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Cost of Small Business License in Dubai

By Sakshi Srivastava - 25 Mar 2022 Last Updated: 28 Mar 2022
Cost of Small Business License in Dubai

Almost every investor's dream is to open a small business in Dubai. With business-friendly government regulations, a zero-tax environment, a high standard of living, and world-class infrastructural facilities, it's easy to see why more than 90% of Dubai's population is made up of foreign citizens.

Not a single business in the UAE can perform without a trade license, regardless of whether it is a sole proprietorship, a limited liability company, or a large business operation. As foreign nationals and investors turn their business ideas into reality, the number of new small businesses in Dubai is growing by double digits. In this blog, we will learn about the entire process of starting a small business and the cost of operation of a small business in Dubai.

Significant Factors Influencing the Cost of a Dubai Business License

There are some factors that influence the cost of a business license in Dubai.

Nature of the Business

In Dubai, business licenses are issued on the basis of the nature of the business, also known as the business activity or business type. The licensing structure is distributed primarily into four business types.

  • Commercial licenses are granted to trading and commercial entities
  • Professional licenses are granted to businesses providing professional services
  • Industrial licenses are granted to manufacturing companies
  • Tourism licenses are granted to travel and tour services.

The primary factor determining the cost of a business license in Dubai is the nature of the business.

Number of Company Partners

Another element that may have an impact on the cost of business licenses in Dubai is the number of company partners in a business. Suppose you have a small business with just yourself as a partner. That is the best way to keep costs low. Partnerships are also affected by the license that you choose. Some licenses, such as a commercial license in Dubai, require two partners, whereas a professional license allows you to be the sole partner in the company.

Rent of an Office License in Dubai

Looking to rent office space will raise your company's license costs by 2.5%. According to the Department of Economic Development's regulations, businesses must pay 2.5 % of the total rental payments toward the cost of a business license in Dubai. As a result, it is critical that you find an affordable office space for rent in Dubai.

Additional Approvals

The number of approvals and sanctions required is an important factor that can affect the cost of a business license in Dubai. Depending on the business activity, additional approvals may be required, which raises the cost of a business license in Dubai. Additional approvals are costs associated that will not be reflected in the cost of the business license.

Speak with an Advisor

As a small business, an examination of these factors may be advisable in order to reduce the cost of your small business license in Dubai. However, one of the best ways to deal with this issue is to speak with one of the best business setup consultants. The range and future of your venture are strongly influenced by your business license. The business license you choose not only describes your company's activity but also matters when it comes to expanding.

Documents Required to Set up a Small Business in Dubai

After the Registry Office has approved your company name, you must apply to the Department of Economic Development (DED) in Dubai for notarization of the company's Memorandum of Association (MOA) and Articles of Association (AOA).

In addition to your completed application form and business plan, you also must submit the following documentation to the DED.

  • Directors and shareholders must provide recognition and proof of address.
  • Copies of shareholders' and directors' passports
  • Confirmation of the company's name
  • Memorandum of Association (MOA)
  • Association of Articles (AOA)

 Advantages of Starting a Small Business in the UAE

  • The tax-free regime is the best part about starting a small business in Dubai. Furthermore, you can earn an extra 100 percent of your profits and capital gains. It should be noted that mainland businesses must pay a reasonable VAT of 5%.
  • Another advantage of forming a company in the UAE is the opportunity to discover various business sectors. The DED keeps an impressive list of over 2,000 permissible business activities.
  • UAE and, in specific, Dubai, are international business hubs. Investors and entrepreneurs from across the globe establish new businesses in Dubai. Collaboration with these companies provides you with a significant opportunity to expand your business on an international scale.
  • Dubai serves as a hub for international trade in the Gulf region. So, if your business engages in trading (whether online or offline), you can gain these benefits and increase your business on a global scale.

Conclusion

Several elements influence the cost of a small business license in Dubai. You won't have to think about them Dhanguard will handle everything relevant to business formation in the UAE. Furthermore, we provide expert advice for establishing your business. Our consultants provide complete procedural transparency. 

Dhanguard provides the business setup and company formation services in Dubai, UAE with the guidance of our professional team of consultants. Faster and hassle-free company setup in Mainland and Freezone in UAE.

Dhanguard provides faster and hassle-free Trade License with minimum paper work. With the guidance of our professional team of consultants you will get General trading license, Freelance license, Etrader license, Event Management License, Travel Agency license in Mainland and Freezone in UAE.

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