Everyone who lands in Dubai hears the same pitch: "Set up a freezone company — it's only AED 5,500." That's not a lie. It's the entry ticket for the cheapest activity on the cheapest freezone — with zero visas, no real office, and a license that may not cover what you actually do. This guide shows you the real numbers, verified against 2026 government fee schedules and live consultant quotes. We cover what you pay to exist legally, what you pay to operate practically, and which jurisdiction actually fits your business model.
The Price Myth That Catches Every New Investor
UAE business setup costs fall into two buckets: what you pay to exist legally andwhat you pay to operate practically. Every quote you see advertised covers only the first bucket. The "exist legally" costs are the license fee, registration, and sometimes a nominal visa — the AED 4,888–15,000 range you see online. The "operate practically" costs — visa medical, Emirates ID, bank account, flexi-desk, approvals, and annual renewal — often equal the setup fee within 18 months.
AED — Cheapest freezone
license (zero-visa, Ajman 2026)
AED — Realistic all-in cost, Year
1 (Dubai freezone, 1 visa)
AED — Mainland LLC typical
first-year total (Dubai, 2 visas)
3 Jurisdictions. 3 Completely Different Businesses.
UAE has three distinct legal zones. Choosing the wrong one isn't just a cost mistake — it's an operational one. A freezone company legally cannot sell directly to UAE mainland clients. An offshore entity cannot sponsor visas. These are hard rules, not workarounds.
| Feature | Mainland LLC | Freezone | Offshore |
|---|---|---|---|
| Sell directly to UAE clients | ✓ Unrestricted | Via local agent | ✗ Not permitted |
| Foreign ownership | 100% (since 2021) | 100% always | 100% always |
| UAE residence visa | ✓ Yes | ✓ Yes | ✗ Not eligible |
| Physical office required | Yes (Ejari) | Flexi-desk OK | None needed |
| Setup cost range (2026) | AED 15,000–60,000+ | AED 4,888–30,000 | AED 8,000–15,000 |
| UAE bank account | Easier to open | Moderate difficulty | Very difficult |
| Best for | Local market, retail, clinics | Export, digital, consulting | Holding, asset protection |
What It Actually Costs in 2026
By The Numbers
Verified from live fee schedules — April 2026
40+
FREE ZONES IN UAE
AED 4,888
CHEAPEST LICENSE
30d
TYPICAL FORMATION
3M
AED REVENUE FOR 0% TAX
Freezone — 1 visa, flexi-desk, single activity (Dubai)
License fee: AED 12,500–18,000 | Establishment card: AED 1,500–2,000 | Visa + medical + Emirates ID:
AED 3,800–6,500 | Flexi-desk (annual): AED 5,000–15,000.
Total Year 1: AED 22,800–41,500. Outside Dubai (Ajman, Sharjah)
costs start lower — but confirm your target bank accepts that freezone first.
Mainland LLC — DED, 2 visas, serviced office (Dubai)
DED license: AED 12,000–20,000 | MOA notarisation: AED 2,500 | Tasheel + service fees: AED 1,500 |
Ejari office: AED 18,000–40,000 | 2× visa packages: AED 7,600–13,000.
Total Year 1: AED 41,600–76,500. Abu Dhabi mainland has cut
fees
to AED 1,000 for a 2-year license — ask us if budget is a priority.
The Real Formation Timeline
Most consultants say "7-10 days." That's the license only. The full journey — license to bank account open — takes 3-8 weeks. Here's the honest breakdown:
Name Reservation & Initial Approval
Submit 3 name options, receive initial approval, confirm activity codes. Delays happen if names clash with existing registrations.
Documents & Attestation
Passport copies, NOC from current sponsor, education certificates, business plan for regulated activities. Indian nationals: attestation adds 3–5 days if done locally.
License Issued & Establishment Card
Pay fees, receive trade license. Apply for establishment card simultaneously — this unlocks visa applications.
Visa Entry Permit, Medical & Emirates ID
Entry permit issued, medical fitness test, Emirates ID biometrics. Government queues apply — cannot be rushed.
Corporate Bank Account
The real bottleneck. Banks require trading history, client proof, or introductions. Budget 3–8 weeks. Have a backup plan ready.
UAE Company Formation
Step-by-Step Timeline & Costs 2026 • Source: MakeMyBusiness FZ-LLC
Trade Name Reservation
Day 1–2 AED 620Initial Approval
Day 3–5 AED 300MOA Drafting
Day 5–8 AED 1,500Trade Licence Issuance
Day 8–12 AED 9,950+Visa Processing
Day 12–20 AED 4,500Bank Account Opening
Day 20–35 FreeYour 30–45 day journey from application to bank-ready — timelines vary by jurisdiction and document readiness
6 Expensive Mistakes to Avoid
Choosing Zone by Price, Not Activity
Some freezones only allow specific activities. Pick the cheapest license and discover it doesn't cover your service — you’re looking at a full restructure.
Freezone + Local Market Ambitions
Freezone companies legally cannot invoice UAE mainland clients directly without a local distributor or mainland branch. This surprises dozens of founders every month.
Underestimating Bank Account Time
Applications without trading proof, client contracts, or a local introduction can take 6–12 weeks — or get rejected entirely.
Forgetting Year 2 Costs
License renewal + visa renewal + office renewal in Year 2 often costs 70–80% of Year 1. Budget for it before you’re surprised.
Corporate Tax Blindspot
9% corporate tax applies on net profit above AED 375,000. Small Business Relief (0% effective rate) applies only if total annual revenue stays under AED 3 million.
No Exit Strategy
Closing a UAE company requires deregistering licenses, cancelling visas, clearing bank accounts, and settling liabilities — in the right order.
⚡ What Nobody Tells You Before You Sign
Your bank account is harder to open than your license
Getting the license takes 2 weeks. Getting a UAE corporate bank account takes 3–8 weeks — and banks regularly reject applications from new freezones they're unfamiliar with. Ask which banks actively work with your chosen freezone.
Visa quota is tied to your office footprint
A standard flexi-desk allows 1–3 investor visas. To sponsor employee visas you need a physical office with an Ejari contract — minimum AED 18,000–40,000 annual lease on top of your license.
Activity codes are not flexible
UAE trade licenses are activity-specific. Work outside your licensed activities and you're operating without a license for that scope. Adding activities costs AED 500–2,000 each.
You're committing to at least 2 years
Visa validity, lease terms, and renewal cycles lock you in. If your model changes significantly in Year 1, restructuring costs real money. Start with the right structure, not the cheapest.
Which Jurisdiction Is Right for You?
The question isn't "which is cheapest?" — it's "which one matches how your business actually makes money?" Here's the framework:
Your clients are in UAE
→ MAINLAND LLCRetail, restaurants, clinics, agencies — any B2B where the buyer is a UAE-registered entity.
Your clients are international
→ FREEZONEDigital agencies, tech, consulting, e-commerce — most revenue flows from outside UAE.
You need holding / asset protection
→ OFF SHOREHolding shares in other companies, international trading structures, no UAE residency needed.
Ready to Get Started?
Book a free 30-minute consultation with our UAE business setup experts.