If you have set up a company in Dubai or are planning to start one, you are probably wondering how much it will cost to keep it running every year. While Dubai is known for its business-friendly environment, zero personal income tax, and strategic location, the truth is that there are still certain costs you need to account for when maintaining your company.
These ongoing costs depend on various factors such as your company structure, business activity, license type, and whether you are in a free zone or on the mainland. In this guide, we will break down all the essential costs that you should consider when planning your yearly budget for running a company in Dubai.
Why Knowing the Maintenance Costs Matters
Many entrepreneurs focus heavily on the initial setup cost and forget about the annual expenses required to keep the company operational. This can lead to unexpected financial stress later. By understanding these costs upfront, you can:
- Avoid surprise expenses that might disrupt your cash flow
- Plan for renewals and compliance costs to stay legally active
- Compare different free zones or mainland setups based on long-term expenses
- Make accurate financial projections for your business strategy
Now let us dive into the details and calculate what it really takes to maintain a Dubai company.
Main Cost Components of Maintaining a Dubai Company
The annual running costs for a Dubai company typically include the following major components:
- Trade License Renewal Fees
- Visa Renewal and Related Costs
- Office Space or Flexi-Desk Fees
- Bank Account Maintenance Charges
- Bookkeeping and Accounting Fees
- Audit (if applicable)
- Corporate Tax and VAT Compliance
- Miscellaneous Costs
We will break each one down in detail, including average costs and factors that influence pricing.
1. Trade License Renewal Fees
Every company in Dubai, whether in a free zone or on the mainland, must renew its trade license annually. The renewal cost depends on your business activity, the jurisdiction, and whether you have additional services like multiple business activities under the same license.
Free Zone License Renewal Costs
Free zone companies usually have a fixed annual renewal fee that includes the license cost and sometimes a flexi-desk package. On average:
- Small free zones (like Meydan or IFZA): AED 10,000 to AED 12,000
- Popular free zones (like DMCC, Dubai South): AED 15,000 to AED 20,000
Mainland License Renewal Costs
For mainland companies, license renewal fees vary by activity and can include extra costs like municipality fees and sponsorship charges.
- Average Mainland License Renewal: AED 8,000 to AED 15,000
- Additional costs may apply for activities that require special approvals
2. Visa Renewal and Related Costs
If you or your employees have UAE residence visas linked to the company, these need to be renewed every 2 or 3 years, depending on the visa validity. For annual budgeting, you can divide the visa cost across the years to estimate your yearly expense.
- Investor/Partner Visa Renewal: Around AED 4,000 to AED 5,500
- Employee Visa Renewal: AED 4,500 to AED 6,500
- Medical Test and Emirates ID Renewal: AED 800 to AED 1,200 per person
If your business has multiple employees, this cost can become significant.
3. Office Space or Flexi-Desk Fees
Most free zones require businesses to maintain at least a flexi-desk or office lease to stay compliant. Mainland companies also need a physical office.
- Flexi-Desk in Free Zone: AED 5,000 to AED 8,000 per year
- Small Office Lease (Mainland): AED 15,000 to AED 30,000 per year depending on location
- Premium Offices: Can range from AED 50,000 to over AED 200,000 per year
If you are on a budget, free zones offering virtual offices or shared desks are the most cost-effective option.
4. Bank Account Maintenance Charges
Opening a corporate bank account is mandatory, but maintaining it involves charges. Most UAE banks have:
- Minimum Balance Requirements: AED 25,000 to AED 50,000 (non-compliance incurs fees)
- Monthly Maintenance Charges: AED 150 to AED 300 if balance falls below minimum
- Transaction Charges: Vary based on usage
While these might seem small individually, they add up if your business has multiple accounts or frequent international transactions.
5. Bookkeeping and Accounting Fees
Even if your company is small, maintaining proper financial records is essential for compliance and business health. Many business owners outsource accounting to avoid hiring full-time staff.
- Basic Bookkeeping: AED 500 to AED 1,500 per month
- Comprehensive Accounting Services: AED 2,000 to AED 5,000 per month depending on transaction volume
With the introduction of corporate tax and mandatory financial records, this cost is no longer optional.
6. Audit (If Applicable)
Certain free zones and all large businesses must submit annual audit reports. This is mandatory for compliance in zones like DMCC and JAFZA.
- Audit Fees: AED 4,000 to AED 10,000 per year depending on complexity
If your free zone does not require an audit, you can save significantly here.
7. Corporate Tax and VAT Compliance
Starting from 2023, UAE introduced a 9% corporate tax on profits above AED 375,000. This means you may need to file corporate tax returns if you cross that threshold.
- Tax Filing and Compliance Fees: AED 3,000 to AED 6,000 annually
- VAT (if registered): Filing every quarter with costs for accounting and submission
Even if you are under the taxable threshold, filing may still be mandatory to declare compliance.
8. Miscellaneous Costs
Some additional costs you should plan for include:
- Domain and Website Hosting: AED 500 to AED 1,000 per year
- Business Insurance: AED 2,000 to AED 5,000 annually depending on coverage
- Marketing Expenses: Varies based on business size and strategy
- Miscellaneous Government Fees: Name reservation, activity changes, document attestations
Estimated Annual Running Cost for a Dubai Company
Here is a quick breakdown of approximate yearly costs for a small business in a Dubai free zone:
| Expense | Average Cost (AED) |
|---|---|
| Trade License Renewal | 10,000 – 15,000 |
| Flexi-Desk | 5,000 – 8,000 |
| Visa Renewal (1 person) | 4,500 |
| Accounting & Compliance | 6,000 – 12,000 |
| Bank Charges | 1,500 |
| Miscellaneous | 2,000 – 5,000 |
| Total | 29,000 – 45,000 |
For mainland businesses, the cost is slightly higher due to office space and additional approvals.
How to Reduce Your Running Costs in Dubai
Here are some practical ways to save money without compromising compliance:
- Choose the right free zone that offers inclusive packages for license, flexi-desk, and visa
- Outsource accounting instead of hiring full-time staff
- Maintain minimum bank balance to avoid penalties
- Plan renewals in advance to avoid late fees
- Opt for multi-year license packages for better rates
Final Thoughts
Maintaining a company in Dubai is affordable compared to many global hubs, but it is not free. On average, you should budget at least AED 30,000 to AED 50,000 annually to keep a small business operational. These costs can increase based on office requirements, employee visas, and compliance needs.
If you are planning to start or expand your business in Dubai, always look at the long-term picture. The initial setup cost is only part of the equation. Running costs determine your profitability and sustainability.
By planning ahead and working with a reliable business setup advisor, you can minimize unnecessary expenses and focus on growing your business in one of the world’s most dynamic markets.
Want to start a business in Dubai?
GenZone stands out as a trusted partner for entrepreneurs and businesses looking to establish and maintain their presence in Dubai. With a reputation for transparency, clear pricing, and expert guidance, GenZone eliminates the confusion often associated with company formation and ongoing compliance.
Their team ensures every detail is handled efficiently, from initial setup to annual renewals, so clients can focus on growing their business without worrying about hidden costs or delays. For those seeking a seamless, reliable, and cost-effective way to navigate Dubai’s business landscape, GenZone is the go-to choice.
