasionally run 50% fee reduction campaigns for certain sectors, and Ajman and RAK periodically announce setup promotions via their chambers or free zones. It’s wise to check if any incentives or fee waivers are in effect in the emirate of choice – these can save thousands.

• Flexible Payment Plans: A number of free zones and even mainland departments now offer installment plans or subscription-style payments for license fees. For example, some free zones allow paying the setup cost in 2–4 installments over the year. This doesn’t change the total cost but eases cash flow for startups.

• New License Types and Visas: The UAE has introduced various new licensing and visa options which, while not traditional company setups, impact the entrepreneurial cost landscape:

  • Freelance Permits: Several free zones (e.g. twofour54 Abu Dhabi, Dubai’s TECOM zones, Ajman Free Zone) offer freelance licenses for individuals, costing only around AED 7k or less, allowing one to work as an independent professional in fields like media, tech, or design. This is a low-cost alternative to setting up a full company if you’re a solo operator.

  • Virtual Business Licenses: Dubai’s Virtual Commercial City program (Dubai Virtual Company License) allows overseas entrepreneurs to obtain a Dubai license remotely for certain digital activities at low cost, entirely online. This was expanded in recent years.

  • Golden Visas & Company Setup: While not a direct company cost, the availability of Golden Visas (10-year residency) for investors (who invest above certain thresholds in a company or property) has led some to invest more in their company setup to qualify. The cost of a Golden Visa application is around AED 10k–15k, and some free zones advertise fast-track Golden Visa packages for large investors.

  • Longer Visa Durations: As of late 2022/2023, standard UAE residency visas (including investor and employment visas through companies) are typically issued for 2 years (down from 3 years in the past, except Golden Visas). This means visa costs recur more frequently, and companies must budget for renewals slightly more often. The typical investor/partner visa costs in 2025 are around AED 3,500–6,000 per visa (including government fees, medical exam, Emirates ID). Employee visas are similar (AED 4k–7k). These fees have seen slight increases with the introduction of new Emirates ID systems and health insurance mandates.

• Economic Substance & Reporting: Free zone companies (and some offshore) are now subject to Economic Substance Regulations (ESR) and Ultimate Beneficiary Owner (UBO) reporting. While these don’t usually affect initial setup cost, non-compliance can lead to fines. Some free zones charge a small annual filing fee for ESR notifications. Also, annual audit requirements have become the norm in many jurisdictions: e.g., DMCC requires an audit report from the second yeare. Businesses should budget for accounting/audit costs from year 2 (~AED 5k+ for a small firm audit). These regulatory steps were introduced in 2019–2020 to align with international standards and are fully enforced by 2025.

• Bank Account Challenges: UAE banks have tightened compliance, making it a notable “cost” in terms of time and sometimes money (some banks require maintaining a high minimum balance, e.g. AED 50k or more). While not a formation fee, delays in opening a bank account can effectively delay business operations. In 2025, expect 2–8 weeks to open a corporate bank account and potentially having to try multiple banks. Some companies resort to using digital banking services (with fees of a few thousand AED) to get started. Planning for this in advance with professional help can save opportunity cost.

In conclusion, the UAE in 2025 remains a highly attractive place to establish a business, with options catering to all needs – from the full-fledged mainland LLC (with higher costs but unlimited access), to budget-friendly free zone setups, to special-purpose offshore entities. Costs have generally come down or stayed stable due to government efforts (especially in Abu Dhabi and via free zone competition). By carefully selecting the jurisdiction and license type that matches your business goals, and staying updated on policy changes (like Dubai’s new free zone-mainland integration and the corporate tax regime), entrepreneurs can make informed decisions and potentially save significantly on company formation costs. Always verify the latest fees with official sources or reputed business setup consultants, as authorities frequently refine fees and regulations in line with the UAE’s economic strategies.

Sources: Government and free zone portals, and business consultancy reports have been used for the above information. Key references include ProAct Chartered’s UAE cost guide proactfs.com, Nomad Capitalist’s 2025 UAE overview, justmovedubai’s timeline guide, official free zone fee schedules (DMCC, JAFZA) and recent news on regulatory changes bestaxca.com, among others, as cited throughout this report. Each figure is an approximate to reflect 2025 conditions; actual costs may vary slightly based on specific business requirements.