How Much Does It Cost to Run a UAE Company in Its First Year? (2026)

The first-year running cost of a UAE company is what you pay to keep it licensed, staffed and compliant between the day the licence is issued and its first renewal, on top of the setup fee. Renewing a UAE company each year costs around 80% of the initial setup cost. Government tax registrations are free, and most other lines are priced by your landlord, accountant, insurer or free zone, so the cost to run a UAE company comes from the quotes you collect rather than from one official figure.

As of September 2026, the quickest way to budget is to price the renewal from your setup quote, add the statutory tax and staff lines set out below, and get written quotes for everything a provider prices. This guide lists each year-one cost, says whether the law fixes it or a provider sets it, and shows when it falls due. The six budget steps near the end put it all in order.

What Counts as a Running Cost

A running cost is any cost that recurs, or that a legal deadline triggers, after your trade licence is issued. Setup fees are paid once to form the company, so they are out of scope here.

What This Guide Leaves Out

If you are still choosing a jurisdiction, a licence or an activity, start with our guide to setting up a company in the UAE and come back once you have a setup quote. Everything below assumes the licence has been issued.

First-Year Running Costs at a Glance

A UAE company's first-year running costs fall into seven budget lines. A few carry a price fixed by law or by a published government schedule; the rest are set by your free zone, your economic department, your landlord or your service providers, and for those the right move is to ask for a written quote.

The Seven Budget Lines

1. Licence renewal at month 12. A UAE trade licence is renewed every year, and you must keep it valid to keep trading lawfully (Source: Dubai Development Authority). Renewing a UAE company each year costs around 80% of the initial setup cost. Your free zone or economic department sets the exact price, and the process and documents are in our guide to renewing your trade licence.

2. Premises. Every UAE business must have a physical address. On the mainland you provide an office or warehouse rental agreement that meets the rules of your emirate's economic department and municipality, some emirates require it to be attested, and in Dubai the tenancy agreement must be registered with Ejari (Source: u.ae). Rent is market-priced, so compare office space options and ask each landlord or business centre for the full annual cost in writing.

3. The immigration file. Your company's establishment card has to be renewed on its own expiry date, and it needs a valid trade licence and any outstanding fines settled first. ICP's published schedule for renewing it lists an application fee of AED 100, a renewal fee of AED 100 for each year, AED 1,000 to renew the establishment's subscription in ICP's electronic system and a smart service fee of AED 100 (Source: ICP). That schedule applies where the immigration file sits with ICP; establishments in Dubai deal with the emirate's own immigration authority, so confirm the fee there. Residence visa and Emirates ID fees vary by emirate and free zone, so get them quoted for your own route.

4. People. Salaries are yours to set. On top of them come two statutory costs: employer-paid health insurance whenever a residence permit is issued or renewed, and end-of-service gratuity, which builds up from each hire's start date. Both are explained in the staff section below.

5. Tax. Corporate Tax registration is free, Corporate Tax is 0% on taxable income up to AED 375,000 and 9% above it, and VAT becomes an obligation only once taxable supplies and imports pass AED 375,000 over 12 months. The tax sections below cover what you actually pay in year one.

6. Bookkeeping, records and audit. Every company keeps records for Corporate Tax, and some must also pay for audited financial statements. Accountants and auditors quote their own fees, so ask for an annual price that covers bookkeeping, the tax returns and, if you need one, the audit.

7. Compliance filings and systems. The beneficial owner register has deadlines from the day the company exists, and from 2027 businesses within the e-invoicing system must issue invoices electronically through an Accredited Service Provider. The cost here is mostly the time to keep the register current and, for e-invoicing, the fee your provider quotes.

Which Costs Are Fixed by Law and Which You Negotiate

A cost is fixed when a law, a ministerial or cabinet decision, or a published government schedule sets it. It is negotiated when a landlord, a provider or your licensing authority quotes it to you, and no official source publishes a typical figure.

