Dubai offers several options for low-cost business licenses based on the type of activity. This article provides an overview of the most affordable licenses available to entrepreneurs and small business owners in Dubai.
Getting a license in Dubai
Obtaining a business license in Dubai is mandatory for any commercial activity. The Department of Economic Development (DED) oversees the licensing process which involves choosing a business activity, location, legal form, trade name and applying for relevant approvals.
The cost of a license varies significantly depending on these factors. However, Dubai offers some of the most affordable licenses in the UAE to spur entrepreneurship and innovation.
Cheapest license options
The most affordable licenses in Dubai belong to the following categories:
Freelance permit
A freelance permit allows skilled professionals to offer services as an independent consultant or freelancer without needing an office or company sponsorship. Some key features include:
- Costs only $272 (AED 1,000) per year
- Renewable annually for up to 3 years
- Available to UAE residents and expatriate residents
- Covers services like marketing, tech, design, training etc.
Key benefits: Extremely low cost, flexibility, minimal documents
Limitations: Can only serve private clients, capped earnings of $8,100 (AED 30,000) per year
Business activities license
The Department of Economic Development (DED) offers over 2,000 commercial licenses across diverse industries and sectors. Some of the cheapest business activities include:
- Mobile food carts ($136-$545 license cost)
- Home-based tailoring and embroidery ($272-$545 license cost)
- Event organizing ($272 license cost)
- Digital marketing ($136-$272 license cost)
- Travel agency ($136-$272 license cost)
Key benefits: Low startup costs, minimal barriers to entry, low rent or tax.
Limitations: Limited scope, strict regulations, sales restrictions.
Instant licenses
DED provides “instant licenses” for certain professional activities which can be obtained over the counter instantly with minimal paperwork.
Some instant license costs:
- $68 (AED 250) for liquidators/administrators
- $68 (AED 250) for account auditing
- $68 (AED 250) for art works
Key benefits: Extremely fast setup, ultra-low license costs
Limitations: Restricted activities, operational limitations, stringent audits
Offshore company
Offshore companies in Dubai International Financial Centre (DIFC) can facilitate global trade and investment with 100% business ownership and low cost:
- License cost from $545 (AED 2,000)
- 100% foreign ownership allowed
- Tax exemptions offered
- Confidentiality provisions
Key benefits: Global outlook, full ownership, low tax, financial privacy
Limitations: Must be confined to DIFC jurisdiction and regulations
Free Zones
Dubai free zones like DMCC, Dubai South, DHCC etc. enable investors to launch and operate business cost-effectively:
- 100% foreign ownership
- Corporate tax exemptions
- Relaxed importing rules
- Competitive license costs ($272 onwards)
Key benefits: Custom regulations, tax incentives, full business ownership
Limitations: Activities restricted to free zones, document-heavy
Which is the best option?
There is no one “best” or “cheapest” license for all business needs. Some key considerations for choosing the optimal license include:
✔️ Type of business activity
✔️ Target customers (local, foreign, or global) ✔️ Business size and expansion plans
✔️ Expected profit margins
✔️ Regulatory compliance needs
Analyzing these factors can help new businesses determine the most affordable license aligned with their operational needs and strategic growth roadmap.
Key takeaways
- Freelance permits offer the lowest license costs starting from $272 per year
- Business activity licenses provide affordable options for startups in retail, tech and professional services
- Instant licenses overly quick, ultra-low cost business setup with basic compliance
- DIFC offshore licenses facilitate global business with ownership, tax and privacy benefits
- Dubai free zones enable foreign investors to launch operations cost-effectively
Comprehensively assessing individual business needs is vital to determine the ideal, lowest cost license category in Dubai.
Conclusion
Dubai offers extremely business-friendly licensing solutions tailored for business needs and budgets. By understanding the affordability, ownership rules, scope of activities and compliance demands for each license category, startups can choose the optimal, lowest-cost business license to launch and grow operations in Dubai efficiently.
Frequently Asked Questions
Q: What is the validity period of freelance permits in Dubai?
A: Freelance permits in Dubai are issued for one year initially and can be renewed annually for up to 3 years in total.
Q: How much tax do offshore companies in DIFC need to pay?
A: Offshore companies set up in DIFC enjoy tax-free operations as well exclusions from import duties across Dubai.
Q: Can I get a freelance permit for computer programming activities?
A: Yes, freelance permits broadly cover IT and technical services including computer programming, coding and consulting services.
Q: What are the trade name approval fees for DED business licenses?
A: Trade name registration and approval fees are typically around $27 (AED 100) when obtaining a new DED business license.
Q: Do home-based tailoring businesses need a DED license?
A: Yes, commercial tailoring activities from home require a DED business license even if owners do not have a commercial premises.
Q: Can tourists visiting Dubai obtain freelance permits?
A: No, freelance permits require proof of UAE residency so temporary visitors or tourists cannot apply for them in Dubai.
Q: What are the criteria to renew freelance permits annually?
A: There are no specific renewal conditions for freelance permits beyond submitting the application, fees and supporting documents to DED.
Q: Can university students also obtain freelance permits?
A: Yes, both Emirati and expatriate students studying in the UAE can obtain freelance permits for approved activities.
Q: Is financial auditing an approved activity for instant licenses?
A: Yes, financial auditors providing services to private companies can obtain an instant license from DED.
Q: How long does it take to get an offshore company license in DIFC?
A: Opening offshore firms in DIFC typically takes 2-4 weeks including submission of paperwork and approval procedures.
Q: Can a freelance social media manager obtain a permit from DED?
A: Yes, professional social media managers can obtain freelance permits as this falls under approved digital marketing activities.
Q: What trade license type do food trucks require?
A: Mobile food trucks need to obtain commercial licenses from DED explicitly allowing preparing and selling food from vehicles.
Q: Can freelance trainers conduct workshops under DED permits?
A: No, only private one-on-one training is approved under freelance permits - not commercial workshops or teaching.
Q: Are chartered accountants eligible for instant licenses?
A: No, auditors need specialized DED licenses - instant licenses are applicable to account auditing activities only.
Q: Can businesses resell their DED licenses to new owners?
A: No, DED business licenses are non-transferrable and new owners must apply afresh for operating commercial entities.
Q: Which free zone is most affordable for technology startups?
A: Dubai Silicon Oasis offers extremely competitive licensing solutions for technology startups starting from $680.
Q: Can tailors obtain DED home business licenses for garment alterations?
A: Yes, home-based licenses cover all commercial tailoring services including dress alterations as approved activities.
Q: What are the criteria for renewing offshore company licenses annually?
A: Offshore licenses are renewed by submitting renewal documentation, fees, proofs of legitimate overseas business activities to DIFC.