Cost of Running a Business in the UAE: 2025 Guide for Entrepreneurs and Startups

The United Arab Emirates remains one of the most attractive destinations in the Middle East for business setup and expansion. With investor-friendly policies, strategic global connectivity, and modern infrastructure, it continues to draw entrepreneurs from across the globe. But while setting up a company has become easier, understanding the real cost of running a business in the UAE is essential for long-term success.

In this article, we break down the operational costs entrepreneurs and small businesses should budget for in 2025, whether you’re starting a freelance consultancy, a tech firm, or a trading company—on the mainland or in a free zone.

Key Factors That Influence Business Costs in the UAE

Several variables will affect your ongoing business expenses:

• Location: Dubai and Abu Dhabi tend to have higher costs; Sharjah, Ras Al Khaimah, and Ajman are more affordable

• Business activity: Licensing fees vary based on sector (e.g., trading, consulting, industrial)

• Legal structure: Free zone vs. mainland, single owner vs. multi-shareholder

• Office requirements: Physical office vs. flexi-desk or virtual setup

• Visa needs: Number of employees and family dependents to be sponsored

• Tax and compliance: Corporate tax registration and filings (as of 2023)

Estimated Monthly and Annual Business Running Costs (2025)

Category	Estimated Cost (AED)
Trade license renewal	6,000 – 15,000 annually
Office rent (flexi-desk)	5,000 – 12,000 annually
Office rent (private space)	25,000 – 75,000 annually (location-dependent)
Employee visa (per employee)	3,000 – 6,000 annually
Health insurance (mandatory)	1,200 – 3,000 per person annually
Utilities and internet	500 – 1,500 monthly
Accounting and auditing services	5,000 – 15,000 annually (required for some zones/entities)
Corporate tax filing	2,000 – 5,000 annually (based on advisor)
Bank maintenance fees	100 – 300 monthly
Marketing & digital tools	1,000 – 3,000 monthly (website, ads, CRM)

Free Zone vs. Mainland: Ongoing Cost Differences

Free Zones

• Generally offer bundled renewal packages that include licensing, flexi-desk, and visa quotas

• Lower operational burden with simplified processes

• Limited access to UAE mainland market unless additional approvals are secured

Mainland

• Offers greater trading flexibility and full UAE market access

• Requires separate lease agreements, often at higher cost

• Typically involves more complex compliance (municipal approvals, tax filings)

If your primary clients are within the UAE, especially government or B2C sectors, mainland setup may justify higher costs.

Payroll and Staffing Costs

While UAE law sets no official minimum wage, employers must meet Wages Protection System (WPS) standards and provide:

• Monthly salary (market range: AED 5,000–30,000 depending on role)

• Visa sponsorship and health insurance

• End-of-service gratuity (calculated as part of labour law obligations)

• Optional: Housing or travel allowances

Hiring costs also include labour card fees, Emirates ID, and insurance, which can range from AED 4,000–7,000 per hire.

Tax and Compliance Costs

As of 2025, businesses earning over AED 375,000 in annual profit are subject to 9% corporate tax. Even if below this threshold, companies must:

• Register with the Federal Tax Authority (FTA)

• File annual corporate tax returns

• Maintain audited financials if required by the licensing authority

Failure to comply may result in fines or license suspensions, adding further hidden costs.

Cost-Saving Tips for Small Businesses and Startups

• Use flexi-desk or shared office spaces in the early stages

• Choose emirates like Sharjah or RAK for lower lease and license costs

• Opt for freelance or solo establishment licenses if legally eligible

• Outsource accounting and admin to avoid full-time overhead

• Use digital banking solutions to reduce transaction and maintenance fees

• Review licensing requirements annually—some activities may be consolidated under lower-cost licenses

Final Thoughts

Running a business in the UAE in 2025 offers vast opportunities, but a sustainable operation requires strategic budgeting and cost awareness. From licensing and compliance to real estate and staffing, understanding your total cost of ownership ensures you can grow without surprises.

With a clear financial plan, businesses of all sizes can benefit from the UAE’s pro-business environment, global connectivity, and competitive tax structure.