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The United Arab Emirates (UAE) has emerged as a top destination for entrepreneurs and investors looking to set up businesses, thanks to its strategic location, business-friendly environment, and world-class infrastructure. However, the cost of setting up a business can vary significantly. In this blog post, we’ll explore the cheapest business license options in the UAE and discuss factors to consider when choosing a budget-friendly licensing option. 

Costs Involved in Setting Up a Business in the UAE

When setting up a business in the UAE, several costs come into play, including:

  1. Business license fees 
  2. Registration fees
  3. Office space rental
  4. Visa costs for employees and investors
  5. Legal and consultancy fees 

Licensing authorities in the UAE, including free zone authorities and the Department of Economic Development (DED), have different licensing costs due to factors such as:

  1. The level of service and facilities provided
  2. The targeted industries and business sectors 
  3. The availability of incentives and discounts
  4. The location and accessibility of the licensing authority 

Further, licensing costs in the UAE can differ based on the type of business activity, type of legal entity (e.g., limited liability company, branch office) and the number of business activities included in the license. 

Will Licensing Costs Vary from Year to Year? 

Licensing costs may change yearly based on changes in government policies and updates to the licensing authorities’ fee structures. However, the yearly expenses can be comparatively lower than the first year due to the registration fees, which are charged only in the first year. At the same time, many licensing authorities offer promotional rates in the first year(s) to attract investment into the region. One must be careful about subsequent renewal costs after the promotional period while opting for promotional offers. 

Some of the Low-Cost Licensing Options in the UAE 

Some of the cheapest business license options in the UAE include: 

  1. Ajman Free Zone 
  2. Fujairah Creative City
  3. Umm Al Quwain Free Trade Zone 

These licensing authorities offer competitive fees and flexible payment plans, making them attractive options for budget-conscious entrepreneurs. 

While a low-cost licensing option may seem attractive, it’s essential to consider other factors before deciding. The prime focus should be the business itself, meaning the company will be able to serve its customers better while operating from the zone. Other factors include the reputation of the licensing authority, the availability of suitable facilities, the ease of conducting business in the chosen location, and access to resources and support services. 

Tips for new entrepreneurs 

While budget can be the prime focus of many entrepreneurs, our advice is to have a broader overview of the implications. For startups that require substantial time to develop their project, low-cost options may be handy to mobilise resources, and gradually they can consider a shift to their key market. This way, companies can spend less until they gain traction. Entrepreneurs can take many alternative approaches based on the business’s specific needs. 

Whatever be the strategy adopted, it is crucial to consider factors most often forgotten, such as  

  1. Distance from your/ your employees to the work location and the impact on transportation cost and time.  
  2. Challenges in obtaining subsequent approvals and facilities from banks. Delays in this can compensate for the savings. 
  3. Non-quantitative factors such as reputation, brand and the like


While the cheapest business license options in the UAE can be attractive for budget-conscious entrepreneurs, it’s essential to weigh the pros and cons and consider factors beyond cost. By carefully evaluating the available options and seeking professional advice, you can choose a licensing option that not only meets your budget but also supports your business’s long-term success. 

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