Whether you are aware or not but there are over thirty (30) free zones in Dubai alone. Due to such abundance of free zone areas, a question related to the Dubai freezone company setup cost is among the first ones we receive as business consultant professionals. The reason for this is that often entrepreneurs wish to research and to determine the most cost-effective option for registration, before choosing a specific Dubai freezone company setup. In light of this, it is extremely important for us to walk you through various Dubai freezone company formation options now and explain how the pricing changes from free zone to free zone. This will make you much more comfortable, when taking a final decision with respect to the area, where you want your future business to be located.
How do usually entrepreneurs decide about those specific free zones that could be considered for set-up? There are so many of them in Dubai alone, that one can get easily lost in the months and years of research. Based on the years of relevant professional experience, we came to a conclusion, that the choice of a specific free zone is often a result of a recommendation by a business partner or a close friend. A friend of yours is highly speaking of Jebel Ali Free Zone, as he conducts trading business in the free zone and is happy with facilities, infrastructure and proximity to the port. Therefore, he recommends you the same set-up option for your service business. Secondly, often entrepreneurs associate the name of the free zone with their future line of business. For example, you are planning to do software development, therefore, Dubai Internet City free zone or Dubai Silicon Oasis free zone sound very much in line with your business needs. However, as soon as you start researching free zones you have in mind, a new question arises: how to minimize expenses related to Dubai freezone company setup, because at the moment you are a one-man-show start-up and you want to keep your costs at a minimum, at least in the first year. Here is where the hunt for the best price begins.
Now that we will be comparing different free zones, we will be not looking at the cost of the license only. We will also look at other aspects, which may significantly affect Dubai free zone company formation cost. Let’s first outline all those types of investments that cause the total cost of Dubai freezone company formation to go up or down. These would be the following: registration fee, license fee, flexi-desk rental costs or ability to rent a flexi-desk in the free zone in general and share capital requirement.
Registration fee. Registration fee is a one-time fee that you pay in the first year only. The same varies from free zone to free zone and can be as little as a couple of thousand dirhams up to AED 9,000 or even AED 10,000. Since you want to bring your annual operational costs down, it may be not helpful to focus on the one-off registration fee alone, as with relatively low registration charge you may get pretty much high license fee. As such, registration fee alone shall be not a determining factor, when choosing this or that free zone for your business incorporation.
License fee. License fee, unlike registration fee, is paid annually and it is also different across various free zones. The price range of the same is from AED 2,500 and it may even go up to AED 50,000. Additionally, license fees may vary within the same free zone, based on the types of business activities you choose for your license and their quantity.
Flexi-desk rental fee. Flexi-desk rental price range is not that wide as in the case with license fee. You will be able to avail from flexi-desk facility at a relatively same cost across most of Dubai free zones and this would be approximately from AED 10,000 to AED 20,000 per annum. What is important to note, not all free zones in Dubai offer rent of a flexi-desk facility. Some also allow rent of a flexi-desk in the first year only and make it mandatory to move to the standard office from the second year onwards. For example, latter is the requirement of Dubai Airport Free Zone. As such, you need to budget this in advance. There are other free zones, that do not provide flexi-desk facilities at all and you need to rent a commercial space. Some free zones provide a flexi-desk facility for rent with a quota for one visa only, whereas the cost of rent is relatively high and may be AED 30,000 a year, as it is the case with Dubai Internet City.
Share capital. Share capital is one more aspect all entrepreneurs shall be looking at from the start. Since at the start the budget is relatively low, businessmen pay attention at those options, where physical depositing of share capital into company’s bank account can be avoided. Or, as an alternative, they look for the options, where requirement with respect to share capital is minimal. In Dubai most of the free zones require you to deposit a minimum of AED 50,000, that will be declared as a share capital of the company. However, there are also other free zones in Dubai, which allow to establish a company without immediate depositing of share capital funds and Dubai South (former DWC free zone) is just one example. DMCC also introduced some changes and since recently allows to open a bank account and deposit funds without freezing them after the company is successfully registered.
To summarize, Dubai freezone company setup cost depends on your choice of free zone for set-up. If your budget allows it and you have already proven you business concept, so that you know it will work, Dubai freezone company setup can be preferred.
However, there is no single recipe for everyone. Each single free zone in the UAE with no exceptions provides a certain number of benefits that can be interesting to you or someone else.
If you want to know more about Dubai freezone company formation, feel free to get in touch with our professional consultant team and we would be delighted to assist you and help you to compare Dubai freezone company setup costs and help you to find that free zone, which would suit your business needs the most.
Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.
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