5 Fees to Start Your Dubai SME Today
Dubai is a global hub, attracting thousands of Small and Medium-sized Enterprises (SMEs) every year with its location, tax environment and innovation. But for many foreign entrepreneurs, the first and biggest hurdle is the complexity of the Dubai business license cost.
Setting up a business is more than just choosing a trade name. It requires understanding the government fees that make up your UAE business license and legal structure. Whether you are going for a Mainland LLC or a Free Zone package, knowing where your money goes is the key to launching your business successfully and without any financial surprises.
This guide breaks down the 5 fees that make up the Dubai company setup packages, so you have a clear roadmap to get your business license in Dubai.
Why You Need to Understand License Fees for Your Dubai SME
In Dubai, the cost of your business license is not a one-time payment. It’s a package of government fees, administrative charges and facility costs, all of which depend on two main options:
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Your Jurisdiction: Mainland (regulated by the Department of Economy and Tourism, or DET/DED) or Free Zone (regulated by its respective authority).
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Your Business Activity: Professional (consultancy, services), Commercial (trading, retail) or Industrial (manufacturing).
Understanding these will help you look beyond the advertised starting price of many Dubai company setup packages and calculate the total cost for your business.
1. The Core Trade License Fee: The Foundation of Your Business
The Trade License Fee is the biggest chunk of your initial and annual recurring setup cost. This fee is paid to the relevant authority (DED/DET for Mainland or the specific Free Zone authority) to legally operate your business.
Key Factors Affecting the Base License Cost:
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Activity Type: A Professional License (for consultancies, IT services, etc.) is usually lower than a Commercial License (for general trading, e-commerce, etc.), as there is more regulatory oversight for trading goods.
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Jurisdiction Impact:
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Mainland LLC License Cost: Typically higher than a Free Zone license, ranging from AED 12,000* to AED 25,000* per annum, plus various government mandatory charges. The benefit is unrestricted access to the entire UAE market.
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Free Zone License Cost: Often bundled into packages starting from AED 8,000* to AED 18,000* for zero-visa packages. This cost is lower as the trade activities are restricted to the Free Zone or international markets.
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Number of Activities: Most licenses come with a set number of business activities. Listing additional activities outside the standard groups will incur extra fees (often AED 1,000* to AED 3,000* per extra activity).
Pro Tip: When choosing your business activities, be precise. Every additional activity group adds to the Dubai business license cost, so focus on your core services first.
2. Registration & Approval Fees: The Gatekeepers
Before you pay the main license fee, there are several smaller, non-refundable administrative charges to be processed. These are one-time fees that permit you to proceed with the legal formation of your entity.
Essential Initial Fees:
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Initial Approval Fee (AED 120 – AED 500): This is to confirm that the relevant authority (DED/DET or Free Zone) has no objection to the business activity and the nationality of the investor.
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Trade Name Reservation Fee (AED 620 – AED 900): A mandatory fee to reserve your chosen company name for a certain period. This must comply with UAE naming conventions (no religious names, no offensive language, must match the business activity, etc.).
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Memorandum of Association (MOA) Notarization (AED 1,000 – AED 2,000): Required for LLCs and other partnership structures, this fee is for the notarization of your company’s founding document.
These initial fees are part of the overall Dubai LLC license cost and are upfront costs before the main license is issued.
3. Office/Facility Fees Ejari & Market Fees: The Physical Presence Requirement
In Dubai, every business entity, big or small, must have a physical presence. This is achieved through a registered tenancy contract.
Office/Facility Cost Breakdown:
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For Mainland Companies: A physical office space is mandatory. You need to register for an Ejari, the government registration of your tenancy contract. DED/DET charges an additional Market Fee, which is 2.5% of the annual rent of your office space. This 2.5% is a hidden cost of the Mainland license structure.
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For Free Zone Companies: Free Zones offer more flexible and cost-effective solutions for SMEs and startups:
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Flexi-Desk/Co-Working Space: This is the most popular, low-cost solution, a shared workstation and a registered address. This cost (AED 5,000 to AED 15,000) is often included in the basic Dubai company setup packages.
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Dedicated Office: If you need multiple visas or a dedicated space, you need to lease a private office, which is much more expensive (AED 25,000+).
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4. Visa and Immigration Fees: Residence and Staffing
For foreign investors and their employees, the ability to get a UAE Residence Visa is a major selling point. The cost of visas is not part of the business license Dubai fee but is an operational expense directly linked to your setup package.
Mandatory Visa & Immigration Costs (Per Person):
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Establishment Card (Immigration File): One-time registration of the company with the Federal Authority for Identity and Citizenship (FAIC). (Approx. AED 1,500 – AED 2,500).
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Investor/Partner Visa Cost: This includes the entry permit, medical test, Emirates ID application and residency visa stamping. Costs range from AED 4,000 to AED 7,000 per person.
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Employee Visa Cost: Similar to the Investor Visa, costs vary based on the employee’s skill level and if the application is processed inside or outside the UAE.
Key Difference: Free Zone packages often have a fixed visa quota (e.g. 1-visa or 2-visa package) which bundles the facility and visa cost for a fixed price. That’s why many affordable Dubai company setup packages are advertised based on the number of included visas.
5. Government Mandates and Compliance Fees: Avoiding Penalties
These are the smaller, but necessary, annual fees that keep your company legally compliant and operational. Neglecting these can cost you much more than the fee itself.
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Chamber of Commerce Membership (AED 1,200 – AED 3,000): Mandatory for all DED Mainland companies and sometimes required for specific Free Zone activities.
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E-Channel Registration (Approx. AED 5,000): A security deposit and registration fee with the immigration department, so you can apply for an online visa and labour transactions. One-time fee with annual renewal.
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Local Service Agent (LSA) Fee (Mainland Only): For professional license activities on the Mainland, a UAE National Service Agent is required (though 100% foreign ownership is allowed). This agent gets a fixed annual fee (negotiated, often AED 5,000 to AED 15,000) for their service. This is a big factor in the Dubai LLC license cost comparison.
Conclusion: Your Smart Investment in a Dubai Business License
The journey to obtaining a Dubai business license for an SME can be simplified by breaking down the government fees from the bundled service costs. A lean Free Zone setup (license, flexi-desk, one visa eligibility) can start from AED 15,000 to AED 25,000 for the first year and a Mainland LLC with physical office starts higher, often in the AED 35,000 to AED 60,000+ range.
The "secret" to saving money is not finding the cheapest headline package but choosing the right jurisdiction and legal structure that matches your business goals. This choice makes a huge difference to the UAE business license cost.
How Can Flyingcolour Business Setup Help You?
At Flyingcolour Business Setup, we simplify the Dubai company setup packages landscape for foreign investors and SMEs.
Our expert consultants provide a clear, fixed-price breakdown of the 5 license fees, so you don’t pay any hidden costs or government surcharges.
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Jurisdiction & Activity Mapping: We will map your business model to recommend the best Free Zone or Mainland structure for your Dubai LLC license cost.
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Streamlined Documentation: We will handle all document clearance, initial approvals, trade name reservations and visa processing, so you don’t waste weeks on administration.
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Comprehensive Packages: We offer transparent, all-inclusive Dubai company setup packages that combine your license, office facility and visa quota into one annual fee.
Don’t let license fees hold you back. Partner with Flyingcolour to make your business license in Dubai journey fast, compliant and cost-effective.
Ready to launch your Dubai SME? Contact us today for a free consultation and a breakdown of your actual business license cost.