You always have 2 types of fees whenever you register a company in the UAE: governmental fees and 3rd party fees. We see governmental fees as obligatory and mandatory, the fees that you have to pay to register your own company, while the 3rd party fees are the fees of some non-process-involved company that help us do the same work that can be done without them.
Sometimes 3rd party fees are inevitable, when you HAVE to pay 3rd party fees in any event, like offshore agent fees, for example. We described in details why offshore registration process is designed in a way that you cannot register an offshore company without paying to a registered agent in our previous video, mentioning that this is a worldwide common practice of offshore company formation, UAE is not an exception here. If you want to refresh this information – please watch the previous video and you will understand why. In such cases, in a sense, agent’s fees can be considered an integral part of governmental fees as you cannot proceed without paying 3rd party fees in that case - they are obligatory.
Herein, we can say that external approvals from various ministries or governmental bodies are also a part of governmental fees, due to the fact that the overall process cannot be completed if this or that approval is not granted by the relevant authority and absence of such approval or no-objection-certificate prevents you from finalizing the process as it is considered a necessary step in the overall chain of registration procedure.
On the other hand, there are always such 3rd party expenses that do not imply OBLIGATION in the overall process but rather FACILITATION in the overall process of company establishment. We can say that lawyers, translators, business-consultants, etc. can be put in that list as almost every person can register a company on his own, he or she does not need any 3rd party for that, and UAE rules and regulations as well as governmental strive for digital economy are simplifying the processes in all areas of life and UAE is among the best countries in the world in terms of easiness and simplicity of opening a business.
So why do you need such 3rd party then? The explanation is simple – time is money. You may spend five to six months to learning, analyzing, comparing and choosing the best option for your needs – it will take lots of time and effort. And does not mean that you find the right answer as what you see online is sometimes very controversial to what really is, plus everything is changing and developing every day, and are you sure you can make the right choice without any experience? That is the reason why many business owners and investors save money and time – they find the real professionals with good experience and track record, and approach experienced and knowledgeable people as they save so much time and money.
What we see sometimes is that many people are so obsessed with their idea that they close eyes on everything else, and do not dedicate time to learn every aspect of company registration process thoroughly PRIOR to making their final decision on the form, type, and place of incorporation (as you are doing now), and that is one of the most common mistake that they later regret so much and moreover have to compensate by spending more time, more money and in the end seeking for professional advice. As Englishmen say We are too poor to buy cheap clothing. That is why you are on the right path, you decide to learn first and act later. You are saving so much money and time, you just don’t understand that.
So lets go back to the point. Lets, on the one hand, analyze the required necessary, obligatory fees that you have to pay in order to proceed with company formation, and, on the other hand, the 3rd party fees that you can save your money on. Let’s imagine three situations: you need to register an LLC company, a free zone company and an offshore company. What all of them have in common? The structure of the fees!
Firstly, the governmental fees usually include license issuance fees and corporate documents fees (like issuing and attesting Memorandum of Association, Articles of Association, Share certificate, etc.), sometimes they are mentioned separately, sometimes united, sometimes you pay the overall amount without any breakdown as unified lump sum of Company registration fees.
Secondly, in case of mainland company (be it LLC or sole establishment) and some free-zone companies, there is an obligatory governmental fee for Office rent. Sometimes it is paid as separate fee and sometimes it’s included into the Company registration fee.
When we deal with a mainland company, we have to find a local sponsor or a local agent, a UAE national that will serve as a partner of your company or as an agent. And here it’s a tricky thing, as usually the local sponsor or agent has his or her own service fee, a company that will FIND you such person may also charge extra for that. So if you want to save, you may try to find such person on your own, but we don’t recommend such scenario, as when you plan to do a really good business you need a partner that is trustworthy and potentially as active as you are, to help you promote your company as well.
Imagine you would like to establish a free zone company afterwards. The governmental fees will be there, the rental fees will be there (exception is totally virtual offices), but in that case capital deposit rules may apply. Some free zones do require the physical deposit of funds into the bank account of your newly established company. And these extra costs should be budgeted in advice.
Lastly, the registration of an offshore company consists of governmental fees and agent’s fees, but as discussed earlier both are necessary. So can hardly be considered as 3rd party. That’s all, as easy as that.
- If you register a mainland company (LLC or sole-establishment), you have to pay governmental registration fees + governmental office rental fees + local sponsor/agent fees.
- If you register a free zone company, you have to pay governmental fees plus/minus governmental office rental fees plus/minus capital deposit fees in some free zones.
- If you register an offshore company, you have to pay offshore agent’s fees and governmental registration fees.
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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