Fixed by Law or Published Schedule

The fixed lines are the Corporate Tax rates and the 0% band, the VAT rate and registration thresholds, the free Corporate Tax and VAT registrations, ICP's published establishment card fees, the statutory penalties for missed deadlines and the gratuity formula. Each appears in this guide with its source, and none of them changes because of who you hire to help you.

Quoted by Providers

The quoted lines are rent, accounting, audit, bank charges, insurance premiums, PRO services and the renewal price your free zone or economic department sets. Ask each provider for a written annual price and exactly what it includes, and treat any unsourced average you see online as a guess. Use the verified ratio as your check on the renewal quote. Renewing a UAE company each year costs around 80% of the initial setup cost.

Month by Month: When Year-One Costs Fall Due

Year-one costs fall due on dates set by your licence date, your incorporation date, your hiring and your revenue, not on one calendar shared by every company. The timeline below follows the order in which most new companies meet each deadline; count each one from your own dates.

The Year-One Cost Timeline

1. At licensing: your premises lease, registered with Ejari if you are on the Dubai mainland, and your company's establishment card. Issuance fees depend on the authority that holds your immigration file, so confirm them with it.

2. Within 60 days: the beneficial owner register. A UAE company must keep a register naming anyone who owns or controls 25% or more of its capital or voting rights; it is created within 60 days of the company coming into existence, changes are recorded within 15 days, and the beneficial owner and shareholder registers go to the registrar within 60 days of licensing and registration (Source: Cabinet Decision No. (109) of 2023, published by the Ministry of Economy and Tourism). Our UBO declaration guide covers what to file.

3. Within 3 months of incorporation: Corporate Tax registration, for a company incorporated or established on or after 1 March 2024 (Source: Federal Tax Authority Decision No. 3 of 2024). Registration on EmaraTax is free, and the FTA's stated processing time is 20 business days from receiving a complete application. Registering late costs AED 10,000, which the FTA's Late Registration Penalty Waiver Initiative waives if the first tax return is filed within 7 months from the end of the first tax period (Source: Federal Tax Authority).

4. Every month, and at every visa event: payroll each month, employer-paid health insurance whenever a residence permit is issued or renewed, and a gratuity accrual for each employee, who becomes entitled to it after one year of continuous service.

5. When taxable supplies and imports pass AED 375,000 over the past 12 months: apply for VAT within 30 days, then file each VAT return and pay the VAT due within 28 days from the end of each tax period.

6. Month 12: the trade licence renewal. Renewing a UAE company each year costs around 80% of the initial setup cost. The establishment card is renewed on its own expiry date, which may not match the licence, and ICP states a completion time of 2 days for its renewal service.

7. After the first tax period ends: the Corporate Tax return, due within 9 months of the end of the period, and any tax payable. This deadline can fall after your first anniversary, but the work and any tax relate to your first tax period, so budget for them in your first-year plan.

Corporate Tax in Year One: What You Actually Pay

In year one, a UAE company pays Corporate Tax only on taxable income above AED 375,000, and it may pay nothing if it elects Small Business Relief or is a Qualifying Free Zone Person earning qualifying income. The cost every company carries is compliance: registration, a return within 9 months of the end of each tax period, and the records behind it.

The 0% and 9% Bands

UAE Corporate Tax is charged at 0% on taxable income up to AED 375,000 and 9% on taxable income above AED 375,000 in the same tax period, under Cabinet Decision No. 116 of 2022 (Source: Ministry of Finance). Businesses have been subject to Corporate Tax from the start of their first financial year beginning on or after 1 June 2023, so a company formed today is in scope from its first tax period. The bands apply to taxable income, not to revenue, so the figure that matters is the one your accountant prepares for the return.

