Dubai is a destination with a growing economy, a strategic location, and a centre for businesses worldwide. Entrepreneurs and investors are always attracted towards this place to build successful companies because of the various benefits and easy incorporation it involves.
However, business setup in Dubai consists of different legal structures, company setup costs, and tax compliances issued by the authorities.
In this article, we will concentrate on different factors that affect the Dubai Free Zone company setup cost and taxes applicable to the company.
Factors Affecting the Dubai Free Zone Company Setup Cost
There are various steps for a business setup in Dubai, and different factors affect the cost of opening a company in Dubai Free Zone. Let’s understand each factor and how they affect the price for formation
Primary Consultation Costs:
The first step of business setup in Dubai free zone is to get in touch with consultancy firms. Businesses must engage with business consultants and legal experts to understand the company’s documents, legalities, and other requirements, which incur various costs depending on the expertise and reputation of the service provider.
The next factor that affects the UAE free zone company setup cost is the registration costs. Each freezone has its own set of registration fees, and they may differ according to the needs. The approvals, licenses, etc., need registrations, each with different costs.
All kinds of business setup in Dubai must obtain a business license for further functioning of the business activities. There are various licenses suitable for each business activity, like commercial, industrial, or service licenses. The costs for obtaining these licenses vary from each other and depend on the number of steps involved.
Cheapest Free Zone License in UAE offering low-cost business license packages are:
- International Free Zone Authority.
- Dubai Meydan Free Zone.
- DUQE Free Trade Zone.
There are various other cheapest free zone license in UAE, like Ras Al Khaimah Economic Freezone, Umm Al Quwain Free Trade Zone, Ajman Media City Free Zone, Kezad Free Trade Zone, Masdar City Free Zone, Abu Dhabi Airport Free Zone and licenses in Sharjah. These packages range from 5,500 AED to 12,500 AED.
Office Rent Costs:
Renting office space is a significant part of the UAE free zone company setup cost. The costs of an office space depend on the location, size, nature of the business, and other facilities provided for the company.
Visa and Immigration Costs:
Employees act as a helping hand for any business setup in Dubai. If they are working for your free zone company, then the company needs to consider visa and immigration costs. Each free zone has its regulations for visa processing, various fees for visa applications, medical examinations and other related expenses.
There are various other cost of opening a company in Dubai free zone like fees for documentation, application forms, administrative fees, salaries, etc., and each vary depending on the complexity of the business structure and specific requirements of the chosen free zone.
Setting up a business in Dubai is highly beneficial for business owners. Still, it is essential to understand different costs, research, and compare the Dubai Free Zone company setup cost to make informed decisions and ensure a smooth and cost-effective company setup process.
Dubai Free Zone Company Taxes
With the UAE free zone company setup cost, it is essential to understand the various taxes imposed on the free zone companies of Dubai. It helps understand the compliance and ways to follow them reasonably in the company. The multiple taxes of a Dubai free zone company are as follows –
Value Added Tax (VAT):
Businesses are subject to a Value Added Tax (VAT) introduced by the UAE government. The standard rate in the country is relatively low at 5%, and this tax benefits businesses because it helps align with international taxation standards, contributes to public services and maintains transparency in business operations.
Corporate Taxes are imposed on companies whose income is 375,000 AED, and the rates of these taxes are 9%. This helps diversify the UAE’s income sources beyond oil while allowing the country to maintain its status as a regional commercial hub.
A free zone company in Dubai is imposed import/export taxes if the company is involved in transferring goods to different countries or bringing the goods from other countries. This tax rate starts from 5% and varies depending on the goods being brought or transferred.
Dubai free zones play an important role in economic diversification and global businesses' reputations. The tax benefits, strategic location, modern infrastructure, and business-minded policies make this destination attractive for entrepreneurs and investors wishing to build an impression in the Middle East.
Whether the costs involved in a Dubai free zone company setup or the taxes imposed on these free zones require thorough research, planning and decision-making, business owners must contact a consulting firm like Business Setup Worldwide and seek professional advice to ensure compliance with regulations and cost-effective ways to set up a free zone company.
With the guidance of our experts, you can easily understand the tax policies and effectively apply them in the company's favour. Contact us today to set up your Freezone company at feasible costs and pay taxes in time.
What tax benefits are available for Free Zone companies in Dubai?
Free Zone companies typically enjoy 0% corporate and personal income tax for a specific period, often renewable. However, it's crucial to stay informed about any changes in tax regulations.
Is it mandatory to have a physical office space in a Free Zone?
Most Free Zones require companies to have a physical office space within the Free Zone. The cost of office space will depend on the Free Zone and the size and location of the office.
What are the ongoing operational costs for a Free Zone company?
Ongoing costs may include renewal fees for the trade license, visa fees for employees, office rent, and any additional fees related to specific business activities.