What is the Cost of Setting Up a Business in Dubai Airport Free Zone (DAFZA)?

Let’s talk about the real costs of setting up a business in DAFZA (Dubai Airport Free Zone Authority). Having guided numerous entrepreneurs through this process and DAFZA business setup cost, we’ve seen firsthand what expenses you’ll encounter – from the obvious ones to those hidden fees that catch many by surprise.

Initial DAFZA Business Setup Costs: The Basics

When considering a DAFZA company setup cost, there are several mandatory expenses you need to budget for. Unlike some free zones that advertise suspiciously low rates only to hit you with extras later, we’ll give you the complete picture.

The basic setup costs include:

• Registration fee: AED 7,000 – 15,000
• License fee: AED 15,000 – 25,000 (varies by activity plus the renewal cost per year)
• Establishment card: AED 2,000+
• UAE Residency visa: AED 4,300+
• Name reservation: AED 700 to AED 3,000
• Initial approval: Varies

What many don’t realize is that these figures can vary based on your business activity. Trading companies typically pay more than service providers, and manufacturing setups incur the highest fees.

DAFZA Company Setup Cost: Office Space Requirements

Office space is where your DAFZA company setup cost can really start to climb. Unlike some other free zones, DAFZA requires all companies to maintain a physical office space – there’s no “flexi-desk” option here.

Your options include:

• Executive offices: Starting from AED 85,000 per year (smaller units around 25-35 sqm)
• Standard offices: Starting from AED 140,000 per year (larger units 50+ sqm)
• Warehouse facilities: Starting from AED 400 per sqm per year
• Land for custom development: Starting from AED 200 per sqm per year

Remember that these are just starting prices. Prime locations within DAFZA with better views or access can cost significantly more. Most leases require payment in 1-4 cheques annually, and you’ll need to factor in a security deposit (typically 5-10% of the annual rent).

We always advise clients to physically visit multiple office options before making a decision. The official photos can sometimes be misleading!

DAFZA Business License Cost: Types and Differences

Your DAFZA business license cost will vary depending on the type of license you require. The three main categories are:

Trading License

• Base fee: AED 20,000 – 25,000
• Allows import, export, and distribution activities
• Can store goods in DAFZA warehouses
• Cannot manufacture products

Service License

• Base fee: AED 15,000 – 20,000
• Covers consultancy, management services, etc.
• Cannot trade physical goods
• Good option for professional service providers

Industrial License

• Base fee: AED 23,000 – 30,000
• Permits manufacturing activities
• Requires additional approvals
• Higher setup costs due to facility requirements

What’s interesting is that companies often need multiple license types. For example, if you manufacture products (industrial license) but also want to provide consulting (service license), you may need both.

Dubai Airport Free Zone Fees: Visa Allocations and Costs

A significant portion of your Dubai Airport Free Zone fees will go toward visa processing. DAFZA ties your visa allocation to your office space size, which is another reason to carefully consider your real estate requirements.

As a rough guideline:

• 25 sqm office = 2-3 visas
• 50 sqm office = 4-6 visas
• 100 sqm office = 8-12 visas
• Warehouses = 1 visa per 200 sqm

Each visa involves several fees:

• Application and processing: AED 3,000 – 4,000
• Medical testing: AED 1,500+ (depending on urgency)
• Emirates ID: AED 370 (1-year)
• Visa stamping: AED 500 – 1,500
• Health insurance: AED 616 – 5,000 (incurs per year and varies widely by coverage)

Many entrepreneurs don’t realize they need to budget around AED 8,000 – 15,000 per employee just for visa costs. This doesn’t include salaries or benefits.

Hidden DAFZA Business Setup Costs You Should Know About

Beyond the official DAFZA business setup cost figures, there are several less obvious expenses that can catch unprepared entrepreneurs off guard:

Bank Account Setup

Opening a corporate bank account in the UAE isn’t as straightforward as in many other countries. Expect:

• Minimum balance requirements: AED 25,000 – 50,000
• Monthly maintenance fees: AED 100 – 300
• Initial deposit requirements: Often AED 10,000 – 25,000
• Documentary requirements: Extensive and may need attestation

Approvals and NOCs

Depending on your business activity, you might need:

• Activity-specific approvals: AED 2,000 – 10,000
• No Objection Certificates: AED 100 – 1,000
• Product registration fees: Variable

Attestation Fees

Documents from your home country typically need:

• Embassy attestation: AED 100 – 500 per document
• UAE Foreign Affairs attestation: AED 150 per document
• Translation costs: AED 50 – 500 per page

Annual Audit Requirements

DAFZA companies must submit audited financial statements:

• Audit fees: AED 5,000 – 15,000 annually
• Accounting software: AED 1,500 – 5,000 annually
• Potential fines for late submission: Up to AED 15,000

DAFZA Company Setup Cost: Renewal and Ongoing Expenses

The DAFZA company setup cost is just the beginning. Annual renewals are where many businesses feel the pinch:

• License renewal: 90-100% of initial license fee
• Establishment card renewal: AED 1,870
• Office lease renewal: Often with 5-10% increase
• Visa renewals: Similar to initial visa costs
• Facility management charges: 10-15% of lease value

These renewals typically come due at the same time, creating a significant annual cash flow requirement. We always advise clients to set aside funds throughout the year rather than scrambling when renewal notices arrive.

