What does it cost to start a company in the UAE?
A free zone licence typically runs AED 12,000 to AED 25,000 a year depending on the zone and activity, with 100% foreign ownership and usually a flexi-desk included. A mainland licence is generally AED 20,000 to AED 35,000, and lets you trade directly across the UAE and take government contracts.
Each employee visa costs roughly AED 5,000 to AED 6,000 including the medical, Emirates ID and establishment card, plus a deposit in some zones. Add corporate bank account minimums, which vary widely by bank, and mandatory health insurance per employee.
Burn rate is the number that kills startups
Burn rate is everything that leaves your account each month. Runway is your remaining cash divided by burn — the number of months before you either have revenue or have nothing.
The rule most investors work to is 18 months of runway after a raise: roughly twelve months to reach the milestones and six to raise the next round. Under 12 months is a warning sign. Under 6 and you are raising from a position of weakness, which is visible in the terms you get offered.
Where UAE startup budgets typically go wrong
- Treating the product build as a monthly cost. It is a one-off capital item that comes out of your runway before month one. Model it that way.
- Renting a private office too early. Fit-out, deposit and rent can consume AED 100,000 in year one — often more than the entire MVP.
- Forgetting licence renewal. It comes round every twelve months and surprises founders who budgeted it as a setup cost.
- Underestimating customer acquisition. For consumer products, marketing usually becomes the largest line within six months of launch.
The product build is the lever you control
Salaries and licences are fairly fixed. The product build is not — and it is often the largest single number in a pre-revenue budget. Cutting it from AED 150,000 to AED 70,000 by shipping a genuine MVP can add six months of runway without touching the team.
Price the smallest credible version with the MVP cost calculator, check what each feature is costing you in the feature estimator, and model the return with the ROI calculator. Then come back and re-run the runway.