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The Required Minimum Investment to Start Business in Dubai

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minimum investment to start business in Dubai

The main reason Dubai is one the richest cities around the world is not only because of tremendous tourism visits for its mesmerizing landscapes, but also because of being referred as the “City of Gold” for its advantageous location and outstanding business prospecting opportunities.

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What makes Dubai the modern capital of business in the world?

That’s why this business hub attracts entrepreneurs from all around the world for its remarkable business-friendly environment. However, there are specific necessities to launch a business in Dubai ranging from location, and cost, to legal, and business affairs.

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Minimum investment to start a business in Dubai based on the location 

Starting a business in Dubai as a foreigner is set to be in different locations for an unrivaled success in the region. These locations are divided into 3 categories that are:

  1. Mainland Company: This category is mostly beneficial for local residents because it enables them to conduct business across Dubai locations and beyond. Taking into consideration, the company is eligible for conducting business when being operated by UAE local ownership of 51%. And the remaining ownership could be for foreign investors.
  2. Free Zone Firm: This category is the most favorable one amongst others due to its variety of commercial facilities and business services with 100% foreign ownership capability. This category includes major industries such as technology, healthcare, media and others.
  3. Mainland Company with Minimum Investment: This category depends on the presence of a local sponsor just the 1st category. But what makes this category differ is that it offers greater minimum investment than that appears in free zones. Although, it varies depending on the type of the business, and the region selected, the minimum investment  approved can start with 50,000 AED. 

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Types of locations for launching a business in Dubai

There are different types of minimum investment to start a business in Dubai applicable based on the locations the firm is launched on, that’s why it’s significantly important to review the financial benefits for these 2 options. These options are:

  1. Mainland: 

The minimum investment to start a business in Dubai for this area can vary significantly depending on several factors such as:

  • The business activity.
  • The specified location. 
  • The legal structure and attestation of the company. 
  • The visa permit.

The minimum investment for this area can range between 300,000 AED to 3 million AED. The reason behind the high amount of minimum investment is due to the necessity of a local UAE sponsor. Also, these numbers can differ according to the trade license type. For this reason, highly specialized businesses could incur larger expenditures based on additional business services cost.

  1. Free Zones:

Free zones in Dubai provide several significant benefits, particularly for foreign investors, such as:

  • 100% ownership.
  • Tax exemptions.
  • Easy legal setup procedures. 
  • The minimum investment to start a business in Dubai required for these zones can vary between 10,000 AED to 500,000 AED, but this depends on the chosen free zone and business sector.
  • Also, this business investment covers office space and extra business services that can change the whole cost of business expenditures.
  • Additionally, a Free Zone business license can be bought for 12,900 AED only.

That’s why Free Zones can be a little bit appealing for business owners who have a minimum investment to start a business in Dubai or have a limited cash freedom. For this sake, knowing the required procedures to launch a business in Dubai could be the next step.

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Required steps to start a business in Dubai

minimum investment to start business in Dubai

Following a particular process can be the guaranteed way for launching a business in Dubai from scratch. These procedures are: 

  1. Choosing a specific business activity: this first step is classified into three main categories of business activities identified by the UAE government that are: commercial, professional, and industrial. These categories have specific requirements and legal regulations that should be followed.
  1. Choosing a Legal Form: that basically determines the ownership structure of the firm, liability expenditures, and type of taxation required. Such that each legal form is formed of specific requirements and legal regulations that are set to be followed.

The most popular and common legal forms in Dubai are Sole Proprietorship, Limited Liability Company (LLC), and Partnerships. That’s why entrepreneurs should carefully choose a legal form that fits their business needs.

  1. Choosing a Trade Name: that the business owns to operate based on it. This trade name should be unique and must not legally violate any trademarks or intellectual property rights. As it should be registered with the Department of Economic Development (DED) or a free zone authority.
  1. Obtaining an initial approval: This initial approval is a must step before applying for a trade license. As this approval involves submitting the required documents for this process, such as passport copies, a business plan, and lease agreement. Moreover, this initial approval should be announced from the (DED) or a free zone authority.
  1. Obtaining an official trading license: it’s considered the final step for starting a commercial business in Dubai. As the type of the trading license varies depending on the business activity and the legal form chosen. Also, this license can be obtained and renewed from the same authority whether the Department of Economic Development or a free zone authority.

