Dubai business setup costs more than the headline says. Your license quote is AED 5,000. Your first-year invoice is AED 22,000. Here is every line nobody shows you upfront.
I sat down with Sergei, our Head of Operations — the person who sees every license renewal, bank application, and visa batch at GCG. We went line by line through the real costs. Not estimates. Actual numbers from real setups.
License Costs: What Is Not Included
The AED 5,000 license in a small free zone is just the base fee. Add name reservation, initial approval, attestation, chamber of commerce membership if you are on mainland — that is another AED 1,000 to 2,000 immediately. If you use a local sponsor on the mainland, budget AED 6,000 to 10,000 every year for their nominal fee. AED 20,000 or more if you hold a general trading license.
Every Dubai mainland license also requires an Ejari — a registered lease. And 5% of the Ejari cost gets added to your license fee. If your office rent is AED 100,000, that is another AED 5,000 on your license that nobody advertises.
Banking: The Minimum Balance Trap
Most UAE business accounts require a minimum balance of AED 25,000 to 50,000. Drop below it and the bank charges AED 250 per month. That is AED 3,000 a year for nothing. Open two accounts and leave low balances in both — you are leaking money every month.
Tax, VAT, and Mandatory Accounting
VAT at 5% is mandatory once your revenue hits AED 375,000. Corporate tax at 9% applies to profit above AED 375,000. Every company must file even at zero. The cheapest outsourced bookkeeping plus audit in a free zone runs AED 4,000 to 8,000 a year. Forget to register and penalties start at AED 10,000.
Closing a Company: Do Not Skip This
Shutting down properly costs AED 5,000 to 10,000 in government fees plus a final audit. Skip it and the free zone fines accumulate monthly. Leave the UAE thinking it will disappear — and you will be blocked at immigration on your next visit. Liquidate by the book. It is cheaper than the alternative.
Frequently Asked Questions
How much does it really cost to set up a company in Dubai?
A basic free zone license starts at AED 5,000 but true first-year costs typically reach AED 15,000 to 25,000 when you include visa fees, bank account setup, flexi desk, accounting, and compliance. Mainland setups with an office cost more.
What is the minimum bank balance for UAE business accounts?
Most UAE business accounts require AED 25,000 to 50,000 minimum balance. Dropping below triggers monthly fees of AED 200 to 250. Digital/neo banks have lower minimums but charge flat monthly fees of AED 99 to 150.
Is VAT mandatory in the UAE?
VAT registration becomes mandatory when annual revenue exceeds AED 375,000. The rate is 5%. Late registration carries a AED 10,000 penalty. Even if you invoice internationally at 0% (zero-rated), you must still register and file quarterly returns.
What happens if you abandon a UAE company without closing it?
Monthly fines accumulate from the free zone. Unpaid visa fees create a travel ban. You can be stopped at immigration on your next visit to the UAE. Proper liquidation costs AED 5,000 to 10,000 — significantly less than the consequences of abandonment.
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FAQ
1. 0 What is an LLC in the UAE mainland?
An LLC in the UAE mainland is a company structure that allows full access to the local market, trade with government entities, and sponsor visas. It requires compliance with UAE LLC requirements.
2. 0 Can foreigners fully own a mainland LLC?
Yes. Most business activities now allow 100% foreign ownership, though some regulated sectors may still need a UAE national partner.
3. 0 How long does LLC setup in UAE mainland take?
Typically 2–4 weeks, depending on approvals, documents, office registration, and business activity type.
4. 0 Is a physical office required for a mainland LLC?
Yes. A physical office or flexi-desk is mandatory and affects visa eligibility and staff quotas for mainland business setup UAE.
5. 0 Can a mainland LLC sponsor visas?
Yes. Shareholders and employees can be sponsored based on office size and approved activities. Investor visas last up to three years.
