Topic Summary
A Dubai company formation quote often lists only the license fee, leaving founders surprised by visa, tax registration, and compliance costs later.
In 2026, the UAE hosts over 595,000 active commercial entities (Ministry of Economy, 2024), yet a significant share of first-time founders receive a company formation quote in Dubai that lists only the license fee and nothing else. The renewal invoice twelve months later tells a very different story. At Dubai South Business Hub Free Zone (DSBH), a base license starts from AED 12,500, but a sole founder's true first-year cost runs from AED 18,350 once a visa package is added. Corporate tax late registration carries a one-time AED 10,000 penalty (Federal Tax Authority, 2023). VAT late registration adds another AED 10,000. And regulated activities require two separate approvals, not one.
This checklist walks you through every line item a credible company formation quote in Dubai must include, from the license fee and visa costs through to tax registration, bank account setup, and ongoing compliance, so you can compare proposals accurately and avoid invoice shock.
What a Company Formation Quote in Dubai Should Actually Cover
A company formation quote in Dubai should cover the trade license fee, visa package costs, government registration fees, corporate tax registration, VAT registration if applicable, bank account facilitation, and any activity-specific regulatory approvals. A quote listing only the license fee is incomplete and will understate your true first-year cost.
Why Most Quotes Only Show the License Fee
Providers often lead with the lowest visible number to win the inquiry. Ancillary government fees appear later, sometimes only after you've signed. It's a common pattern, and it's worth knowing before you start comparing proposals.
At DSBH, the license fee starts from AED 12,500 for standard activities and from AED 11,375 for B2C-facing activities. But that's one component of a multi-line first-year cost. A sole founder with one visa pays from AED 18,350 all-in for year one, and that figure still doesn't include corporate tax registration or bank account fees. No paid-up share capital is required, which keeps the barrier low, but the total cost picture is wider than a single number suggests.
Here's a practical illustration: a founder setting up a consultancy receives two quotes. One shows AED 12,500. The other shows AED 18,350. The second is more complete because it includes the visa package. Neither yet includes corporate tax registration or bank account facilitation. Always ask the provider to itemise every government fee separately from their service charge.
The Difference Between a Free Zone Quote and a Mainland Quote
Free zone licenses are issued by the free zone authority. Mainland licenses are issued by DET (Dubai Department of Economy and Tourism) and may involve additional approvals depending on the activity. A credible company formation quote in Dubai will specify the jurisdiction clearly and name the issuing authority.
One distinction that matters for trading companies: free zone goods entering the UAE mainland are duty-suspended, not duty-exempt. That's a cost that belongs in the business plan, not discovered after incorporation. Worth flagging too: 100% foreign ownership is available on both the mainland and in free zones. It's not a free-zone-exclusive benefit, so don't let a provider use it as a differentiator without context.
License Fee Line Items Every Company Formation Quote in Dubai Must Include
Every company formation quote in Dubai must itemise the base license fee, the cost per business activity beyond the first five, the free zone registration or establishment card fee, and any name reservation charge. At Dubai South Business Hub Free Zone, each activity beyond the first five costs AED 2,000.
Company Formation Quote in Dubai: Setup Costs vs. Ongoing Annual Costs
Fee Item | Year-One Setup Costs | Ongoing Annual Costs |
|---|---|---|
Base trade license fee | From AED 12,500 at DSBH (B2C from AED 11,375); paid at incorporation | Annual renewal mirrors year-one cost; confirm the renewal figure in writing |
Visa package per person (entry permit, Emirates ID, medical, stamping) | Included in the AED 18,350 first-year all-in figure for one visa at DSBH; always an additional cost, never bundled into the license | Visa renewal every two or three years; each renewal requires medical fitness, Emirates ID renewal, and stamping fees |
Corporate tax registration (FTA) | One-time registration on the FTA portal; mandatory for every UAE entity regardless of profit level; late registration penalty AED 10,000 | Annual corporate tax return filing; accounting records mandatory under UAE corporate tax law |
VAT registration if applicable (FTA) | Mandatory once taxable supplies reach the threshold; voluntary registration available below it; late registration penalty AED 10,000 | Quarterly or monthly VAT return filing; provider may charge per return or include in a retainer |
Regulated activity approval (sector regulator) | Separate fee from the free zone license; regulator name (DHA, KHDA, Central Bank, RERA) must be stated explicitly in the quote | Annual regulatory renewal with the named sector regulator; timelines and fees vary by regulator |
Base License Fee and Activity Inclusions
The DSBH license starts from AED 12,500, with up to five business activities in Dubai included in the base fee. Each activity beyond the first five costs AED 2,000. A founder adding eight activities pays for three extras on top of the base. B2C-facing activities are priced from AED 11,375.
