The simple answer to this question is: yes and no.   The longer answer is set out in this article which explains the different options now available in the UAE to help you avoid having to rent a physical office space if you don’t really need it for your business.

Onshore/Mainland Businesses

If you want to set up a company onshore, you will need to rent a physical office space.  As part of the incorporation process of an onshore company, you will have to submit an ejari (lease registration document) to the Department of Economic Development in the relevant emirate.  That said, various business consultancies or business centers offer an alternate solution of arranging for an ejari for you and offering you a co-working space along with local sponsorship.  This option is not as expensive as renting an office space of your own.  Besides, you get a fancy place to work out of.  Many of these business centers offer clients a monthly payment system which could prove to be a cost-effective model.

In addition, note that if you have an existing onshore business with a local sponsor, you may be able to use your existing office space to set up a new limited liability company, as long as you use the same local sponsor.

Freezones

Most freezones in Dubai require you to rent a physical office space.  However, freezones like the DMCC and Dubai South offer flexi-desks starting from AED 16,000 per year.  Also, the Dubai Internet City and Dubai Media City offer exclusive desk facilities starting from AED 35,000 per annum which may make sense for businesses who want to be located out of these strategically located freezones.

Please also see ‘Options for Tech Entrepreneurs’ below.

Offshore Jurisdictions

If you wish to set up a holding company or a special purpose vehicle (SPV) to hold assets or property, bear in mind that you could incorporate an offshore company in the UAE, which does not require you to rent an office space.  The two key jurisdictions to set up an offshore company in the UAE are Jebal Ali Free Zone (JAFZA) and the RAK ICC.

ADGM SPV

An Abu Dhabi Global Market (ADGM) SPV will cost you only USD 1,600 a year and can be used to set up holding companies or to hold assets or intellectual property (IP).  You will have to obtain a consent letter from a corporate service provider to use their registered office address for your SPV.  This is generally provided for a nominal annual fee— we provide this service for about USD 700 per year.

Options for Tech Entrepreneurs

It is an exciting time to be a tech entrepreneur!

The ADGM has recently introduced a ‘Tech Start-Up’ license which offers entrepreneurs the opportunity to get a license for an annual fee of USD 700.  In addition, you will need a consent letter from a corporate service provider to use their registered office address. As mentioned above, we can provide this service for an annual fee of about USD 700.

In addition, the Dubai Technology Entrepreneurial Campus (Dtec) in Dubai Silicon Oasis offers you an option to set up your company for about AED 15,000 with a flexi-desk option.

Finally, various incubators and accelerators have partnered with freezones to offer a license and a co-working space, which is particularly useful for solo entrepreneurs or online businesses.  For instance, Astro Labs offers a DMCC license and co-working space for AED 2,500 per month.  In addition, In5 offers you a license for AED 1,000 per annum and a co-working space for AED 1,000 per month which is quite low!  Note that In5 caters not just to tech entrepreneurs but also to those in the design and media sectors.  Even if you are not strictly a tech entrepreneur, Astro Labs and In5 are flexible enough to accommodate a wide range of startups.  So make sure you explore these options when deciding to set up your company.

How can we help?

We can provide you advice on the right option for setting up your business in the UAE.  In addition, if you are setting up in the ADGM, then we can provide you a consent letter to use our registered office address for about USD 700 per year.

For any company set-up related matter, please email us at companysetup@fichtelegal.com or call us +971 4 435 7577

Do You Really Need to Rent an Office Space to Set up a Company in the UAE? was last modified: April 1st, 2019 by Fichte Legal