All you need to know about low cost business setup in Dubai

First of all, we know that Dubai is a famous business environment. Its ever-growing economy, location and tax policies make it an attractive place to start new businesses. But we know that being such a glittering city perhaps starting a low cost business setup in Dubai may sound overwhelming.

In this article we will tell you everything you need to know to start your low cost business setup. It is easier than you may think, thanks to the lack of corporate and personal taxes. what are you waiting for to know all the steps you can follow to understand more about low cost business setup in Dubai?

Importance of Low Cost Business Setup in Dubai

low cost business setup in dubai

Starting a low cost business setup in Dubai is exciting as we possess many benefits. The importance of these makes Dubai a favorable environment for the growth of our business. Let us take a look at some reasons why the low cost business setup in the Dubai is so important:

  • Supporting the growth of SMEs: Small and medium-sized enterprises (SMEs) are important to the country for economic and social growth. In addition, Dubai provides us with the platforms and resources we will need to thrive and have long-term sustainability.
  • No taxes on personal or corporate income: Remember that Dubai does not charge taxes on our personal or corporate income. This means that we can keep more profits and invest them in our low cost business setup in Dubai.
  • Incredible location: Being a city with a strategic location gives us access to markets in Africa, the Middle East, and Asia.
  • World-class infrastructure: We also have a world-class infrastructure. This facilitates business growth.
  • Low cost of living: We also have a reasonable cost of living compared to other major cities. This gives us the benefit of spending less on our lifestyle.
  • Multilanguage: Dubai also has a wide range of languages spoken, one of the most common being English, which will facilitate business communication.

Cost for Low Cost Business Setup

We must also keep in mind that determining low cost business setup in uae may vary. For example, the location, the type of license, and the structure of our company. But leaving that aside if you want to have an idea of how much it might cost here are some estimates:

License Fees

  1. Free Zone Business Setup
  • Cost: On average AED 12,500 for an LLC (Limited Liability Company) business license in a free zone.
  • Contribution: This gives us the LLC business license, three commercial activities, and a lease agreement.
  • Advantages: we will not have to pay taxes, no customs duties, no currency restrictions with the possibility to repatriate 100% of our capital and profits.
  1. Mainland setup
  • Cost: It may vary, but it is always higher than the free zones.
  • Contribution: It will give us a commercial license, registration in the continent, and other requirements according to our commercial activity.
  • Advantages: We will have access to government contracts and the local UAE market for our low cost business setup uae.

Office Space Rental

The average cost for an office of approximately 18.6 square meters which can accommodate 3 people can range from 1,500 AED to 6,500 AED per person per month. This includes internet, meeting rooms, audiovisual equipment, parking, reception services, break areas, and a kitchen.

Sponsorship Fees

The total cost may vary depending on the personal situation, but on average can be between AED 5000 to AED 10000, depending on the employer and the visa category. The sponsorship fees for obtaining the employment visa may include the following parameters:

  • Application fee.
  • Visa issuance fee.
  • Medical fee.
  • Annual residency fee.


Utilities in Dubai are regulated by the Dubai Water and Electricity Authority. Please note that if you rent an office, you will have all these fees covered without having to pay them directly.

Air conditioning, cleaning and maintenance, 24/7 security, and parking may also be included, all of which vary depending on the office you rent for your low cost business setup uae.

Employee Salaries

The salary of our employees may vary according to the industry, the size of our company, and the experience of our employees. But if you want a view on averages here, we will give you relevant information to keep in mind about low cost business setup in uae:

  1. Average salary in Dubai:
  • The average salary is 268,000 AED per year (70,256 USD approximately according to 2023 exchange rates). In addition, it is important to note that salaries vary according to occupation, education, and experience among other factors.
  1. Average salary and salary range:
  • The average salary in Dubai is at least 19,000 AED. It also ranges from AED 4,810 to AED 99,000 per month. Salaries between the average minimum and average maximum are also included in this range.
  1. Labor cost:
  • The annual cost of salaries for a small company could be between the range of 160,132 to 214,744 USD. In addition, this always varies depending on the type of company and employees. Remember that this is an approximation and you should always seek financial assistance for more precise details.

Renewal Fees

An estimate of the cost of a small business license for low cost business setup in the Dubai is generally similar to the initial registration fee between 5,000 and 28,500 AED.

It is also important to renew in time as failure to do so can result in a penalty of between 10% to 50% of the renewal fee. Also, keep in mind that these are general estimates that may vary.

Legal Requirements for Low Cost Business Setup in uae

As with any low cost business setup startup, we need to know what are the legal requirements that may be required for the creation of a company. Being well-informed about these issues and knowing how to confront any problem is a key factor for the creation. Let us see some points to keep in mind.