One practical example: a digital marketing agency listing social media management, content production, SEO consulting, paid media buying, and event promotion covers all five within the base DSBH license fee. Adding a sixth activity such as photography services costs an additional AED 2,000. Also confirm whether the quoted figure covers the license year from the date of issuance or aligns with a fixed calendar renewal date. That distinction affects your renewal invoice timing.
Name Reservation and Establishment Card Fees
Trade name reservation is a separate government fee. Confirm whether it's included in the quoted total or listed separately. The establishment card (also called the company card) is the document used to sponsor visas, and its cost must appear in the quote.
DSBH issues licenses within one business day, but name reservation and document submission timelines should still be stated in the proposal. Use the company name availability check tool before submitting your application to reduce the risk of rejection fees. Ask whether the quote covers one round of name rejection and resubmission or charges extra for it.
Nine Line Items to Check in Any Company Formation Quote in Dubai
A complete company formation quote in Dubai should include nine core line items: license fee, activity fees, name reservation, establishment card, visa package per person, Emirates ID, medical fitness test, corporate tax registration, and VAT registration if applicable. Missing any one of these understates your actual setup cost.
The Nine-Item Checklist
Base trade license fee, confirm the number of activities included
Additional activity fees, AED 2,000 each beyond five at DSBH
Trade name reservation fee, a separate government charge
Establishment card or company card fee, required for visa sponsorship
Visa package per investor or employee, always an additional cost, never bundled into the license fee
Emirates ID application fee, required for each visa holder
Medical fitness test fee, varies by emirate
Corporate tax registration (FTA), mandatory for every UAE entity; AED 10,000 one-time late registration penalty
VAT registration if applicable (FTA), AED 10,000 one-time late registration penalty
A sole founder at DSBH paying from AED 18,350 in year one has items 1, 5, 6, and 7 covered in that figure. Items 3, 4, 8, and 9 are separate and must appear in the full quote. Use the Dubai free zone company setup cost calculator to build your personalised estimate before accepting any proposal.
Which Items Are Government Fees vs. Provider Service Charges
Government fees are fixed and non-negotiable. A provider cannot discount them; they can only pass them through to you. Provider service charges, by contrast, cover processing, document handling, and account management. These are negotiable.
A transparent company formation quote in Dubai separates these two columns clearly. A combined lump sum hides the markup. Ask for a government-fee receipt or reference number for each disbursement. And ask the provider to send you the FTA corporate tax registration confirmation email directly, not just a screenshot, so you hold the reference number yourself.
Visa and Labour Costs That Belong in Every Package
Visa costs in a Dubai company formation quote must include the entry permit, status adjustment or change of status fee, Emirates ID, medical fitness test, and visa stamping. These are always separate from the license fee. Labour card and work permit fees from MOHRE (Ministry of Human Resources and Emiratisation) apply for each employee sponsored under the company.
What the Visa Package Must Itemise
Each visa in a UAE residency visa package should be broken into these sub-items:
Entry permit fee, issued by ICP (Immigration, Citizenship, Customs and Port Security)
Change of status fee, applies if the applicant is already in the UAE on any visa type
Medical fitness test fee, varies by emirate; confirm with the provider
Emirates ID application fee, required for every visa holder
Visa stamping or residence visa issuance fee
Here's a scenario that catches founders off guard: a founder already in the UAE on a tourist visa pays a change-of-status fee on top of the standard entry permit fee. A founder applying from overseas does not. Both scenarios should appear as separate line items in the company formation quote in Dubai, not buried in a combined total.
MOHRE Work Permit and Labour Card Fees for Employees
Each employee sponsored under the company requires a MOHRE work permit and a labour card. These fees are separate from the residence visa costs and vary by the employee's skill classification. Confirm the classification before accepting the quote, because the fee structure differs across skill levels.
The establishment must also be registered with MOHRE before it can sponsor any employees. That registration fee should appear in the quote. A startup hiring its first two staff members needs MOHRE work permits and labour cards for each. A quote that shows only visa fees and omits MOHRE fees will understate the hiring cost by a meaningful margin. You can check the status of a work permit application using the reference number on the MOHRE portal.