Small Business Relief

Small Business Relief lets a resident company be treated as having no taxable income for a tax period if its revenue is AED 3 million or less in that period and in every previous one, and it must be elected for each tax period (Source: Federal Tax Authority). Under Ministerial Decision No. 131 of 2026, Small Business Relief is available for tax periods ending on or before 31 December 2029 (Source: Ministry of Finance). Some guides still show an earlier end date that this extension replaces. The relief is not available to a Qualifying Free Zone Person or to a member of a large multinational group.

Electing it does not remove the paperwork. A company claiming Small Business Relief must still register for Corporate Tax, submit a simplified tax return within 9 months of the end of its tax period and keep records that let the FTA verify its revenue and eligibility, and late-submission penalties apply to anyone who misses the deadline (Source: Federal Tax Authority).

Free Zone Companies

A Qualifying Free Zone Person that meets the conditions pays Corporate Tax at 0% on its qualifying income (Source: Ministry of Finance). Two costs come with that status. It cannot elect Small Business Relief, and it must prepare and maintain audited financial statements for tax periods starting on or after 1 January 2025. If you plan to rely on the 0% rate, budget for an audit from your first tax period.

What Late Filing and Late Payment Cost

Every taxable person must file a Corporate Tax return for each tax period within 9 months from the end of that period, and our guide explains how to file your Corporate Tax return. Filing late costs AED 500 for each month or part of a month for the first twelve months and AED 1,000 for each month from the thirteenth month onwards. Unpaid Corporate Tax attracts a monthly penalty at 14% per annum on the unsettled amount (Source: Cabinet Decision No. 75 of 2023, as amended).

VAT: A Cost Only Once You Cross the Threshold

VAT becomes a running cost only once your company has to register. UAE VAT is charged at a standard rate of 5% (Source: Ministry of Finance), and registration is mandatory when taxable supplies and imports exceed AED 375,000 over the past 12 months and voluntary above AED 187,500 (Source: Federal Tax Authority).

When Registration Becomes Mandatory

Once you cross the mandatory threshold, apply to the FTA within 30 days of being required to register. Registration is free, the FTA estimates 20 business days to process a complete application, and applying late attracts a late registration penalty. The steps are in our VAT registration guide.

What VAT Actually Costs Your Business

VAT is charged to your customers and paid over to the FTA, so the running cost to budget is not the tax itself. It is the bookkeeping that keeps your invoices VAT-ready, the work of filing each return and paying the VAT due within 28 days from the end of each tax period (Source: Federal Tax Authority), and any penalty if a deadline slips. Ask your accountant to quote the return work as part of the annual fee.

Staff Costs Beyond Salary

Beyond salaries, a UAE employer carries two statutory staff costs: employee health insurance and end-of-service gratuity. Neither has an official standard price, but both have fixed rules on who pays and when.

Employer-Paid Health Insurance

Since 1 January 2025, health insurance for private sector employees has been mandatory in every emirate. It already applied in Abu Dhabi and Dubai, and it now covers Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah too. The employer bears the cost whenever any residence permit is issued or renewed, and employees whose work permits were issued before 1 January 2025 must be covered when their residence permit is next renewed (Source: MOHRE). Premiums are set by insurers and differ between plans and emirates, so ask for a quote per employee before you hire.

End-of-Service Gratuity

A foreign full-time employee earns gratuity on basic wage only, excluding allowances: 21 days' basic wage for each of the first five years of service, and 30 days' basic wage for each year after that (Source: u.ae). An employee with less than one year of continuous service is not entitled to it, so the cost builds up quietly through year one and becomes a real liability the day a hire completes one year. Our gratuity guide shows the calculation, and our UAE salary guide for employers covers how basic pay and allowances are usually structured.

Bookkeeping, Records and Audit

Every company subject to Corporate Tax keeps records for at least 7 years after the tax period they relate to, and some must also pay for an audit. Accountants and auditors quote their own fees, but the rules that decide what you need are fixed.