  • Obtain a license according to our business: First of all, we must obtain a proper license to ensure legal compliance and operate our low cost business setup in Dubai legitimately. In addition, we must establish the naturalness of our business and apply for a specific license to practice it.
  • Determining the legal structure: We must also choose a good legal structure for our business, whether it is a sole proprietorship, an LLC, or a foreign company entity.
  • Name approval: Then we must make sure that the name for our low cost business setup in Dubai is approved and complies with all regulations.
  • Share capital: we have to determine and deposit the required share capital according to the regulations. This may vary according to the type of company we want to set up.
  • Local sponsorship: We will have to comply with UAE regulations regarding local sponsorship, this is for certain types of businesses.
  • Insurance: Depending on our business we will need to have some types of insurance. For example, civil insurance or employee health insurance.
  • Office space: We will need to have a valid physical address for our office. This can be a real office space or a virtual one, depending on our budget and type of low cost business setup in Dubai.

Types of Licenses

low cost business setup in dubai

  1. Commercial License:
  • Applies to companies engaged in the purchase and sale of goods. It covers general commercial activities and allows us to operate in the commercial field. It is also suitable for import, and export companies, stores, etc.
  1. Professional license:
  • This license is for companies that offer professional services. For example, accounting, law, engineering, etc. Furthermore, it only applies to service activities and does not apply to the sale of physical products.
  1. Industrial License
  • This is required for companies engaged in the manufacture or product of goods. It also covers industrial activities and allows us to establish a manufacturing plant.
  1. Tourism license:
  • Aimed at companies in the travel and tourism industry. It also does not allow operating travel agencies, tour operators, and other related businesses.

Application Process

To establish a low cost business setup in Dubai the application process may vary depending on the type of license we need. Let us see the general steps for the process of obtaining one:


  1. Identify the business activity:
  • We must choose a specific activity for our low cost business setup in Dubai whether it is trade, tourism, commercial services, etc.
  1. Selection of legal form:
  • We must choose the legal form of our low cost business setup in Dubai whether it is a limited company, sole proprietorship, etc. Also, this step will affect the requirements and regulations.
  1. Registering the business name:
  • We must also apply for approval of our business name at the Department of Economic Development. Also, do not forget that our name must comply with the guidelines and must not be duplicated.
  1. Applying for a business license:
  • You must apply to have a business license. We will also need to provide details about our business activity, location, and requirements.
  1. Drafting the Memorandum of Association (MOA):
  • If we have partners, we have to draft an MOA that gives us to understanding of the terms and conditions of the partnership in our low cost business setup in Dubai.
  1. Obtaining additional approvals:
  • Depending on our activity in our low cost business setup in Dubai and location, we will need to have additional approvals from other government entities.
  1. Paying the fees:
  • Finally, we will have to pay registration and licensing fees according to the regulations.

Taxation Laws

  • Personal income tax:
    • In Dubai there is no personal income tax. this means that there is no tax on salaries or personal income.
  • Value Added Tax (VAT):
    • In Dubai a 5% vat is levied on all purchases of goods and services. This applies at each stage of the supply chain.
  • Excise tax:
    • Also, in Dubai a special tax is applied to some goods that are harmful to health, such as tobacco, cigarettes, and sugary drinks.

Labor Laws

In Dubai labor laws are regulated by the FEDERAL DECREE LAW N33 OF 2021, there are several labor laws and rights for employees in the private sector, and apply to all employees working in the UAE. Let us see what these laws are:

  1. Hours of work and rest:
  • A maximum of 8 hours of work per day or 48 hours per week is established. In addition, employees are entitled to weekly rest days and paid annual leave.
  1. Employment contracts:
  • Contracts must be clear in terms and conditions. Also including wages, contract duration, and job responsibilities.
  1. Termination of Employment:
  • In addition, the law provides us with procedures for terminating employment, including notice periods and severance payments.
  1. Termination gratuity:
  • Employees are entitled to a gratuity for termination of our services after completing a continuous period of employment.
  1. Occupational health and safety:
  • The law also establishes rules for us regarding safety and health in the workplace. Employers must provide us with a safe environment and comply with all safety regulations.


In conclusion, we were able to have an estimated idea of the cost of creating a new low cost business setup in Dubai, following the rules, fees, and types of licenses required to make our idea a reality.

Also, remember that if you want to make the best low cost business setup in Dubai you must be clear about what kind of company you are going to create and your audience in general.

Connect Business Center

remember that you can read about this and more topics in our blogs section and that you can call us at +971 4 331 6688, or write to us at, we will be waiting for you.

    Request a Free Quote

    Please fill out the information below

    Related Posts