Tax Registration Costs Every Company Formation Quote in Dubai Must Disclose
Every UAE company must register for corporate tax with the Federal Tax Authority regardless of profit level. Late registration carries a one-time AED 10,000 penalty. VAT registration is mandatory once taxable supplies reach the threshold, with the same AED 10,000 penalty for late registration. Both must appear in a complete formation quote.
Corporate Tax Registration: What the Quote Must State
Corporate tax registration with the FTA is mandatory for every UAE entity, including free zone companies, regardless of whether the entity is profitable. The late registration penalty is AED 10,000 as a one-time flat charge, not a monthly accrual. That distinction matters: some founders assume it compounds, but it doesn't. One penalty, one time.
Qualifying Free Zone Persons (QFZPs) may access a 0% corporate tax rate, but only when four specific conditions are all met: adequate economic substance in the UAE, qualifying income as defined under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022), no election to be taxed as a mainland branch, and compliance with transfer pricing rules. A quote that promises "0% corporate tax" without attaching all four conditions is misleading. A DSBH free zone company earning income from mainland UAE clients, for example, may not qualify as a QFZP on that income stream. Ask whether the provider's fee covers FTA portal registration or only advisory work; some charge separately for portal submission.
VAT Registration and Ongoing Filing Costs
VAT registration becomes mandatory once taxable supplies reach the mandatory registration threshold. Voluntary registration is available below that threshold and can be worth considering if you're working with VAT-registered clients. Late VAT registration carries the same one-time AED 10,000 penalty as corporate tax.
A services company expecting to bill AED 400,000 in year one should have VAT registration in its plan from day one. Quarterly or monthly VAT return filing is an ongoing cost that belongs in the annual running cost section of any quote, not just the setup section. Ask whether the provider offers VAT return filing as part of a retainer or charges per return (Federal Tax Authority, 2023).
Is corporate tax registration the same as VAT registration?
No. Corporate tax registration and VAT registration are two separate processes on the FTA portal, each with its own registration number and filing obligations. A company can be registered for corporate tax but not VAT if it hasn't reached the VAT threshold. Both registrations are mandatory when their respective triggers apply, and each carries its own AED 10,000 late registration penalty.
Bank Account and Ongoing Compliance Costs to Request Upfront
A complete Dubai company formation quote should disclose corporate bank account facilitation fees, annual license renewal costs, registered agent or PRO retainer fees, and accounting or bookkeeping charges. These ongoing costs often exceed the year-one setup fee over a three-year period and are frequently omitted from initial proposals.
Corporate Bank Account Facilitation Fees
Opening a corporate bank account in the UAE requires KYC documentation, a company profile, and often a minimum deposit. The facilitation fee charged by a formation provider is separate from the bank's own minimum balance requirement. Some providers include bank account introduction as part of their package; others charge separately. Confirm which applies before you sign.
The bank's minimum monthly balance requirement is an ongoing cost, not a one-time fee. It belongs in the running cost column of the quote, not the setup column. Ask whether the provider has relationships with multiple banks or only one, because approval rates vary significantly by business activity. A technology startup may find approval faster with a digital-first bank than a traditional branch. Explore banking and taxation services options before committing to a single provider.
Annual Renewal, PRO Services, and Accounting Retainers
The annual license renewal fee mirrors the first-year license cost in most cases. Get that renewal figure in writing, not verbally. PRO (Public Relations Officer) or government liaison services cover visa renewals, labour card renewals, and other government transactions; these are typically charged as an annual retainer. PRO services in Dubai can save significant time when managing multiple government touchpoints.
Bookkeeping and accounting are mandatory under UAE corporate tax law. The cost of a compliant accounting function should appear in the quote's running cost section. Ask for a three-year total cost projection, not just a year-one figure, to compare providers accurately. A founder who receives only the year-one figure and discovers the PRO retainer, accounting fee, and visa renewal costs in year two is effectively comparing an incomplete quote to a complete one.
Regulated Activity Approvals That Must Appear in the Quote
For any regulated business activity in Dubai, the company formation quote must show two separate costs: the free zone authority licensing the activity, and the named sector regulator approving it independently. Examples include DHA approval for healthcare, KHDA approval for education, and Central Bank approval for financial services. Neither replaces the other.
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Frequently Asked Questions
