What is the cost of LLC in Dubai?

LLC is one of the most sought-after business structures in Dubai due to its minimal investment needs, better credibility, and access to various networks. However, the major obstacle in this plan is the cost involved, which varies depending on several factors. Therefore, it is important for both established business owners and budding entrepreneurs to have a clear idea about the LLC company formation cost in Dubai to make the entire process easier and smoother.

This blog will walk you through the process and benefits of LLC formation in Dubai, giving a general overview of the significant costs involved.

Reasons to set up an LLC in Dubai

When planning a business setup in Dubai, business owners are given two choices – the Mainland and the Free Zone. Both jurisdictions have their own pros and cons, and business owners can make their selection based on their business needs and objectives.

LLCs (Limited Liability Companies) are the most preferred structures in the Mainland. Here’s why –

Unrestricted Access to the UAE

Setting up an LLC in Dubai allows business owners to access the UAE market as well as the international markets. This means they can trade with anyone without any restrictions. Unlike free zones, they are not restricted to a specific zone. Furthermore, they can set up multiple branches and solidify their presence in the market, thereby gaining more flexibility and freedom to operate their business.

Ability to Partner With UAE or GCC Government

LLCs have more flexibility than free zone entities. LLC owners in Dubai can compete for lucrative government contracts and collaborate with them for their projects. Working with the government helps them earn their trust, laying the foundation for a long-term professional relationship. This association further enhances the reputation and prestige of your company, attracting attention from other entities in the market.

Ease in Diversifying Business Activities

There is no restriction on foreign currency in the Dubai Mainland. Furthermore, the advanced infrastructure, pioneering technology, and less restrictive and flexible setup process propel success and growth for the LLC.

Flexibility in Ownership

LLCs can be formed in Dubai with two or more (up to 50) shareholders from different nationalities, offering flexibility in ownership structure.

Wide Range of Business Activities

LLCs are allowed to choose from a broad pool of business activities and diversify their operations.

Simplified Process

In this era of digitalization, where all processes are digitized, LLC company formation in Dubai is straightforward with minimal paperwork and simpler rules.

Instant Licenses

The Instant License initiative allows LLCs to obtain their licenses quickly and expedite the setup process.

No Minimum Share Capital

Although the DED does not mandate any minimum share capital requirements for LLCs, it approves whether the assorted capital is adequate for the planned projects.

Legal Protection

LLC operates as a separate legal entity and protects its members from any business liability and disputes.

Limited liability of each shareholder

In an LLC, the liability of each partner is limited to their shares or investment in the company’s capital, thus protecting their personal assets.

Tax benefits

Dubai has an unparalleled tax environment with a 0% personal income tax rate and a very low corporate tax rate for businesses earning beyond the specified threshold. This means that if they earn below this threshold, they are exempt from paying any corporate tax.

Residency visa option

LLC owners can apply for multiple visas for their family members, work visas for their employees, and a golden visa for themselves if they meet the eligibility criteria.

Flexible office location

LLC owners can select any location for their business and acquire top-notch office space for their operations.

Breakdown of the LLC company formation cost in Dubai

The LLC company formation cost in Dubai varies based on several factors. Let's discuss them individually –

Startup setup cost – The investment required to start the business is called the setup cost. It typically includes equipment costs, office space rent, and employee salaries. Since it is a significant part of the overall cost, the business owner must analyse all expenditures and prioritize what’s more important in order to manage their expenses in a better way.

License cost – The business license is a legal document issued by the authorities, authorizing the business owner to conduct their operations in the UAE. The choice of license depends on the primary activity of the company. For example, industrial, commercial, professional, etc.

Trade name registration cost – Business owners are required to reserve their desired company name with the relevant authority to prevent duplication. The cost can vary depending on the chosen name and may include additional charges for a foreign name.

Notarisation of Memorandum of Association (MOA) – The MOA needs to be notarized for legal validity and to ensure the authenticity of the signatures. This is a one-time expense shared among the shareholders.

Business registration fee – The Department of Economic Development (DED) registers businesses in the Dubai Mainland. The registration fee is a one-time expense, which includes -

Trade license fees

Special activity fees

Administrative service fee

Chamber of Commerce fee

Knowledge Fee

Employment visa and salary – This cost can vary significantly based on their experience and expertise of the employees.

Office rent - Dubai Mainland requires businesses to acquire an office space to conduct their operations. The cost depends on factors like location, area, etc. The business owners can consider cost-effective options that meet the requirements of the authorities.

Bank account opening charges - Opening a corporate bank account is a one-time expense. Dubai has several banks offering various account features and services tailored to the specific needs of the business. Through comprehensive research and evaluation, business owners can find an account that aligns with their financial activity and growth plans.

Cost of operations – Business owners must ensure to allocate additional funds for unforeseen expenses like license renewals, utility bills, insurance coverage, and maintenance charges for equipment or office space.

Tips to reduce the LLC company formation cost in Dubai

Here are some key pointers to cut the cost of LLC formation in Dubai –

Pick a location that aligns with your business needs and offers reasonable rates.

Evaluate your business needs and choose the most appropriate license.

Explore virtual office options to avoid the expense of physical office space.

Opt for a single-owner LLC or limit the number of shareholders to minimize initial costs.

Seek professional help to navigate the legalities effortlessly and ensure a smooth registration process to save time and money in the long run.

LLC Company Formation in Dubai: Step-by-step process

To open an LLC successfully in Dubai, you need to make critical business decisions and complete several legal procedures that include the following steps –

Select a business activity – The LLC owners can choose from over 2000 business activities and find their desired one from the list. Make sure to research the market, learn about potential clients and rival companies, and find a competitive advantage for your brand.

Register the company name – Name your company based on your business activities and legal structure, and get it registered with the relevant authorities. Consider your offerings, future goals, niche, business values, USP, etc., while deciding your company name. Keep more than one option to ensure availability and adherence to the naming guidelines of the UAE government.

Find a location - Find a location based on your budget, activity, workforce, infrastructural and technological requirements, accessibility, proximity to transportation services, etc. Later, enter into a lease or rent contract. If you need help with the legalities of the contract, consult our experts.

Create and submit the MOA – Draft an MOA outlining the range of business activities, the ownership structure, shareholders’ information and rights, and founding goals. Submit the MOA to the concerned authorities, along with the lease contract.

Apply for a license – Choose a license based on your activity and apply to the DED. Certain activities may require additional approvals and permissions from specific government bodies. Therefore, business owners need to be mindful of this while choosing their business activity.

Obtain the license - Once the application and documents are verified, the DED will issue the LLC license and make the company a part of the UAE’s business ecosystem. Licensed LLCs can also take advantage of government initiatives and be a part of their projects.

Launch your LLC with Shuraa Business Setup

Shuraa consultants have the expertise with company documentation, business registration, license and approval acquisition, and other specific business requirements. They can offer specialized packages based on your business setup needs.

Contact Shuraa Business Setup today.