Dubai Airport Free Zone Fees: Payment Terms and Methods

When budgeting for Dubai Airport Free Zone fees, consider these payment aspects:

• Most fees require upfront payment
• Limited installment options (mainly for larger office leases)
• Payment methods include:
  • Bank transfers
  • Manager’s cheques
  • Credit cards (for some smaller fees, with 2-3% surcharge)
  • Cash (for minor amounts only)

DAFZA is fairly strict about payment deadlines, with late payments incurring:

• Daily penalties (often 0.1% of the outstanding amount)
• Potential service freezes after 30 days
• Risk of license cancellation after 90 days

DAFZA Business License Cost: Comparing with Other Free Zones

To put the DAFZA business license cost in perspective, here’s how it compares to other popular free zones:

DAFZA vs. JAFZA (Jebel Ali Free Zone)

• DAFZA license: AED 15,000 (Starting price)
• JAFZA license: AED 5,000 (Starting price)
• DAFZA office space: Higher by 20-30%
• Both require physical offices

DAFZA vs. DMCC (Dubai Multi Commodities Centre)

• DAFZA license: AED 15,000+
• DMCC license: AED 10,000 – 50,000
• DMCC offers flexi-desk options (DAFZA doesn’t)
• DAFZA has better proximity to the airport

DAFZA vs. DWC (Dubai World Central)

• DAFZA license: AED 15,000 – 25,000
• DWC license: AED 10,000
• DWC offers lower office rental rates
• DAFZA has more established infrastructure

The premium on DAFZA business setup cost is largely due to its strategic location, prestige, and excellent connectivity. For logistics-focused businesses, the proximity to the airport often justifies the higher expense.

Is the DAFZA Business Setup Cost Worth It?

The honest answer is: it depends on your business. DAFZA offers several advantages that may justify its higher cost structure:

Potential Benefits

• Premium business address and reputation
• Direct access to the airport
• 100% foreign ownership
• 0% corporate and personal income tax
• No currency restrictions
• Sophisticated infrastructure
• Strong government backing

Potential Drawbacks

• Higher setup and maintenance costs
• Stricter regulatory oversight
• Less flexibility in office arrangements
• More formal business environment

For businesses in aviation, logistics, pharmaceuticals, or luxury goods, the DAFZA business setup cost often delivers good ROI. For others, especially startups or service businesses with no physical product, other free zones might offer better value.

Dubai Airport Free Zone Fees: Cost-Saving Strategies

While Dubai Airport Free Zone fees are generally non-negotiable, there are legitimate ways to optimize your setup:

• Carefully assess your space needs: Don’t lease more office space than necessary, as this directly impacts your visa allocation and costs.
• Consider a joint license: If your activities span multiple categories, investigate whether a combined license could be more economical than separate ones.
• Plan visa requirements strategically: Use your visa quota for key personnel, and consider outsourcing or remote work arrangements for supporting roles.
• Time your setup right: Some promotions are offered during slower periods or business events.
• Leverage banking relationships: Established relationships with local banks can sometimes help reduce minimum balance requirements.
• Budget for 3-5 years: Many entrepreneurs focus only on first-year costs, leading to unpleasant surprises later.

Breaking Down the Total DAFZA Company Setup Cost: Year One Example

Let’s put everything together with a practical example for a trading company with 3 employees in a small office:

• Registration and license fees: AED 30,000
• Small office (30 sqm): AED 90,000
• 3 employment visas: AED 30,000
• Company formation assistance: AED 15,000
• Bank account setup: AED 2,000 (plus minimum balance)
• Insurance and deposits: AED 20,000
• Utility connections and deposits: AED 5,000
• Miscellaneous approvals: AED 8,000

Total First Year Investment: Approximately AED 200,000 (excluding minimum bank balance requirements)

This figure might seem high compared to some other jurisdictions or even other UAE free zones. However, the DAFZA business setup cost reflects the premium nature of this free zone and its strategic advantages.

DAFZA Business License Cost: Recent Changes and Trends

The DAFZA business license cost structure has seen some interesting developments recently:

• Introduction of activity-based fee structures (more activities = higher fees)
• Enhanced online application systems (reducing processing times)
• More competitive packages for specific sectors (especially tech and innovation)
• Greater scrutiny of business plans before approval
• More flexibility for certain service businesses

We’ve also noticed that DAFZA has become more selective about the companies it approves. Having a solid business plan and clear value proposition is increasingly important.

Key Takeaways on Dubai Airport Free Zone Fees

The Dubai Airport Free Zone fees represent a significant investment, but for the right business, they can provide access to one of the world’s most dynamic business hubs.

When considering these costs, remember:

• Budget for both setup and ongoing operational expenses
• Factor in renewal costs from year two onwards
• Consider your real space and visa requirements carefully
• Assess whether DAFZA’s specific advantages align with your business model
• Compare with other free zones based on your specific needs, not just headline costs

As with most business decisions, it’s about finding the right fit rather than simply looking for the lowest cost option. Many thriving businesses in DAFZA find that the premium in setup costs is offset by the strategic advantages, prestige, and operational benefits.

Whether DAFZA is right for your business depends on your specific industry, growth plans, and operational requirements. The best approach is to speak with multiple service providers, visit the facilities in person, and develop a comprehensive 3-year budget before making your decision.

Hope this helps anyone considering a DAFZA setup! Feel free to ask any specific questions via email or our contact form.