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Minimum investment to start a business in Dubai based on the cost

It’s always about priorities that an entrepreneur or an investor sets for himself to achieve continuous success. Based on the plan set, the choice might settle for launching a business in the Mainland zone or a Free zone. Not only business expenditures determine where to start a new business in Dubai, but also the beneficiary revenues from starting this business.

From this point, reviewing all the expenses & revenues conducted from starting a particular business makes the difference. After previewing the location, steps, and minimum investment to start a business in Dubai, now it comes for calculating expenses.

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Dividing the required costs to start a business in Dubai

Initial Setup Costs: Firstly, the initial costs for setting up a business includes office space rental, and visa fees for staff recruitment, as well charges to the Ministry of Economy, and the Dubai Chamber of Commerce. These costs can reach up to 34,340 AED for first-year operating expenses.

Business Licensing Costs: The trading license costs from 10,000 AED to 50,000 AED per year, as the renewal fees for this license ranges between 11,000 AED to 13,000 AED.

Labour Costs: The ranging salary in Dubai is between  4,810 AED to 99,000 AED per month, with an average median of 21,500 AED per month. 

Overall Costs: The cost of a running business in a fully serviced office space, with 5 employees, telephone, electricity, water and internet expenses, with a mainland license, ranges from 300,000 AED to 900,000 AED.

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What types of business can we start with 50,000 AED in Dubai

There are different types of business ideas that can start with 50,000 AED in Dubai mostly are digital ones including:

  • Digital Marketing Agency: that’s responsible for content creation, media buying, SEO optimization, and more.
  • Freelancing: for various services such as web development, and graphic design.
  • E-commerce Store: specialized for selling digital services.
  • Catering Business: that’s an ideal business idea for unique cuisines with a niche audience, and for foreigners too. 

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Minimum investment to start business in Dubai for foreigners

minimum investment to start business in Dubai

Starting a business in Dubai for foreigners is similar to residents with slight changes, that’s why there are various business opportunities for foreign investors across multiple sectors such as real estate, logistics, oil and gas, beauty salons, construction and medical healthcare. 

As the UAE economic policies facilitate the foreign investments through a feasible taxation system, huge access to natural and financial resources, and vital trading opportunities. Hence, the required minimum investment to start business in Dubai from India might not exceed 500,000 AED for the first-year operational activities.

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Minimum investment in Dubai for residency in 2024

The minimum investment in Dubai for residency varies depending on the business activity, structure, and the chosen zone for launching the firm. 

As the minimum investment for a free zone license in Dubai might be ranging from 10,000 AED to 50,000 AED or more. In addition, office space, license renewal fees, and visa charges, that depend on the size of the company. Lastly, the overall cost for starting a business in Dubai for residents can vary between 400,000 AED to 1 million AED.

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Conclusion: Summarizing all about minimum investment to start a business in Dubai!

Dubai is a business-friendly environment that’s inclusive to different kinds and types of business activities attracting vast entrepreneurs from all around the world. That’s why the minimum investment to start a business in Dubai is applicable to be paid, it just depends on the business type and legal form for launching the business. 

Although entrepreneurs who launch free zones businesses follow additional legal steps, they obtain a lot of advantageous benefits than those who set up their businesses in the Mainland zone. Hence, it’s an open choice for entrepreneurs to make up their own success in Dubai.

FAQs:

Who can own 100% ownership of a business in Dubai?

For residents, it’s applicable to own 100% of their business in a Mainland in Dubai, on the contrary, foreigners can own 100% of their business in a Free Zone in Dubai. That could be the major division in Dubai for business ownership but exceptions can always happen by the number of economic activities enlisted by the Department Economic Development.

Is Dubai considered a tax-free land for business owners?

Basically, it depends on the revenues rate businesses conduct per fiscal year. If business revenues don’t exceed 3 million AED, then it’s a tax-free land for them.

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