Renting a standard office for your company is a very exciting step for every entrepreneur. How many times you imagined that ONE DAY you will be a business owner having your own office, where you will be working and meeting you potential and existing clients? How cool is that to come to your office every day and understand that this is your achievement and that so many interesting opportunities are there awaiting you in the next days, months and years.
In this chapter we will help you to understand when you DO need a standard office, what are the main advantages and disadvantages of having it, how to rent a standard office, when you should have it, whether your company can or cannot have 2 or more offices, how many visas you can get for your office space, whether you can have 2 companies in one office and why you need lease registration certificate for your office. Let’s look at all these aspects step by step.
A standard office is a commercial space, from where your company may conduct its business activities. As you remember it, there are three major types of companies in the UAE: offshore, free zone and mainland. Since offshore companies are not allowed to work inside the country, in the UAE, and, therefore, are not allowed to rent any facilities in the UAE, we put offshore companies aside. You MUST have a standard office, if you want to register a mainland company, or you MAY have a standard office, in case you are planning to form a free zone company. You may wonder, why is it that a mainland company MUST have and a freezone entity MAY have a physical office. If you skipped the previous chapter, there we discussed that it is not mandatory for free zone companies to rent a real physical office, as you can avail from flexi-desk facilities or merely avail from legal address option, depending on the registration package you choose with each specific free zone authority. Unlike free zone companies, which can rent flexi-desks, mainland/local companies MUST lease commercial property.
Now let’s discuss the main advantages and disadvantages of having a standard office for your business. And I suggest we start with advantages.
Advantage No.1 – you are in full control of your office and it is up to YOU only if you want to work there 8 hours, 15 hours of 24 hours. It’s up to you, as you rented it, and YOU decide how and when to use it. In comparison to using a flexi-desk with limited number of working hours per month, this option is a really big advantage as you always require much work to be done in the first months after setup.
Advantage No. 2 – you can meet your prospective clients in YOUR own office, and you don’t need to book a meeting room in a business center in advance or try to find a place for a meeting, if you rent a flexi-desk. Knowing from experience, sometimes clients feel more comfortable discussing their projects online, on skype, for example, but some clients do want to see you live in person, to have a look at your office, from which you operate, and maybe even talk to your staff to understand whether to work with you or not. So, client wise, that may also be one of the reasons client decides whether to work with you or not: when they see you are real, you have a real office, and you have a really good offer.
Advantage No. 3 – you can have as many resident visas for your staff, as your office space allows you to. The general rule is having 1 resident visa per every 9 sq.m. of your office space. It means that if you have an office space of 50 square meters you can get 5 resident visas for yourself and your future employees. Regardless of your activity or license type. But again, visa allocation requirements may differ from emirate to emirate and from registration authority to registration authority.
Advantage No.4 – standard office allows you to separate your work and your home environments. Of course, when you start your business you can work from home, but trust me, there will be a moment when you have so many papers and stuff at home, that you will no longer wish to keep it at home but rather move everything to the office.
What about disadvantages then?
The only one we were able to identify is that you need money for renting a standard office. Renting office in Dubai will require considerable investments.
Now that you know all pros and cons, let’s have a closer look at the rent of an office space.
Rent of a 30 to 40 sq. meter office can cost you around AED 40,000 annually, if rented in such area as Deira, between AED 60,000 to AED 80,000 per year for office of 60 to 80 sq. meters in JLT or Business Bay and even more then that, in case you decide to be based at such primary locations as Dubai Marina or Dubai Downtown.
If you wish to have a closer look at currently available options for rent, you can check them on Dubizzle, https://dubai.dubizzle.com, a commonly used web-site in the UAE. There you will find offers for commercial rent directly from landlords, as well as from real estate agents, marketing owners’ properties.
You should be aware that rent is usually paid in the UAE in installments by bank cheques. You will learn more about the cheques in the coming modules. Payment is made either for the whole year in advance or by two or maximum four cheques. Apart from paying the rent you will have to pay a security deposit for the office, real estate agency commission, buy furniture and electronics, connect all utilities, connect internet and pay relevant fees and deposits for all of that too. So, you need to budget all of that in advance. You will also need to pay utilities, internet and phone bills every month.
Another important point to mention is where you can rent your office. In case you are registering company in a specific free zone, you will be able to rent commercial property only there. However, if your plan is to incorporate a mainland/local company, you will be able to choose any mainland area outside of free zones, which is also Dubai Marina and downtown areas, as well as Business Bay, Al Barsha, Deira, Karama and more. Also, if you have a license issued in a specific emirate, your office should be based in that specific emirate, otherwise you will need to open a branch in another emirate or utilize meeting-room services of a business center, to be able to conduct one-off meetings with prospective clients.
But at what point of time of a company registration process one should rent an office space? Here is the answer: after initial filing of the documents for company formation, after trade name approval, after signing corporate documents, but before receiving your company’s license.
After you choose the office and sign a lease agreement, you will need to have your lease registered. In Dubai you can have your lease registered in Ejari system, right after the contract is signed. In Abu Dhabi, however, for example, you first need to connect utilities, only then you can register lease contract in Tawtheeq system. Registration certificate for lease property, be it Ejari or Tawtheeq, would be required moving forward in day-to-day operations of the company. Additionally, in case of the dispute with the property’s landlord, to be able to file a case a lease contract needs to be registered too.
If you are wondering if you can have 2 or more offices for 1 company? Yes, you can have 2 or more offices for 1 company, if they are located on one and the same floor, or at least in one and the same building. In both cases, approval from relevant registration authority shall be first sought. Otherwise, you will need to register a new company as a branch office or as independent legal entity.
Another frequently asked question is whether one can have 2 companies operating from one and the same office? In rare cases it is possible. This is subject to approval by relevant registration authority and meeting specific requirements (for example, it may be required that companies shall have same owners and each company might need to occupy a specific area, say 50 to 80 sq. meters).
Now that we discussed everything you should know about renting a standard office space in the UAE, let’s move on and see you in the next chapter.
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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