The cost items of forming a company in Dubai
Licence, visa, office and renewal items, with when each is paid.
The cost of forming a company in Dubai is not a single figure. The fee paid at formation is only the first part of the budget; the real difference appears in the items that recur from the second year. Below, the items are grouped into three clusters, and the time each is paid is stated.
Cost falls into three clusters
What separates the items from one another is not their amounts but when they arise. The total paid by two companies working from the same list depends on which of these three clusters arise in each of them.
- Paid at formation: licence, registration and formation documents.
- Recurring for as long as the company is active: accounting, the year-end return and licence renewal.
- Arising only if conditions are met: VAT registration and returns, audit, visa.
The third cluster is the part most often calculated wrongly. Because these items do not arise in every company, they are not included in the first-year total; whether they will arise in your company depends on your activity, your licence and your transaction volume.
Items paid at formation
The formation cost is determined together with the choice of structure. The price, the visa quota and the customer base you can sell to depend on this choice; changing the structure later means a new formation.
- Formation fee
- From USD 5,120The chosen free zone, the activity and the office type change the amount.
- Typical timing
- 5-6 daysThis is a typical range. Because the authority's processing time is outside our control, no fixed timeframe is committed to.
- Choice of structure
- Free zone or mainlandThe deciding criterion is the market you sell to: a free zone suits customers outside the UAE, a mainland structure suits customers within it.
Items that recur after formation
For as long as the company is active, keeping accounting records regularly is a legal requirement. Keeping the records in bulk at year end can increase the risk of penalties and of incorrect tax calculations.
- Corporate Tax Registration
- USD 400One-off
- Monthly Accounting Service
- USD 350Monthly · starting price
- Financial Year End and Corporate Tax Return
- USD 420Annual
- Annual Company Licence Renewal
- USD 4,800Annual · average
Amounts are per item; monthly items are shown for a single month.
What does the monthly accounting service cover?
- Income and expense records
- Processing sales and purchase invoices
- Bank reconciliations
- Financial reporting
- Tax checks
- Regular financial advisory
Licence renewal is the most variable item on this list: the amount varies with the free zone in which the company is established, the activity, the office type and official fees. If the licence is not renewed the company cannot continue its activity; this item therefore has to be included in the second-year budget from the start.
Total cost of the first year
The calculation is based on the first 12 months of a newly formed company carrying out a standard activity. The lines below show the post-formation items added to the formation fee.
- Corporate Tax Registration
- USD 400one-off
- Monthly Accounting Service
- USD 4,20012 months × USD 350
- Financial Year End and Corporate Tax Return
- USD 420per year
- Free zone licence renewal
- USD 4,800per year, on average
- First-year total
- USD 9,820
Items outside the total
The items below do not arise in every company. They should appear in the budget table but should not be included in the total; if they were included, they could be read as though they arise in every company.
- VAT Registration
- USD 400If required · one-off
- VAT Return
- USD 350If required · each period
- Audit
- USD 1,400If required · annual
- Investor / Employee Visa and Emirates ID
- USD 1,953On request · per person
These items arise only when conditions are met or if you request them. We assess at a meeting whether they are needed for your company, and show those that are needed as separate items in the written quotation.
On the tax side, registration first, then the rate
Corporate tax registration is an obligation independent of the rate: after formation it must be completed with the Federal Tax Authority within the statutory period. The assessment of the rate becomes meaningful once registration is complete.
- Corporate tax
- 0% up to AED 375,000, 9% aboveCalculated on net profit; free zone companies are also within scope.
- Corporate tax return
- Within 9 months of the end of the tax period
- VAT
- 5%Registration is mandatory when the annual taxable supplies exceed the AED 375,000 threshold.
- Personal income tax
- NoneNo personal income tax is levied in the UAE on salaries or dividends.
This table shows the general framework. Application varies according to your activity, the place where management is exercised, your residence and the type of income. We do not provide personal tax opinions.
If you have a visa, the calendar is also an obligation
Once the visa has been issued, the permit remains valid as long as you enter the UAE at certain intervals. The period starts again with each entry. If this rule is not known, the permit may lapse without being noticed; it is therefore stated separately here.
- Investor residence
- at least once a yearFor an investor and partner residence, entry into the UAE is required at least once every 365 days.
- Employee residence
- at least once every six monthsFor an employee residence, the period is half as long: entry is required at least once every 182 days.
If the period expires without entry, the residence permit may lapse; in that case the process starts again. Following the entry calendar is the responsibility of the residence holder.
Three points when building the budget
- The second-year renewal should be included in the budget from the start. Licence and renewal items are the highest and most variable items on this list.
- Conditional items should stay outside the total but remain visible. A possibility included in the total makes the budget look higher than it is; a possibility removed from the list can later turn into an unforeseen expense.
- For timing, a typical range rather than a fixed date should be used as the basis. The official authority's calendar is a variable of the process, not of the budget.
Timelines are typical ranges. The authority's and the bank's calendars are outside our control.
Related serviceDubai country pageChoice of structure, process steps and all post-formation items.View the ServiceThe amounts are taken from the post-formation obligations list of Ortac Accounting Services LLC, and the tax framework from the table published on the Dubai country page.
Amounts are in USD and exclude VAT unless otherwise stated; they are updated if official fees change. Periods are the timetables set by legislation; as the authorities' processing times are outside our control, we do not commit to fixed timeframes. Which items arise for your company depends on your activity, licence and transaction volume.