Record Keeping

Taxable persons and exempt persons alike must keep the records that support their Corporate Tax position for at least 7 years following the end of the tax period they relate to (Source: Federal Tax Authority). Failing to keep the required records costs AED 10,000 for each violation, or AED 20,000 for a repeat within 24 months (Source: Cabinet Decision No. 75 of 2023, as amended). For what to keep and how, see our page on UAE accounting and bookkeeping requirements.

Audited Financial Statements

For tax periods starting on or after 1 January 2025, two groups must prepare and maintain audited financial statements for Corporate Tax: a company with revenue above AED 50 million in the tax period, and every Qualifying Free Zone Person, under Ministerial Decision No. 84 of 2025 (Source: Ministry of Finance). If neither applies, this Corporate Tax rule does not require an audit, but check whether your licensing authority asks for one at renewal.

No Economic Substance Report

Cabinet Decision No. (98) of 2024 cancelled economic substance reporting for companies for financial years ending after 31 December 2022, so a newly formed company does not need to budget for an Economic Substance report (Source: Ministry of Finance).

Year-One Costs That Are Really Penalties

Some year-one costs are really penalties: each one is avoidable, and each one is set by law. Six deadlines carry a fixed charge or a stated penalty if you miss them.

Missed Deadlines and What They Cost

1. Corporate Tax registration after the 3-month window: AED 10,000, waived under the FTA's waiver initiative if the first tax return is filed within 7 months from the end of the first tax period.

2. A late Corporate Tax return: AED 500 for each month or part of a month for the first twelve months, then AED 1,000 for each month from the thirteenth.

3. Unpaid Corporate Tax: a monthly penalty at 14% per annum on the unsettled amount.

4. Missing records: AED 10,000 for each violation, or AED 20,000 for a repeat within 24 months.

5. Late VAT registration: a late registration penalty under the tax legislation. The FTA's registration service page does not state the amount, so confirm it with the FTA if you are already past your 30 days.

6. An establishment card renewed more than 30 days after it expires: AED 100 for each month of delay, up to a maximum of AED 1,000, under ICP's published schedule.

These are the deadlines with a price attached. For every annual obligation behind them, including the ones with no stated penalty, work through our annual compliance checklist.

How to Build Your First-Year Budget

Build a first-year budget in six steps: price the renewal, add staff on-costs, collect provider quotes, diary the statutory deadlines, decide on Small Business Relief and plan for e-invoicing. Work through them in this order and you will have every line of the plan.

Six Steps to a First-Year Budget

1. Start from your setup quote and plan for the renewal at month 12. Renewing a UAE company each year costs around 80% of the initial setup cost.

2. For each person you will hire, add the salary, employer-paid health insurance at each residence permit issue or renewal, and a gratuity accrual from their start date.

3. Get written quotes for rent, accounting, audit if you will be a Qualifying Free Zone Person or expect revenue above AED 50 million, bank charges and PRO support.

4. Put the statutory deadlines in a calendar from your own dates: 60 days for the beneficial owner register, 3 months for Corporate Tax registration, 30 days for VAT registration once you cross the threshold, 28 days after each VAT period and 9 months after each Corporate Tax period.

5. While revenue stays at AED 3 million or less, decide for each tax period whether to elect Small Business Relief, and keep the records that prove you qualify.

6. If e-invoicing applies to you, choose your Accredited Service Provider early: a business with revenue below AED 50 million must appoint one by 31 March 2027 and implement e-invoicing by 1 July 2027, and a business with revenue of AED 50 million or more must appoint one by 30 October 2026 and implement by 1 January 2027 (Source: Ministerial Decision No. 244 of 2025, as amended by Ministerial Decision No. (66) of 2026). Voluntary use has been allowed since 1 July 2026, and a business dealing only with consumers is not yet in scope; our guide to UAE e-invoicing explains who is covered.

Your first-year budget comes down to one verified ratio, a short list of statutory deadlines and a set of written quotes. To plan your company's setup and first-year obligations with Zola, create your account.