Costs of Running a Business in the UAE

How Much Does It Really Cost to Run a Business in the UAE?

Many of us have heard time and again that there is no tax in the UAE, or that taxes are very low in comparison with other countries. However, what is the realistic cost of moving and operating a company in the UAE? 

This article looks at compliance, banking, and other hidden costs that will affect businesses setting up in the UAE in 2025.

The United Arab Emirates has established itself as one of the most attractive business destinations in the world. The UAE is offering zero personal income tax, strategic location, modern infrastructure, and a stable, investor-friendly environment. But behind the glamour of fast incorporations and tax advantages lies a more serious reality: the cost of compliance and the regulatory expectations are higher than ever.

In recent years, the UAE has taken major steps to align itself with the best international practices. In 2024, the country was officially removed from the OECD’s grey list. More recently, on June 10, 2025, the Financial Action Task Force (FATF) confirmed that the UAE had been removed from its “grey list” of jurisdictions under increased monitoring. These changes reflect the UAE’s deep commitment to transparency, anti-money laundering (AML), and financial crime prevention and they also signal to the world that the UAE is no longer just a tax-friendly jurisdiction, but a globally respected financial centre.

Naturally, with this increased recognition comes increased responsibility for those who operate here, especially in regulated sectors such as finance, wealth management, fintech, payment services, and corporate structuring.

Understanding the Real Cost of Running a UAE Business

At a basic level, all UAE companies, whether Free Zone or Mainland, must maintain an active trade license, which must be renewed annually. The cost of renewal ranges from AED 10,000 to AED 25,000, depending on the business activity and the licensing authority. Visa-related expenses also add to the cost. UAE residence visas are valid for two years and typically cost between AED 3,500 and AED 5,000 per person, including medical testing, Emirates ID, and visa stamping.

More importantly, regulatory compliance is now an essential part of doing business. Most UAE companies are legally required to maintain proper books of accounts and submit audited financial statements annually. This is especially true for businesses in Free Zones such as DIFC, ADGM, DMCC, or DWTC, where financial transparency and audit reporting are mandatory under the licensing rules. The average cost of accounting, tax filing, and audit support ranges from USD 5,000 to 8,000 annually, depending on the scale and nature of the business.

If the company’s turnover exceeds AED 375,000 annually, VAT registration is required. VAT returns must be submitted quarterly, and non-compliance results in immediate penalties by the Federal Tax Authority. In addition, UAE companies are now subject to corporate tax at a flat rate of 9% on annual profits exceeding AED 375,000. This means that accurate financials and timely submissions are no longer optional as these are legal obligations. Ongoing tax compliance typically adds another USD 3,000 to 6,000+ per year to the operational cost, especially if international structuring or transfer pricing is involved.

Stricter Oversight for Financial, Tech, and Advisory Sectors

If your company operates in the financial services, investment advisory, fintech, digital assets, or corporate governance space, the regulatory bar is even higher. Unlike general trading or consultancy firms, businesses in regulated sectors are subject to sector-specific laws, licensing, and fit-and-proper requirements.

To be approved by regulators such as the Dubai Financial Services Authority (DFSA) in DIFC, or the Financial Services Regulatory Authority (FSRA) in ADGM, the individuals behind a business must meet strict fitness and propriety standards. This includes holding internationally recognized professional qualifications such as the CFA, CPA, ACCA, CAIA, STEP, ICA, or similar. They must also demonstrate at least 3 to 5 years of verifiable experience in the relevant industry, pass background and reference checks, and meet the regulator’s expectations for ongoing professional development and ethical conduct. At Sovereign Group we provide annual secretarial services for our individual and corporate clients to maintain company complaint with local regulations to avoid fines for late renewal or submission filling information to the authorities and regulator.

In short, the UAE is no longer a jurisdiction where anyone can open a financial company without credentials. Regulators now require real substance: qualified professionals, clear corporate governance, strong internal controls, and ongoing compliance monitoring. In addition to the business license and visa costs, regulated firms should budget for regulatory reporting software, AML officer appointments, data privacy measures, and external compliance audits , easily adding USD 20,000–50,000+ annually, depending on the license category.

Even in unregulated sectors like corporate advisory, family office structuring, and offshore services, authorities increasingly expect companies to demonstrate real expertise, substance, and ethical standards. For bank account openings, especially, most banks now require evidence that shareholders and directors are qualified to carry out the stated business activities. Companies that cannot meet these expectations often struggle to open or maintain local bank accounts, regardless of their capital.

Banking and Capital Thresholds

Banking in the UAE has become more selective and compliance driven. Many local banks now require a minimum average balance of AED 500,000 or more, especially for companies involved in cross-border transactions, financial structuring, or advisory services. Enhanced due diligence (EDD), regular source of funds checks, and real-time transaction monitoring are part of everyday business banking now. Companies without a clear, audited financial trail often find their accounts closed or their applications rejected altogether.

A High-Standard Market for Serious Businesses

The UAE remains one of the most sophisticated jurisdictions for international business, but it is not a low-effort, low-commitment market. It now rewards transparency, substance, and professional integrity. For companies that want to build long-term operations here, the expectations are clear: work with certified professionals, stay fully compliant, and build a real business with real value.

This environment offers incredible opportunities, especially for financial institutions, tech startups, and family offices looking for global access and tax efficiency within a respected legal framework, but succeeding here requires commitment to governance, ethics, and regulation which would require engaging a professional CSP.

If you're launching or restructuring a business in the UAE and want expert support to navigate licenses, compliance, tax, and banking, we’re here to help. Our team of experienced professionals can guide you from setup to scale with precision and clarity to avoid future unexpected expenses or fines.

I am happy to arrange a free consultation to discuss. Let’s make sure your business is fully compliant, strategically structured, and ready to grow in one of the world’s top-tier jurisdictions. Contact me below.